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Carbon fraud trial collapse in London. Judge notes that expert witness Andrew Ager knows a lot about carbon markets, but has little or no understanding of the duties of an expert witness

A £7 million carbon credit fraud trial has collapsed at Southwark Crown Court. In his closing observations, Judge Nicholas Loraine-Smith described the prosecution’s expert witness, Andrew Ager, as “not an expert of a suitable calibre”.

Ager had been hired by the prosecution in a trial of eight men: Steven Sulley, Ashley Hunte, David Pierce, Christopher Woolcott, Christopher Chapman, Marcus Allen, Daniel Martin and Lewis Deakin. The prosecution alleged that between November 2011 and February 2014, the men persuaded members of the public to invest in carbon credits, amongst other things.

Several companies were involved: Pure Carbon Limited, ClearView Partnership Ltd, Venturelife Ltd, Maximum Global Ltd, Carbon Green Capital LLP and Agora Capital Ltd.

REDD-Monitor wrote about ClearView Partnership in May 2013:



And about Carbon Green Capital and Agora Capital in August 2014:



In 2016, ClearView and Pure Carbon were ordered into liquidation as part of the Carbon Neutral Investments network of scam carbon credit companies.

There is little doubt that ClearView was running a boiler room operation. Someone called “Mike” went for a job interview with ClearView Partnership. “Seems dodgy,” he wrote on a discussion board about ClearView.

It’s run by a 25 year old guy called Chris Chapman who handed me a script which is just the boiler-plate way of getting people to invest. Who ever calls you up doesn’t know anything. At the end of the script, before you get to talking about what your selling, you hand over to a senior broker. I literally have no idea what it is they’re selling.

After the interview, Mike called the Financial Conduct Authority’s whistleblower line to report the company.

Jane Osborne of 2 Harcourt Buildings, represented the Crown Prosecution Service at the trial. She told the jury that the men concentrated on “making as much money as possible and not getting caught” by selling carbon credits for two or three times what they were worth.

Some of those investing lost their life savings. One investor, Charles King, told the jury that he lost £50,000 after employees of one of the companies aggressively pushed him into handing over more and more of his money into carbon credits.

So what went wrong? How did these men manage to get away with taking millions of pounds, much of it from pensioners?

Step forward Andrew Ager.

Andrew Ager, carbon trader

From 2008 to 2012, Ager had worked as a carbon trader at Jeffries Bache, a subsidiary of the global investment banking firm Jefferies Group. In 2013 he started work at a carbon trading company called Vertis.

REDD-Monitor featured Ager in a post in 2013 under the headline, “Why you should not buy voluntary carbon credits as an investment: A carbon trader explains”.

The post consists largely of the transcript of a presentation Ager gave in 2012 to the City of London Police about the voluntary carbon market. In his presentation, Ager explains why voluntary carbon credits are not suitable as investments for members of the public.

In his closing observations on the trial, Judge Nicholas Loraine-Smith said,

I have no doubt that he knows a lot about the carbon credit market and from that angle alone his evidence could be seen to be reliable. In fact in this case it certainly looked for a time as though there would be little challenge to what he had to say.

But Judge Loraine-Smith also pointed out that an expert’s duties go “far beyond that” (i.e. knowing a lot about the carbon market) and “it became glaringly apparent” that Ager had “little or no understanding of what those duties were or why they were important”.

The court learned that Ager has no academic qualifications. He took three A Levels, but couldn’t remember if he passed them. He started working as a trainee trader at the age of eighteen. He had no training and attended no courses on carbon trading. His work has never been peer reviewed.

Ager described himself as an associate of “The UK Economic Crime Directorate’s Training Centre for Economic Crime and Fraud”. That sounds impressive, but only involved the 2012 presentation to the City of London Police and another talk to the police in 2014.

He received no training in the duties of being an expert witness. He did not make any record of instructions or meetings. He kept hard copies of documents related to the case in boxes under the stairs, until some were damaged in a flood. He then moved them to a box on his balcony.

Ager cut and pasted the “first few pages” of the first statement that he gave to the police, from a statement in another case (R v Noade and Others) that was tried in the Central Criminal Court.

Judge Loraine-Smith said he had seen an email in which the police officer in charge of the investigation “appeared not to be asking an expert for his view on particular matters but telling him exactly what he wanted in the statement and even suggesting the wording”.

Three hour telephone call

A more than three hour telephone call took place on 15 April 2019, between Ager and the expert witness for the defence, Dr Marius-Cristian Frunza. That call eventually led to the collapse of the case.

Judge Loraine-Smith described Frunza as “undoubtedly an expert in this field”. The judge referred to a book that Frunza wrote titled, “Fraud and Carbon Markets”, that was published in 2013. The book is about carbon credits and VAT carousel fraud in Europe.

When asked in court, Ager admitted that he had not read the book. He added that he had seen a documentary about carbon credit fraud.

Frunza appeared in the 2013 documentary “Carbon Crooks”. Again he’s talking about VAT fraud. Frunza’s area of expertise is carbon credit VAT fraud, rather than boiler room scammers selling carbon credits as investments to retail investors in the UK.

Nevertheless, there are strict rules about joint conferences between experts. During the three hour phone call with Frunza, Ager made several claims that were simply not true.

Ager claimed that several people had died as a result of losing their pensions. The court heard that there was no evidence of this. Ager claimed that a police report stated that the money was spent on Ferraris, Lamborghinis, and an Aston Martin. There was no such report.

Ager told Frunza that giving evidence was a “horrendous environment” in which “the last thing you want to do I guess is claiming, finding out that what you are defending is someone who has taken someone’s life savings”.

Judge Loraine-Smith commented that,

On what I heard it seems likely that Mr Ager was keen that his evidence should not be challenged and he felt threatened by the prospect of a far more impressive expert appearing in an area of expertise in which he hoped to continue making a living.

Judge Loraine-Smith described the disclosure in the case as “pretty chaotic and unsatisfactory”. The Crown Prosecution Service defines disclosure as “providing the defence with copies or access to all material that is capable of undermining the prosecution case and/or assisting the defence”.

“It is obvious that there must have been some relevant emails which he has simply not produced,” Judge Loraine-Smith said in his closing observations, and added that,

He has little if any understanding of the duties of disclosure and nobody from the police or the CPS seems to have taken the time to explain them to him.

Previous convictions in question

Narita Bahra QC of 2 Hare Court, was the defence counsel for Steven Sulley. A statement on the company’s website explains the implications of the collapse of this case:

As a result of the cross-examination of Mr. Ager, the safety of the convictions in every previous carbon credits prosecution is now in question. Furthermore, it is apparent that there are systemic failures within the investigation and disclosure processes at City of London Police that are likely to impact upon all prosecutions undertaken in the last eight years.

A spokesperson for City of London Police said,

“This has been an enormously complex case of seven years duration. The case illustrates the significant change in the way fraud itself has evolved, along with our response in dealing with it.

“Together with our colleagues in the CPS, we apologise that the evidential and procedural issues in the case have led to its dismissal. Regrettably we haven’t been able to provide these victims with the level of service we continually strive for and for that we sincerely apologise.

“Since this case started we have been changing how we and others in policing investigate fraud. Undoubtedly there is key learning we will take from this case which we will use going forward to provide a better service to the victims of fraud.”

And a spokesman for the Crown Prosecution Service said,

“We have a duty to continuously review all our cases. Information has recently been brought to the attention of CPS which has led to the conclusion that our legal test for prosecution was no longer met and that it would be wrong to continue with the case against the defendants.

“We are considering past cases to identify any in which Andrew Ager appeared as an expert witness and will consider any action necessary once these have been fully reviewed. Mr Ager will not be used as an expert witness in any future cases.”

 

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