The Iceman: The Rise and Fall of a Crime Lord

by Wilson, Jim

  The skilled fraud investigator said that the Proceeds of Crime Act has already had a substantial impact on the money-laundering systems being put in place but warned that budgetary constraints could undermine the financial offensive against crime gangs. He said:

  The fact that these guys have got copies of the act on their coffee tables suggests it’s working. The difficulties are twofold. One is to keep up with the new methods that criminals will find to move money around and out of Britain’s jurisdiction. The other is to ensure resources are there to fund these investigations as they increasingly become an integral part of criminal investigation. There are clearly budgetary limits for this kind of work. There is also a need to capture the knowledge – for all the expertise being gained by all the different agencies to be pooled.

  In England, an ‘incentivisation’ programme means fifty per cent of the money seized under PoCA is handed back to the police to bolster and extend their financial investigation units. The Metropolitan Police, for example, were given £7.9 million in 2006, with the Home Office recommending that the money should be spent on more financial investigators, training and specialist teams. In Scotland, seized money returned to the police is dedicated to more general initiatives, such as Crimestoppers, which has a free-to-call number for people to pass on information anonymously.

  Milliken said:

  In England and Wales, there is a greater emphasis on funding financial investigation and the sequence is clear – the more you do, the more you can do. There is a snowball effect. That does not seem to be happening in Scotland. The other factor giving financial investigation fresh momentum is advancing technology. Previously, if you were given a hundred pages of bank statements, involving thousands of deposits and withdrawals, you would have had to input them manually to create a spreadsheet. That is a time-consuming process. There are now computer programmes that can scan those statements and create a spreadsheet capable of being analysed for certain patterns or anomalies.

  But, despite advancing technology, the expertise and experience of the forensic accountant cannot be replaced. According to Milliken:

  The skills and experience of the accountant looking at that spreadsheet and knowing what doesn’t look right and knowing where to start unpicking the threads are the key – in the same way, an experienced detective will look at a piece of intelligence and have a hunch that something doesn’t fit, that there is something not right. Everything rests on that expertise.

  43

  We Take Cash

  It was the nightlife that attracted Cory Kerr to Aberdeen, allegedly. According to the unemployed mechanic, he and his two pals had driven 400 miles north from their homes in the Black Country for a good night out.

  Back at home in Wolverhampton, Kerr told reporters the Granite City’s clubland had prompted the trip. He said:

  It was an adventure, a trip. We wanted to go to a different place. If it was drugs money, where were the drugs? Where was the evidence of drugs? What did they find in my pockets connected to drugs? They found money. Money can come from thousands of places rather than drugs. You can find money like that. People find money in bushes and all kind of stuff.

  Kerr and his friends had just made Scottish legal history as the first suspected drug dealers to be stripped of their profits without ever being charged, never mind convicted. It was their misfortune to be stopped by police just after midnight on 8 January 2003 – eight days after some of the powers of the Proceeds of Crime Act came into force. Officers searching Kerr’s Audi found three holdalls packed with just over £2,000 and another £11,700 hidden in the lining of the car’s boot.

  An application to Stonehaven Sheriff Court summarised police suspicions that they had been ferrying drugs from the Midlands to Aberdeen dealers. It noted that ‘the sum of £11,500 to £12,500 is a reasonable wholesale price for half a kilo of cocaine or heroin. There is an established trade route for illicit drugs between the Midlands, and in particular Wolverhampton, and Aberdeen’. The legal papers also reveal how Kerr and his associates refused to explain where the money had come from or why it was in Scottish banknotes.

  At the court on Thursday, 1 May 2003, John Keir, a lawyer with the Crown Office’s new Civil Recovery Unit (CRU), told Sheriff Alexander Jessop, ‘This is a minute for the application of forfeiture of the sum of money seized by Grampian Police.’

  In the trio’s absence, the sheriff took less than a minute to grant the order and usher in a new era for law enforcers working to dismantle the apparatus of Scotland’s crime barons. They could not claim they had not been warned.

  In 1998, Scotland’s mob bosses continued to scan the property pages for the perfect sandstone mansion, discreetly hidden behind the trees, hedges and high fences of the city’s exclusive suburbs. They may also have been skimming through the glossy property schedules for villas in Marbella and luxury condos in Florida. But, that summer, only one property deal mattered to the most astute of the criminals putting Scotland’s drug-ravaged neighbourhoods through the wringer and squeezing out multimillion-pound fortunes. And, when the auctioneer brought down his hammer to sell a small pub on Ireland’s west coast to businessman Patrick Humphries, he set off alarm bells throughout Scotland’s underworld.

  The Paradise Bar looked like an ordinary bar but the previous owner of the green-and-white bedecked Celtic pub was no ordinary publican. He was called Tam McGraw and soon to become the best-known gangster in Scotland. His pub in Donegal had laundered hundreds of thousands of pounds since he’d bought it in 1996 but it was only one of countless businesses rinsing the multimillionaire’s drugs-contaminated cash. His name was nowhere on the paperwork, of course, but that did not matter to the officers of Ireland’s Criminal Assets Bureau (CAB) who seized the pub in March 1998 and sold it two months later. They had been told by colleagues in Strathclyde that McGraw was a suspected drug trafficker and that was good enough for them.

  And, by the time, McGraw’s defence lawyer, Donald Findlay QC, had delivered a bravura display to win him a not proven verdict on the drugs charges, his Irish operation was already in the hands of the police.

  The gangster, known as ‘The Licensee’, walked free from the High Court in Glasgow after being cleared of funding a hash-smuggling run from Spain in July 1998 but his pub was gone along with the £177,000 frozen in its account at the Allied Irish Bank in the town of Donegal. A further £255,000 in another account was also seized, never to be reclaimed.

  The money meant little to this career criminal with more cash than he could count. The gangster, who died of a heart attack in 2007, had enjoyed visiting the Donegal pub but the loss of a front firm could be shrugged off. It was the Irish authorities’ gung-ho attitude towards his dirty fortune which was more worrying, particularly if ordinary Scots began to ask why the men wreaking havoc in their communities seemed immune to the asset stripping that was inflicting financial pain on their counterparts in Ireland. The CAB had won international attention for its impact since being launched in the wake of crime reporter Veronica Guerin’s murder in June 1996 by a Dublin drugs baron.

  Short-sighted rivals may have smirked when they heard of McGraw’s misfortune but the smart ones made appointments with their lawyers to discuss their own financial arrangements. The sudden success of the CAB team and their pre-emptory seizure of cash and property from anyone just suspected of a crime – never mind convicted – could not be ignored.

  It would be almost five years after McGraw lost his pub before Scotland got its own asset strippers, a move inspired by the Irish template. Colin Boyd, then Lord Advocate in charge of Scotland’s prosecutions, said:

  It will make sure, as far as we can, that people don’t benefit from crime. Crime will not pay. Criminals commit crime to make money. Take the money away and it no longer pays. People go to prison and know the nest egg is still there. Take away the nest egg and it’s not worth doing the prison time.

  The CRU, led by experienced lawyer Lorna Harris, scrutinised how the ownership of the mansions
, speedboats and Mercedes could be justified on what suspected gangsters claimed to earn. Her team worked in tandem with the Criminal Confiscation Unit – later renamed the Financial Crime Unit (FCU) – also scouring criminals’ financial backgrounds but their targets, unlike those of the CRU, had to have been convicted before being stripped of their ill-gotten assets.

  Harris did not underestimate the wealth flooding through Scotland’s underworld or how ruthlessly it would be protected. She refused to be photographed in order to protect her identity and, in her first interview, said only a fool would not be aware of the capabilities of her intended targets. She said:

  I’m not going to be these people’s best friend. It goes with the territory. I’m not paranoid about security but I don’t want to be unduly vulnerable. The idea is to hit them where it hurts and that is in the pocket.

  She led a team of a dozen expert investigators. Based in Edinburgh, they had been recruited from prosecutors, police and Customs. Until 2003, the law in the UK meant prosecutors had to prove ‘beyond reasonable doubt’ that money and assets were a result of crime but PoCA changed the level of proof to ‘on the balance of probability’.

  Harris, who returned to Scotland after twenty years in London as a career civil servant, said:

  Police and Customs have always had power to seize cash at borders if it related to drug trafficking but they can now seize cash if someone is walking down Sauchiehall Street. Any money on the move is vulnerable. We’re not going to launch a hundred cases but we will go slowly and test out all our new powers carefully – to make sure we get it right.

  Four years later, in her office at the Crown Office, Harris believes the work of her twelve-strong team of underworld asset-strippers has sent a powerful message to Scotland’s criminals. Armed with PoCA, the Civil Recovery Unit and the Financial Crime Unit – now part of the National Casework Division – they have, between them, seized cash and assets worth £15.5 million from criminals since 2003.

  Harris said:

  Our purpose is to deter and to disrupt criminals and we are succeeding. Crime is a business and, if you remove money from that business, there will be a level of disruption. That money is working capital. They’ve got it from their last drug deal or whatever and it is going to help pay for the next one. Taking that away will cause them problems.

  We target the lifestyle criminals themselves and we help ensure they are no longer role models for others. Without the money, without the profit motive, why commit the crime?

  These are the men who seemingly live on air. If they are not paying tax and not claiming benefit, then how can they afford to service their £150,000 mortgage. There is a mismatch there – a black hole.

  The FCU now routinely freeze a suspected criminal’s recoverable assets as soon as the police launch an investigation. This gives them no time to hide or transfer their fortune. After a conviction, the Crown Office team will ask for a confiscation order to seize those assets permanently. Harris explained that the CRU only target suspects when a criminal prosecution is impossible or has failed to win a conviction. She described a typical example of a criminal’s move up the property ladder, starting when he buys a council house for £20,000 in 1999. She said:

  His house rises in price so, in 2002, he sells it for £80,000 and uses that to help get a mortgage on a £250,000 house in 2002 that, in 2007, is worth £420,000. So what we are now asking is where the £20,000 came from in 1999. He was not convicted for drugs but maybe there was police intelligence that he was a well-kent thief, who went about with drug dealers. Has he any employment record? Has he ever paid tax or claimed benefits? We build up the circumstantial case and then we ask how can he can afford the plasma TV, the holidays, the house.

  It is not just the original dirty slug of £20,000 – it is the dirty slug of £80,000 that was then used to commit mortgage fraud. We will target the property, not the individual. They do not like losing their house.

  However, Harris insists the priority remains the criminal prosecution of Scotland’s gangsters. Only when that is impossible, will her team get involved. She said:

  We are distinct from the Crown Office because we are not a prosecuting agency – all of our cases will have previously been looked at by the police or the Crown before being passed to us. The prosecution of crime is the overarching priority. We will take on a case only when, for whatever reason, there is no prosecution or when a prosecution has not led to a conviction.

  Stevenson and others like him now knew that not only their freedom but also their fortune could be snatched from them. The rules had changed.

  44

  Outlaw In-Law

  Louise Rivers was attracting keen interest from those making money in the criminal economies of Glasgow and Belfast. She was an accountant appointed by the courts to investigate wealthy individuals with no apparent explanation for their fortunes. Armed with the new Proceeds of Crime laws, Louise terrified her targets. She could strip them of their ill-gotten gains – the suburban mansions, the prestige cars with vanity registrations, the trust funds and the shares.

  For these men, it was not a threat to be taken lying down but all that they knew about Louise was that she worked for a company called Mallard Associates from Suite 210, 34 Buckingham Palace Road in London. This address sounds impressive but it is merely an anonymous mail drop – the type of address used by the conmen behind bogus lotteries, miracle medical cures and other postal rackets. More investigation failed to find Louise on the internet where there were no professional qualifications, company directorships or reports of previous inquiries. There seemed to be no record of her or her employers. They were ghosts.

  Russell Stirton was among those most keen to know who Louise was and where she might be contacted. By then, she had been appointed to lead several high-profile criminal asset seizure cases in Scotland and Northern Ireland – including his own. Former soldier Stirton, who friends say was a member of the 4th Battalion of the Parachute Regiment which forms part of the Territorial Army, is married to Jackie, the sister of the McGovern brothers. There may have been some advantage for an ambitious criminal in having such family connections but Stirton also possesses a sharp mind.

  During one 1987 court case, he was described as ‘an alleged drugs dealer and a dangerous criminal who could carry and use guns’. Almost two decades later, he became the first high-profile Scottish casualty of the biting new laws which were designed to bankrupt wealthy organised crime bosses across Britain.

  Strathclyde Police invited a band of TV crews and press photographers to accompany them on a series of dawn raids on 14 January 2004. The police wanted the world to see Operation Maple unfolding in Scotland’s living rooms on that evening’s news bulletins. Stirton was not at home as police piled into his mansion that winter’s morning, the yellow fluorescent jackets of the raiding party reflecting back the glare of the BBC lights. His non-appearance was later attributed to advanced warning from a contact inside the force.

  By March 2003, the Proceeds of Crime Act 2002 had come fully into play and ten months later, Stirton, ‘a builder and property developer’, became its biggest target in Scotland. He and business partner Alex Anderson owned a service station and car wash in Springburn which had been the subject of six separate reports from banks who suspected it was laundering money. The garage was hit by police at 6.30 a.m. but they did not find a cache of .38 calibre revolvers that detectives had been told were being sold from the premises.

  At exactly the same time, police descended on Stirton’s mansion, The Limes, in the affluent village of Mugdock to the north of Glasgow. Jackie, who has criminal convictions for dishonesty, reluctantly allowed officers to enter through the electronic gates and they spent the day searching her home. Neighbours, who had long resented Stirton in their rural idyll, were horrified at the presence of armed policemen. It had been bad enough when he chopped down trees without permission. When Stirton arrived at The Limes, he glowered at the media pack who were camped outside but he remaine
d calm towards the police as they swarmed through his home.

  At least ten other addresses, including homes and three law firms were paid a visit. One business raided was the Springburn HQ of Network Private Hire, Scotland’s second-largest taxi firm which was known to have McGovern links. One of the hundreds of drivers for the firm was later revealed as the councillor for Springburn, Baillie Jim Todd.

  Thomson’s bar, the McGovern’s symbolic haunt and unofficial base of many years, was also paid a visit. It had, until 2001, been part of the chain owned, at least on paper, by Charlie Nicholas and the fugitive Jim Milligan.

  Operation Maple was a large operation involving officers from two police forces, Customs and Excise and the then SDEA. If it was designed to cause panic inside other major Scottish crime groups, then it worked.

  By the end of this long Wednesday, the pub and the service station were amongst the businesses frozen by the tough new legislation. Also restrained by the authorities were cars, bank accounts, cash and several homes including Stirton’s. The Crown Office alleged that Stirton had even laundered dirty money through bank accounts held in the names of five of his six children plus the three children of his murdered brother-in-law Tony McGovern. They claimed that Stirton was ‘reasonably believed to have been involved in the supply of controlled drugs since at least 1983’ and revealed details of police surveillance operations.

  One case monitored Stirton and an Alex Hughson in 1997 on a ferry travelling from Calais to Dover. Also on the ferry was HGV driver Mark Haig, whose truck was carrying kilos of cannabis, amphetamines and a handgun. Once at Dover, the three men met up at a motorway service station and later, during a search in Uddingston, Lanarkshire, the truck yielded its illicit cargo. This resulted in Haig – who was deemed to be the mule – being convicted along with a fourth man who had also previously been spotted with Stirton.