by Mike Walsh
This is the moment of pure joy. The intensity of that ecstatic pleasure is measured by money. The amount of money made in the deal is the measure of the deal maker’s abilities, his craft, his craftiness, how smart he is. Money, value, profit are what make the deal into a religion. The intensity of the deal-making experience is what creates the true adept, the truly great man. And he is to be revealed to the rest of us by his wealth.
Van Hoogstraten likes to talk about his deals. When he does, his eyes shine with pleasure at the memories they evoke, a trait shared by other wheeler-dealers. He once boasted to the authors over lunch how he had ‘obtained’ some property and within an hour had transferred it through eighteen different companies so that its passing through his hands would be hidden for ever. The description of this frantic and complicated activity was intended to show the entrepreneur’s cleverness, his ability to outflank his opponents and therefore how successful and wonderful he is as a person. Those not motivated by money will never really grasp this. How could they? They are not believers. It is not their religion.
By the late seventies Van Hoogstraten already considered himself a copper-bottomed success. He said: ‘I am … safer financially than Paul Getty or Howard Hughes ever were. I will never end up like them because I will never fall for the trap that these two incredibly powerful men fell for – that of showing even the slightest compassion or sentiment to other human beings. So in that way I am hard-hearted. I view people as trash, just trash.’
The interview concluded with an observation on the importance of that amassed fortune. ‘It has been said that no man is an island. Well, I am. Money gives me the power to get and demand what I want. I want nobody. I need nobody… I ask nothing of anybody other than the right to go on with my life the way I want to lead it not as others would run it for me.’
Van Hoogstraten went to huge lengths to insure against the outside world finding how he was making that money. He developed webs of interlocking companies, whose sole purpose seemed to be buying and selling between themselves. Assets were transferred back and forth bewilderingly. A Van Hoogstraten-controlled company would bid for a property at auction, pay for it with a loan from a second Van Hoogstraten company, then sell to a third Van Hoogstraten company, which in turn would pay for it by raising a mortgage from the first company. The third Van Hoogstraten company might then sell the property on to yet another company in the Van Hoogstraten web – or back to the company which bought it in the first place. It was deliberately confusing, fooling creditors, tax investigators or hacks – as it was meant to do.
Some companies had names which gave them away as Van Hoogstraten operations. Nassau and Hamilton Investments and Hamilton Prior were two. Both were named after his favourite spot in Bermuda. Other company names reflected his macabre sense of humour. One was Tombstone. Others were Ripe Profit and Rarebargain.
Van Hoogstraten sometimes operated personally under a variety of improbable names. Reza Ghadamian was one. Adolf von Hessen was another. In the eighties he changed his name to the latter by deed poll and retained a passport in that name. He also called himself Dr Karl Brunner and Nicholas Hamilton.
Mysterious foreigners popped up time and again as directors of his companies. One was Pierre Mouchin. Van Hoogstraten always said that Mouchin was a Parisian brothel keeper. There were also Africans with postbox addresses in Nigeria, and Europeans – judging by their names – with addresses care of the Turks and Caicos Islands and other tax havens.
What made this web still more difficult to penetrate was that Van Hoogstraten didn’t call the tune all the time. In some cases he lent money to an associate for a specific acquisition and let the associate get on with ‘turning it round’ at a profit. The onus was on the associate. If he couldn’t do it and didn’t repay Van Hoogstraten the interest rates he charged, the tycoon simply repossessed the property. His victims included his friends.
The odd part of it is that most of these friends remained in the fold. Another property dealer recalled how one, a large, dreadlocked West Indian called ‘Karate Frank’, had a shop he owned and everything in it ‘repossessed’ by Van Hoogstraten’s men. The dealer says he was invited along by Van Hoogstraten ‘to see the fun’. Yet Karate Frank was reportedly back acting as the tycoon’s bodyguard in 2002.
After Van Hoogstraten himself, the key figure was the Fagin-like Bill Bagot, the slum landlord from Paddington. He and Van Hoogstraten were partners in all kinds of moneylending and other ventures. The old man with the red waistcoat running with silverfish felt close enough to his younger business associate to make him his heir. Shortly after Van Hoogstraten’s release from jail in 1973, Bagot made out a will leaving all but two of his buildings to him. Well before his death twenty years later, a lot of his stock is thought to have already passed into Van Hoogstraten’s control.
Occasionally the outside world had a glimpse into some of the workings of the business world inhabited by Hoogstraten and Bagot. In 1977 an investigation showed a Hove-based company called Masterzone Finance was involved in fraud.
The company had applied to the Department of Trade for a moneylender’s certificate. It proposed to make loans of between £1000 and £30,000 a time, charging interest rates of up to forty-eight per cent. The documentation with the application showed that the company’s seed finance was from a hefty mortgage – 300,000 Swiss francs – with a subsidiary of the Swiss Banking Corporation. Something about that must have smelled, because the Department of Trade decided to track down Masterzone’s Swiss funders – and found they didn’t exist. The Swiss Banking Corporation had no knowledge of any dealings with Masterzone.
Police homed in on who was behind Masterzone. The pointers could hardly have been stronger. Masterzone shared an address with Van Hoogstraten’s company Hamilton Prior. According to Masterzone’s books, it had made a loan to another Van Hoogstraten company. Its list of directors included two names known to be used by Van Hoogstraten himself (Reza Ghadamian and Karl Brunner). A third director was Bill Bagot. And the company secretary was Ron Dedman, another long-term associate of Van Hoogstraten.
The police now moved in and interviewed the seventy-one-year-old Bagot. He gave nothing away. No, as far as he knew, Van Hoogstraten had nothing to do with Masterzone. What about the loan to Van Hoogstraten’s company? Bagot said he knew nothing about it. When it was made he had been ill in hospital. The police pressed him. He was adamant. Van Hoogstraten was not involved.
Filing false information wasn’t a major crime, and the police did not pursue it. However, Masterzone’s application for a moneylending certificate was turned down. Van Hoogstraten would not have been happy.
His attitude to the laws of the land in this period was totally cavalier. They were a challenge – to be circumvented, defied and wherever possible mocked. In 1978 creditors moved in on Getherwell Finance Ltd, so Van Hoogstraten decided to bankrupt the company and to claim that his henchmen were its main creditors. It was a farce and Van Hoogstraten made that all too obvious. At one creditors’ meeting he nominated Donald Duck as trustee of the bankrupt company. Later, in court, he had Robert Knapp, calling himself Robert Pierson, claim to be a creditor of Getherwell. Knapp nominated Grumpy, Bashful and Sleepy as members of the committee of inspection that the law required to oversee the liquidation.
In other courts Van Hoogstraten’s childish brand of humour sometimes gave way to paranoid outbursts. In 1977 he went to court to watch a case involving Robert Knapp. Suddenly he shouted at the police barrister: ‘You had better be very careful… People like you are party to the corruption and when it comes to the reckoning it will be people like you who are dealt with.’
Police officers grabbed him and took him off to Hove police station. When he was searched and a four-inch roofing nail was found in his pocket, he said that it was for defence against muggers. At the time he was wearing a two-thousand-year-old Egyptian necklace made of gold and worth ‘in excess of £100,000’. He was charged with threatening behaviour and carrying an offe
nsive weapon. In court his counsel argued that his client was well known to be very rich and so was open to attack.
The magistrates were not impressed. Van Hoogstraten was fined £100. Naturally, he appealed.
Much, much worse was about to befall him. What he didn’t know was that in the mid-seventies a secret investigation had begun. The Inland Revenue were after him. By 1979 their investigators were ready to pounce. The man who claimed to be more secure financially than the legendary Paul Getty and Howard Hughes was about to be clobbered by the taxman as no one had ever been clobbered before. The outcome would stagger everyone and the size of the payment would put Van Hoogstraten’s name in the Guinness Book of Records.
The Revenue told him it wanted £2.9 million he owed in unpaid taxes. He didn’t pay. So in August 1980 the Revenue secured a High Court order freezing a huge chunk of his assets, including High Cross, various other properties, a Rolls-Royce and a Cadillac and even his beloved stamp collection. The total value of the seized assets was reckoned to be close to £3 million.
Without a hint of irony Van Hoogstraten subsequently painted himself as financially naive. ‘I was living abroad in Liechtenstein and I didn’t think I was liable to pay tax on my UK assets but I was.’
He reacted to the blow by trying a favourite dodge – the use of front companies to squirrel property away and thus minimise his assets during the Revenue’s investigation. Bill Bagot was the key to the strategy. In the weeks immediately after the seizure of the assets two companies on which Bagot was a director ‘bought’ £150,000 of Van Hoogstraten properties in the Brighton area.
But Bagot and Van Hoogstraten slipped up. The Revenue discovered that Bagot was a partner in a company selling the properties as well as in those buying them. The sales were a sham.
A vain struggle now began to get to the bottom of Van Hoogstraten’s finances. When facing a huge bill he was at his most slippery. The Revenue demanded jail for both him and Bagot for defying a court order banning Van Hoogstraten from getting rid of assets. A judge ruled that out. The taxmen then demanded that both men be made to produce the sale documents. Amazingly, the courts ruled against that too. Van Hoogstraten’s counsel successfully claimed privilege on the grounds that his client might incriminate himself. The Revenue couldn’t even force the two companies who were supposed to have purchased the properties to produce their receipts.
The taxmen’s investigations into Van Hoogstraten’s business empire would stretch over four years. While they ferreted he was busy finding ways to reduce his apparent income. Some 150 of his properties had been sequestrated. Although that meant he couldn’t dispose of them, he still controlled them.
As many as fifty of the seized properties had no tenants. They had been emptied before the Revenue struck. Van Hoogstraten wasn’t going to spend money on maintaining them. Most were boarded up and left to moulder. Some became notorious local eyesores. At various times councillors talked hopefully of compulsorily purchasing them, but it was just talk.
The biggest property of all – High Cross – mysteriously burned down during a rainstorm in the early hours of one morning in April 1983.
An anonymous 999 call alerted the fire brigade shortly after midnight. Flames were already shooting through the timber-framed roof as they arrived. Van Hoogstraten turned up in his Rolls, and watched from beneath an umbrella as forty firemen struggled to contain the blaze. Uncharacteristically, he said nothing. The fire was so fierce the firemen had to withdraw and watch as the roof collapsed. All they could do was prevent it spreading to outbuildings and cottages. The entire house was gutted. The next day Robert Pierson refused to let reporters on to the property.
CID and fire investigators probed the causes of the fire. The ferocity of the flames strongly suggested arson. ‘We are treating it as suspicious,’ the police announced.
Van Hoogstraten didn’t disagree. The fire had been started by ‘left-wing anarchists’ as part of a vendetta against him, he claimed.
Two others among his sequestrated properties were hit by arson around this time. In one case a gas pipe was deliberately severed and a lighted candle left next to it. Had the gas ignited it would have blown up ‘half of Hove’, according to the fire brigade.
Again Van Hoogstraten blamed left-wing anarchists.
No one else appears to have taken that idea seriously. The tycoon himself looked a much more credible suspect. Was he after the insurance? That was an obvious possibility. High Cross was reputedly insured for £1 million. That idea was put to Van Hoogstraten, who dealt with it with his usual brio. He replied that claiming that kind of money just wasn’t worth the bother.
Very quickly after the High Cross inferno there was an agreement with the Revenue. Only the broad outlines were ever revealed. No one ever discovered enough to know which side won. But the Revenue seemed to have done very well. Van Hoogstraten was reportedly to pay £5.5 in back tax and interest, half of it immediately, the rest over a period of two years. Against that all his assets – the known assets – were his again, and the charges against him and Bill Bagot were dropped.
Van Hoogstraten claimed to have learned one big lesson, thanks to the Revenue. He explained it to the magazine Business Age: ‘It was the Revenue officials who really helped me out by saying you’re crazy to put everything in your own name. You’d be much better off, £5.4 million better off, if you transfer assets offshore. So now I own very little. It’s all in trusts and tax haven companies that can’t be traced back to me.’ Years later he would boast that not a single one of his assets was in his own name.
To return to 1983, what was to happen to the ruins of High Cross? Van Hoogstraten says that he was in a quandary. ‘After the old place caught fire we were faced with the problem of what would we do with it. Totally abandon it? At one time I was thinking, get rid of it. It’s bad news.’
In fact he already knew exactly what he wanted to do with it. He would make the clairvoyant’s prediction come true – by building his white-marble palace on the site. He’d call it Hamilton Palace. A search through company records shows that Van Hoogstraten set up a company with that name eleven months before High Cross caught fire.
He kept the idea of building a palace there secret for several years. Then he played it so carefully that a young architect agreed to design the huge structure for almost nothing, believing that he – not Van Hoogstraten – had conceived the idea in the first place.
The architect was Tony Browne. He’d become one of Van Hoogstraten’s tenants in 1980, while studying for his degree in architecture at Brighton Polytechnic. Van Hoogstraten started to use him on work that would normally go to a fully qualified professional and would command a professional’s high fees. Tony Browne was cheap labour.
His first job for Van Hoogstraten was a tree survey at High Cross. Browne remembers it vividly. He made the mistake of taking a friend to see the estate and the friend was terrified just by the sight of Van Hoogstraten. ‘There was a roar of a powerful engine and he was suddenly there in front of us in a black Corvette. He was wearing dark sunglasses and undertaker’s clothes, it looked to us. My friend, who had heard of his reputation, took one look at him and disappeared through the hedge.’
Browne, who was made of much sterner stuff, stuck around. He was fascinated by Van Hoogstraten. ‘He thought outside the envelope … if there was a problem he’d come up with a solution no one else would think of. It might be so totally over the top that it was crazy, but sometimes it wasn’t.’ Browne had more practical reasons, too, for attaching himself to Van Hoogstraten. The tycoon entrusted him with enough work to make any recently qualified architect go green with envy. They included ‘major design projects’ and, eventually, the management of the Van Hoogstraten properties in Brighton and Hove.
The biggest project of all came his way after Van Hoogstraten learned that Browne had to design a major building for his postgraduate degree. Not a building that would ever be commissioned, but a fictional project. Van Hoogstraten let drop his idea
about a palace, and they talked. Why should Browne’s postgraduate project be fictional? Why not design Van Hoogstraten’s white palace?
Designing a one-off building of any size is an expensive business. A modest three-bedroom house involves a few hundred calculations and five drawings. In the mid-eighties an average architect charged about £3000 for such a job. Van Hoogstraten wanted something bigger, richer than Buckingham Palace, plus fantastical trimmings. It involved some five thousand drawings, plans, drawings and calculations. An established architect would have charged £200,000 for the job. Tony Browne agreed to do it for just his expenses. They came to £2000.
Van Hoogstraten was very happy. He commissioned the project and appointed Browne architect. The idea planted by the clairvoyant was to become reality. Van Hoogstraten said later: ‘I didn’t make a conscious decision. It just sort of happened.’
Browne was equally happy. He had the kind of commission no other British architect had been given in a century.
Van Hoogstraten went public about the project in February 1986. He was going to build an ‘art palace’ for his treasures, he told the local paper. It would display his ‘massive collection’ of French furniture and his paintings, including his Turners and his Holbein.
‘I am not going to do anything ridiculous or fanciful,’ said the tycoon. ‘I am not building anything that looks mad like some fairytale castle.’ The finished building would look like the palace of Fontainebleau in France, he explained.
It would be six hundred feet long and be on just two storeys. His collection would be housed in one vast piano nobile, the elevated main floor running the entire length of the building. There would be frescos on the ceiling and tapestries on the walls.
Browne was quoted as saying: ‘We are going for a stylish elegance, avoiding all crudity in design.’