More than 500 officers smashed their way into thousands of safety-deposit boxes to retrieve guns, drugs and millions of pounds of criminal assets. At least, that’s what was supposed to happen. Adrian Levy and Cathy Scott-Clark investigate.
The Finchley Road is one of the busiest thoroughfares heading out of London. It leads traffic north past Lord’s Cricket Ground and the multimillion-pound houses of some of the country’s richest hedge-fund managers all the way to the M1. At three in the afternoon it’s always pretty slow going, but on this particular summer Monday the traffic was almost at a standstill.
This was partly because the normal three lanes going north had been cut down to one. But it was also because of drivers slowing down to a crawl so they could gawp at the massive police operation unfolding on a busy corner of the road.
Police vehicles – both cars and menacing armoured trucks – jammed up two lanes. Dozens of armed officers in bulletproof vests were standing ready, waiting to be called inside an anonymous-looking building. From the sheer manpower and weapons on display it looked like the capital was under another terrorist attack.
But while this was the Metropolitan Police’s most ambitious operation in its 180-year history, it had nothing to do with national security. Only hours before, at a special briefing, teams from SCD6 (the Economic And Specialist Crime unit) and C019 (Specialist Firearms Command) hunkered down with technicians armed with angle grinders and drills. Also present were dog handlers, their animals trained to sniff out guns, drugs and explosives.
In all, more than 500 officers had gathered to receive orders to raid smart addresses in well-heeled parts of the capital. The locations included three of Britain’s largest and most well-established safety-deposit box depositories in Edgware, Hampstead and Park Lane as well as an office and the homes of the three directors of Safe Deposit Centres Ltd, which owned the vaults – two in Hampstead and one in Barnet.
For most of those at the briefing, arriving just before 3pm on June 2 last year, this was the first they had heard of the operation. Secrecy had been paramount and, with so many involved, keeping the operation ‘airtight’ had been one of the largest headaches in the pre-planning for what was codenamed ‘Rize’.
The police rolled through London in a convoy: scores of patrol cars, armed-response vehicles, outriders on their bikes, vans with their windows shielded by metal cages. With a Met film unit recording everything, detectives forced their way past startled security guards, demanding receptionists open the secure doors that led to the normally hushed strong rooms, which in the three centres housed 6,717 safety deposit boxes.
Over the next few hours, the three depositories were transformed into makeshift evidence-sorting centres, decked out with tables to bear the contents of the safety-deposit boxes that were soon to be forced open. Within a day, the first stage of the operation was finished but it would take over ten more to complete the next intricate and prolonged phase.
Investigators wearing gas masks and blue overhauls used power tools to chop away at the locked doors that protected the boxes themselves. They had rehearsed this bit for many hours, on mockups, trying numerous methods to get quickly and safely at the deposit boxes.
Diamond drill bits forced down into the locks proved disastrous, potentially damaging evidence inside. Instead, they settled on Makita angle grinders, with which they now effortlessly hacked at the hinges, allowing them to slide out the individual strong boxes, some as small as an A4 pad. Larger ones required a more bullish approach – strong-arm tactics that the police maintained were essential as key-holders would have been unlikely to co-operate.
As the first of the boxes was opened, detectives began probing the contents. Many were spilling over with bank notes and jewellery. Each was given a rough designation – for instance, ‘cash’ or ‘gun’ – and the words scribbled onto labels before they were placed in sealed evidence bags that were loaded into vans and given an armed escort to their final and secret destination, a secure counting house.
Here, every one of the thousands of boxes was to be intimately scrutinised. Not only did detectives have to itemise what they had found but match the contents to a person.
A few of the box-holders’ identities had been acquired through months of police surveillance. Others were revealed in vault registers seized by police during the raid. Some used aliases and would be hard to track down; more still would be identified by scrutinising the vaults’ CCTV cameras. Sixty officers would sift, analyse and count until November 2008 and beyond, racking up £1.4 million in overtime bills alone.
There was a lot at stake. Never before had the British police been granted a warrant as broad as this. The raids had been made possible under a controversial law, the Proceeds Of Crime Act (POCA), which came into being in 2002 and introduced an array of wide-ranging new powers to seek out and confiscate dirty money – the houses, cars and boats bought by criminals.
However, lawyers watching the police operation unfold were quick to warn that the strong-arming of these vaults and the crashing into each and every box was tantamount to the police having obtained permission to smash down the doors of an entire housing estate.
David Sonn, of Sonn Macmillan Walker, one of the largest criminal defence practices in London, says, ‘POCA was never intended for this. No one objects when criminals are caught and their assets seized – but shaking down everyone to get to them is specifically not what lawmakers wanted.’
Aware of the controversy, Scotland Yard went on a charm offensive, with Assistant Commissioner John Yates giving a series of briefings. ‘This is a huge operation to tackle criminal networks who we believe are using safe deposit facilities to hide assets,’ he reassured the media.
The raids had come after 18 months of scrupulous intelligence gathering that had led detectives to suspect the vault owners were turning a blind eye to the worst kinds of criminality, enabling major villains to conceal, transport and launder their ill-gotten gains, said Yates. Brushing aside concerns about the invasion of privacy, he asserted that ‘the majority’ of the boxes seized belonged to criminals.
Evidence was soon put on show that seemed to underscore his position. More than £53 million in cash was impounded, some of it stuffed into supermarket bags. Most of the money, said the Met, was ‘the proceeds of armed robberies and international drug trafficking’.
Unnamed Yard sources speculated that some had come from the 2006 Securitas depot robbery in Tonbridge, Kent, and that a mysterious haul of gold grains wrapped in plastic and squashed inside suitcases could be linked to the Brinks Matt heist of 1983. There were sufficient diamonds and pearls to string up as bunting for a street party.
In one box in Edgware, bags of white powder when tested turned out to be 140g of 81 per cent pure cocaine. Lying next to it was £62,500 in cash. Another box, crammed with notes, was identified as belonging to a Russian woman whose boyfriend was the son of a convicted major-league drugs dealer.
A semi-automatic Glock 9mm, the weapon of choice for British gangsters, was lodged in Box 1653 at the Hampstead depository, rented by 44-year-old Gavin Leon, who was jailed for five years last March. A Brocock firearm and nine rounds of ammunition, together with £20,000 in cash, some heroin and weighing scales had been deposited in a box belonging to John Derriviere, a 47-year-old who is now wanted by police.
A £100,000 stash left in a box in Edgware turned out to belong to convicted drug dealer David Wilson, 38, from Dagenham, a nest egg he intended to collect after completing a 24-month sentence. Scrutinising the vault’s CCTV, police also identified drug trafficker Yaset Berhane, 27, whose box contained £122,000 in cash, some of it marked by Sussex Police in an earlier drugs sting, leading to Berhane’s jailing in March 2009 for drug trafficking and money laundering.
When vice-squad detectives raided five premises connected to a southeast Asian businesswoman who had more than £100,000 in cash in one box, they found brothels worked by girls who had all potentially been trafficked to the UK, as well as a string of foreign bank transactions showing £800,000 flowing out of the UK. In the months after Rize there were more than 40 arrests and 11 prosecutions.
However, by talking to scores of box-holders, none of whom have spoken before, Live has uncovered a different version of Operation Rize, one that shows how the vast majority of those caught up in the raids were innocent. They have had their lives turned upside down over the past 17 months. Many have struggled to recoup their money and possessions, been forced into legal trench warfare with police lawyers and told they must prove how they came by the contents of their boxes.
This is also a story told through secret legal papers, including confidentiality agreements struck with some vault depositors whose cases threatened to topple the entire operation. Although the police told a judge that ‘nine out of ten’ of all of the thousands of box-holders were probably criminally minded, criminally connected or felons, the paper trail reveals that perhaps only as few as ten per cent of the boxes have any connection to serious crime.
More worryingly, according to eminent lawyers and barristers, Operation Rize has seen the Yard employ unethical tactics, driving a coach and horses through the new POCA legislation, leaving the Met facing a raft of legal actions that could potentially cost taxpayers millions of pounds.
‘Rize is a juggernaut veering out of control,’ said one barrister who helped advise on POCA during its passage through Parliament, ‘and now a sharp tool that we badly needed to drain criminal cash has been tarnished, potentially damaging it and inhibiting its use’.
Within days of the raids, the police set up a helpline to deal with potential inquiries. They were overwhelmed by the response. One detective told Live: ‘Everyone presumed we had bagged a load of villains who would not dare claim their iffy property. But thousands of the box-holders complained.’
Some of the box-holders contacted lawyers. These were people far removed from the criminal underworld. Many had been with the company from the beginning, drawn to the likeable Jewish businessman who ran it. Leslie Sieff founded the company in 1986, although by the time Operation Rize unfurled he’d been bought out by developer Milton Woolf.
Many of the clientele were families who had fled turmoil, pogroms, coups and wars and long had a cultural preference for locking away money and jewels, building up a vehement distrust for the integrity of traditional banks. Here, stepping down the spiral staircase at the back to the darkened boxes below, they felt reassured that their most important possessions were safe.
One survivor of Nazi Germany in his seventies told us how he had placed a bag of diamonds there – security if ever he or his descendents needed to run again.
‘My wife and I had escaped from Germany with nothing but these gems,’ he said. ‘She sewed them into our clothing before we crossed occupied Europe, reaching Britain by ship when the jewels were snipped out and locked up.’
There was a rabbi too, Yitzchak Schochet, of Mill Hill Synagogue, who said: ‘Safety deposit boxes are supposed to be confidential. The whole situation was very unsettling and an intrusion of privacy.’
Another client, an Indian millionaire entrepreneur with connections to the House of Lords, described how he was ‘treated like a convicted man just because I had wealth in cash’.
A Hindu priest described to Live how his family’s valuables had been carried in the Sixties from Madhya Pradesh, India, to London ‘in a gunny sack’.
Among the possessions seized by the police were elaborate handcrafted bracelets, gold rings set with uncut stones, and a bejewelled wedding tikka ornament to be draped on the forehead of a new bride. ‘These items had always been in our family,’ the priest said, ‘We had cash in there too. But now we had to prove how we bought them and where that money, saved over the years, had come from.’
Under POCA, the burden of proof lay with the box-holders. Finding evidence for wartime treks across Europe, or charting migration stories from the Partition of India and beyond, would cost many of the box-holders tens of thousands of pounds.
Mark Richardson, a former military intelligence officer and now a forensic accountant, who has been employed by several box-holders to explain their wealth, told us: ‘We had to get one family’s diamonds carbon-dated at great expense to demonstrate to the police that they had been cut in the Thirties, which tallied with their story of fleeing Germany before World War II.’
Lawyer Sara Teasdale, of City practice Roiter Zucker, whose client had kept more than £900,000 in his box at the vaults in Edgware as cash flow for his business leasing black cabs, said: ‘The police are “deep-pocketing” – hauling people through a protracted legal process that they know is so costly that most will roll over.’
One angry box-holder rented Box 73 at the Park Lane depository. Alexander Temerko, formerly a vice president of Russian oil giant Yukos, whose billionaire boss Mikhail Khodorkovsky had fallen foul of President Putin, had fled to London as Khodorkovsky was jailed for eight years in Russia
On his arrival in the UK, Temerko had locked five crates of legal documents into his safety-deposit box. However, as a result of Rize, the papers were now in the hands of the Met, which claimed they were evidence of an alleged criminal conspiracy whose participants were British, obliging the police to investigate. Incandescent, Temerko hired an expensive lawyer, Ian Burton, of BCL Burton Copeland. Burton recommended Clare Montgomery, a barrister from Cherie Blaire’s chambers, Matrix.
Within weeks of Operation Rize, Temerko’s team set about applying for a Judicial Review of the judge’s decision to grant the controversial Rize warrant and demanded the return of Temerko’s files, which they claimed had been taken unlawfully.
Montgomery and Burton highlighted case law that specifically stipulated ‘fishing expeditions’ were barred to the police, even under POCA. In other words, the police were not allowed to seize property in the hope that it would later prove to be criminal. The legal team also demanded sight of the police evidence that had convinced the judge to issue the warrant in the first place.
Across town, in Camden, some less high-profile but equally infuriated welltodo box-holders did the same. John and Estelle Selt, aged 62 and 73, wealthy retired shopkeepers, had rented a box for 15 years. Inside it was £150,000 and three valuable bracelets. Determined to clear their names, the Selts put up the £50,000 needed to launch their own Judicial Review that also focused on the lawfulness of the original warrant.
Following seven months of legal fencing, with the police guarding its Rize file, the twin Judicial Reviews finally succeeded in prising from the Yard a startling 32-page ‘skeleton discussion’. This document – which we were able to obtain after being given a case number by a senior source in Customs and then trawling through court records at the Royal Court building – provides an extraordinary insight into how the police managed to obtain a warrant for Rize.
The document provides a summary of two confidential meetings between the Met, its legal advisors and the judge who signed the Rize warrant in May 2008. The document revealed the Met had begun targeting Safe Deposit Centres Ltd in January 2007, in an operation led by DCI Mark Ponting.
Using undercover officers posing as potential customers, Ponting’s team of detectives had drawn maps of the vault interiors and tried to determine the number of clients and their identities. They also probed the rigour with which the company enforced Financial Service Authority (FSA) guidelines on properly identifying box-holders and keeping a watch out for anything suspicious.
Convinced that the vaults were part of a moneylaundering conspiracy, the Met Commissioner had then asked for RIPA (Regulation of Investigatory Powers Act) warrants to tap the phones of the vault’s directors, as well as intercepting their emails and letters – an operation completed by October 2007. Now the police decided to raid, and in an unprecedented move they planned to break into all of the deposit boxes simultaneously.
The Met hired Kennedy Talbot, one of Britain’s most experienced barristers dealing with POCA. Talbot approached a senior judge at Southwark Crown Court in November 2007. But Southwark rejected the request. The police application was also riddled with simple errors, according to the skeleton document, including a claim by undercover officers that there were 18,000 boxes, three times the actual number.
Police also named Leslie Sieff as a director, when available records showed that he had sold the majority of his shareholding as far back as 1998 and would soon resign as a director.
Undaunted, the Rize team tried again the following year. This time the Met went out of London to a court that rarely heard complicated money-laundering cases, putting their arguments before Judge Ken Macrae, in Croydon. In a practice known as ‘judge shopping’, one that is lambasted by judges and lawyers – though not illegal – the police hoped to get the right result by finding a court more sympathetic to their goals and less up to speed with judicial debates on the proportionality of a warrant.
David Sonn, of Sonn Macmillan Walker, says: ‘This was highly unusual and totally unethical.’ The police should have gone back to Southwark. The Met has refused to discuss why they went to Croydon stating simply: ‘We will not discuss details of the evidence relied upon for warrant applications.’
Having amended the number of safety-deposit boxes to a correct 6,717, and after admitting ‘there is a lot we don’t know’, the police claimed to have found a shredded list behind one of the centres that when reconstituted revealed the identities of boxholders. SCD6 had analysed it and concluded that in a sample of 391 names between ’82 per cent and 90 per cent were suspicious or connected to crime’.
A statistician was then hired who used this sample of only five per cent of the total client base to conclude that nine out of ten of all of the thousands of box-holders were probably criminally minded or felons, an opinion later expressed more stridently with Judge Macrae, who was told that ‘all of the boxes might contain criminal property’. Macrae was swayed. He authorised a warrant under POCA on May 30 2008.
Minutes had been taken of the judge’s meetings with Talbot and Ponting. They tell how the Rize plan had been rejected by one senior judge only to be put to a second who was wooed with statistics rather than hard new evidence. Other court documents obtained show that the legal teams preparing their judicial reviews took the 32-page transcript to pieces and in so doing lambasted the whole Rize operation.
‘The warrant was extraordinarily broad,’ Temerko’s team warned, and ‘completely unprecedented’, representing the widest ever seen by lawyers in Britain, one that on this ground alone was liable to be quashed by High Court judges. The police had only provided the court with ‘bare assertions’ rather than hard evidence.
A High Court judge was advised, ‘The gross interference in privacy outweighed any benefit to the investigation.’
The file concludes: ‘This is a remarkable and untenable case of guilt by association’ that trampled on rights to privacy enshrined by Article 8 of the European Convention of Human Rights. This guarantees all individuals the right to privacy, barring states from intruding unless serious crimes have been committed.
Siobhan Egan from lawyers Lewis Nedas added: ‘The police had also made some bizarre errors.’ The POCA legislation barred the seizing of legal papers but they had five crates belonging to Temerko.
The police changed course. They notified Temerko’s legal team that they were now acting under the Criminal Justice and Police Act, which allowed such privileged documents to be held.
‘However, this law can only be invoked when a written notice has been given to everyone, box-holders and vault owners,’ said Egan. Alerted, the police ran around serving the directors of the Park Lane vault and their box-holders with written notices – without realising that the law could not be applied retrospectively, and that the notice had to be handed over ‘at the time’ of the raids.
On June 4 2009, the Met caved in. Temerko was offered an agreement. In exchange for dropping his Judicial Review, all five crates of his documents were returned ‘in sealed police evidence bags’, with the police even agreeing to pay his costs, as well as accounting for their own, a combined figure estimated at more than £250,000. In return, the Russian agreed to keep ‘the terms of this consent order confidential’. His silence had been assured. The Selts won too. A similar deal was offered to them, their goods returned and costs paid.
Statistics were by now causing the police significant problems. Mark Taylor, a former fraud investigator for HM Customs and Excise, now an associate director of Vantis, an accountancy firm advising families caught up in Operation Rize, kept a tally.
Of the 6,717 boxes targeted by detectives in the biggest raid in the Met’s history, just over half were occupied. And of those that were full, 2,838 boxes were now handed back, a figure that represents 80 per cent of the number of boxes seized.
Eight out of ten box owners were provably innocent. Taylor said: ‘Of the £53 million in cash that the police took, £20 million has also been given back and £33 million is now being referred to as “under investigation”, of which only £2.83 million has been confiscated or forfeited by the courts.’
This figure represents just over five per cent of the total money stored in the vaults, although the Met has 690 ‘ suspect’ boxes that it is still investigating.
That means of the total number of boxes, around ten per cent are being probed for villainy, a long way from the nine out of ten cases the Met surmised they would find while wooing Judge Macrae.
Lawyers have seen their Rize cases squeezed and intimidated. Sara Teasdale revealed how the police were first adamant that her client’s money was criminal cash, threatening forfeiture, only to try and turn the box-holder’s business partner against him, enticing him to wear a wire so as to entrap him into admitting it was also money stolen from his own company.
Teasdale said: ‘They first tried “wrong money”. Then it was company money. Even when they dropped criminal proceedings against him in February 2009, they inexplicably continued with civil forfeiture proceedings.’ The Yard was trying all it could to get the cash.
‘They were sitting on almost £1 million, and having referred to my client anonymously in press releases as an example of why they had raided, they needed to win.’
But this case was recently lost by the Met too, leaving the box-holder with £200,000 in fees, money he is now seeking back from the police.
Others going after the Yard include some who claim that money and jewels have gone missing from their boxes. Many have spoken to Live about their plight, although they have asked not to be named because the information is personal.
One goldsmith from north London fought for over a year to get his £40,000 cash and valuables back, then claimed it was not all there. He has now filed an official complaint.
‘The police kept saying, “Why have you got all this cash?” and I showed them my books.’
His premises were raided twice, the second time by 20 officers.
‘They found nothing because I had done nothing and eventually this summer, everything was returned to me. But £10,000 was gone – and my wife’s diamond earrings.’
The Met has strenuously denied all allegations of theft, pointing out that anyone stealing from the boxes would have been caught on camera since officers videoed the entire operation.
Another box-holder who is alleging theft, a wealthy Russian émigré party-planner from north London, who had £64,000 in cash and £250,000 worth of jewellery, including heirlooms from Russia, successfully challenged the police to produce the video.
‘I am meticulous,’ she said. ‘I have a receipt for everything. When I got my box back, £9,000 cash and some smaller items of jewellery were missing – a gold baby’s bracelet and an 18-carat gold ring.’
The initial police footage, she claims, had a time code and showed her box being carried to a table. But then the tape was interrupted and when it restarted the footage was being shot from a new camera, at a different angle and without a time code, with real time having moved on many seconds.
She told Live: ‘It only takes seconds for a small envelope of cash or a gold ring to be swiped from the table and into someone’s pocket. I was staggered.’ After failing to get adequate answers from the Met’s own Directorate of Professional Standards, her lawyers have gone to the independent Police Complaints Authority, along with 70 other box-holders.
The Met maintains Operation Rize was an absolute success. DCI Ponting said: ‘The MPS is committed to targeting those who benefit from the proceeds of crime, restraining and confiscating criminal property and seeking to forfeit cash and assets under the Proceeds Of Crime Act 2002.
As in the case of Operation Rize, this legislation enables the police to reduce harm to communities, disrupt criminal networks and take out community criminal role models. By taking the cash out of criminal lifestyles, money is put back into the public purse and contributes to restoring community confidence.
‘In 2008/9 the MPS deprived 4,787 criminals of £21 million. Comparative figures for 2002 are 239 criminals deprived of £1.5 million. In addition to £21 million actually permanently deprived from criminals, the MPS also has a cash balance of £40 million detained under POCA awaiting forfeiture and perhaps as much again in restrained assets. This equates to over £100 million in all, of which Operation Rize has been a major contributor.’
Detective Chief Superintendent Nigel Mawer from SCD6 added, ‘Rize continues to be a hugely complex inquiry. We still have almost 700 boxes under active investigation as well as a number of trials pending.’
However, Lawyer David Sonn said: ‘Would an operation like Rize ever be run again? I doubt it.’
Facing hefty fees for defending itself before two Judicial Reviews, being pursued for millions of pounds in legal fees by innocent box-holders, and now facing inquiries into theft, the political, judicial and financial costs of the operation are beginning to stack up.
And yet when it first kicked off, one of the things that had endeared Rize to everyone was its revenue-earning capacity, something revealed in a tucked-away minute of the Metropolitan Police Authority from September 2008.
Warning that the police were lagging behind in meeting targets set to seize criminals’ assets, it stated: ‘To achieve the target a further £36.6 million of assets need to be seized in the remaining nine months.’ This was ‘a challenging target’. However, ‘with the emerging results from Operation Rize, the seizures are likely to make a major contribution toward the final total.’
In fact, the operation may end up costing the taxpayer a fortune. Rize has certainly helped put a number of hard-line criminals behind bars, but at what cost?