Page and his wife also gave a flavour from the witness box of the brown envelope culture at SO14. Laura told the court: ‘I’ve met quite a few police officers and given them cash and I know quite a few of them had home improvements and holidays that have never been brought up … we’ve been homeless for four months with five children. These people have still got their homes.’
On 27 July, the jury returned a not guilty verdict. Page clapped his hands and, like all hopeless gamblers, thought his luck was changing.
‘I’m on a roll, love!’ he exclaimed.
The verdict stunned the DPS. The next day Paul and Laura Page were informed by letter that they should attend Grays police station. On 1 August, the couple were arrested and interviewed under caution for deception and money laundering.
Laura made no comment and was released on police bail. Page gave a prepared statement rather than answer DPS questions. He was concerned about the poor disclosure and complained that files taken from his home during the 2 March search were deliberately ‘lost’ because ‘it may be embarrassing to the Metropolitan Police and the Royal Household’.
Addressing the fraud allegations, he said:
I did not at any time mislead investors or prospective investors. All persons were fully briefed and understood that they were taking part in a spread betting syndicate. However, I also explained that should the spread betting be less successful than anticipated there was a safety net of equity on completion of the barns development. In any event this equity was not realized due to charges being placed upon it by panicked investors and this led to the property being repossessed … I prepared a brochure as a specimen in anticipation of future business I intended to conduct. The reason the guarantee [that investors’ money would be repaid] was on the contract was because I was advised to include it by a number of police officer investors who wanted to use it to show their wives and for it to appear to their wives that there was less risk than there actually was. All investors understood that I could not make such a guarantee. As a result of this venture I’ve lost everything, including my home. I wish to express my regrets regarding the losses that have been suffered by investors but to stress that they were fully aware of the risks. And I believe this allegation has come about as a result of bad feeling from persons wishing to blame me rather than accept responsibility for their own actions.
Elsewhere, a much bigger Ponzi-type scam was starting to unravel and, like Page, those responsible for it were looking for other people to blame.
Rumours were swirling around the City that big European banks were about to take a massive hit. The rumours were confirmed eight days after Page gave the DPS his prepared statement.
On 9 August, the European Central Bank announced that 49 banks were to receive 94 billion euros in cash, three times the normal level of demands. The cause was defaults on subprime mortgages, and the reason for the increase in defaults was that the adjustable rate mortgages had risen from their low teaser rate to a higher one and households couldn’t repay.
In other words, banks had deceived many low-income customers into buying a house without explaining properly that the interest rates on the mortgage could go up and their house could be repossessed when they couldn’t pay. But before the wave of repossessions and homelessness took hold, the banks often sold these high-risk subprime mortgages to investors looking for high returns in a low-interest-rate economy. Ratings agencies too close to the banks and brokers facilitated the mirage by giving false reassurance to investors that these toxic, mortgage-backed derivatives were safe or low risk.
That month, US president George W. Bush gave a cynical speech on the overly optimistic assumptions about the housing market and irresponsible lending, forgetting his own administration’s role in both. Bush said it was not the government’s role to bail out those who had bought houses they could never afford. It would, however, soon become the role of governments to use taxpayers’ money to bail out the banks that had orchestrated this Ponzi-style deception on international investors and the less well-off.
On 13 September 2007, Robert Peston, the BBC’s business editor, broke the news that Northern Rock, the fifth biggest UK lender, had asked the Bank of England for an emergency loan. The following day saw a full-scale run on the bank as customers queued round corners to withdraw their savings. Northern Wreck, as it came to be known, held almost 19 per cent of UK mortgages.
Four days after Peston’s scoop, the government stepped in to guarantee all remaining Northern Rock deposits. The share price of international banks started to dive and they stopped lending and started hoarding money to prepare for the hit they were about to take.
Still thinking he was ‘on a roll’ after his acquittal, Page tried to reactivate his CMC spread-betting account in late September. His call was put through to Gina Plowman, a client relations manager. Page was unaware she was also the one dealing with Baree over his £41,000 debt and under court order had provided the DPS with details of six other CMC accounts connected to Page.
Laura was livid when her husband told her that CMC would not re-open an account because of the outstanding money owed by Baree. It didn’t help that the person imparting the bad news was a woman. Laura had no love lost for Baree, who had given CMC the letter from Page accepting responsibility for the debt.
‘Basically, I don’t know if my husband explained the situation to you,’ she told Plowman by phone. ‘But [Baree] asked my husband to sign that letter because had my husband not signed it [Baree’s] wife was going to basically tell him to leave because she didn’t know he had such a big debt … So my husband signed that basically, I told him not to and he did it for a friend,’ Laura explained.
Plowman agreed it was Baree’s responsibility to monitor whoever used his account but said politely that CMC was not interested in doing any more business with her husband.
£ £ £
On 24 October, the couple returned to Grays police station to answer bail on the fraud case. The DPS had nothing new of consequence to put to either of them. Laura again gave no comment, while in another interview room her husband explained that he too was being tight lipped because the DPS investigation had been ‘corrupt from the very start’.
Page then left the police station for a meeting in London with the Insolvency Service about the collapse of ULPD. In this interview he was completely different: respectful, expansive, confessional and contrite, although at times self-serving. It would be the first time that Page gave more than a flash of the defence he was going to run if the matter ever got to court.
The official soothed Page’s concern that the DPS would use the interview to build their criminal case against him. ‘They are able to use the information to guide them in their own investigation,’ he told Page as the tape recorder whirled, ‘but they are not allowed to use anything you say here to then follow up with criminal proceedings.’
‘I have a slight issue with that, but what I’ll do is attempt to answer any of your questions that you put to me honestly and fully,’ Page replied. He then started the remarkable interview with a startling admission.
‘I have not and never did follow, if you want to call it, proper business procedures,’ he told his inquisitor. ‘Would it be beneficial to you if I sort of started off with how, you know, United Land & Property Developments came about or do you want me to just answer questions directly?’ The official gave way.
Well, if I start with, back in the late 1990s, obviously for the purposes for the tape I’m a police officer currently suspended. Back in the late 1990s, I was serving, when I’m still attached to the Royalty Protection Department based at Buckingham Palace. At the time, during the period of 1998 through to 2001, I believe, I became involved in share dealing to quite a major scale. I believe in that period of, just a short period of about eighteen months, I turned over about £3 million of shares value wise in different deals. That was perfectly legitimate. What became apparent to other officers was my wealth. This interested a large amount of other offic
ers. It was no secret I dealt in shares because it was always on the telly in the canteen. I was always on the phone speaking to my share advisor, stockbroker and obviously people began to be interested and wanted to know how to make money.
I made money, lost money, but I made substantial amounts. I then created a private club called the Currency Club, which was purely for police officers. Basically, I pooled resources of a number of officers, Royal Protection Department, if I was going to mention figures, maybe £150,000 accumulated from over ten officers. I was basically trading currency through various spread-bet accounts. This was all tax-free. I ran the whole operation from one screen and I would decide what was bet on and what wasn’t. Profits were withdrawn in cash, I would count it, put it in envelopes, take the money to work. It was then distributed via other officers to different royal palaces. It started to become very big very quickly. People were earning, you know, a quarter of their wages each month and I, you know, I drew this to the attention of senior officers and there were quite numerous times I was just asked to tone it down, not have it on police radios. Stuff like that. We basically got a bit worried that, you know, I was working at the royal palace and things were being mentioned on the radio whilst bodyguards were with the Queen, you know, basically what happened things got a bit naughty.
I could see it growing. Other people were helping me. It was like a tier system. I was at the front. There would be some more people who deal but as you can appreciate, police services are like a bonded unit. People will not invest their money unless they know what’s going on, who the person is running it and yes, I ran that for quite a while and it grew and it grew until, you know, there was in excess of 130 to 150 officers involved.
The position came when I sat down with other officers and had to work out a way of – I couldn’t be at work controlling as much money as I was – I mean, we were handing out £30,000 to £40,000 a month; police cars were driving all different parts of London or I’d drop off money to places at work. If I said to you this money probably wasn’t declared, I’m not going into the realms of naming loads and loads of officers and ruining their careers. I ran everything. It was down to me. I don’t know who declared what, yes? So I’m not accusing anyone of tax dodging or nothing like that. What I did was I created a system and I ran it the best I could and then we progressed to how ULPD came about.
I wanted to get out of the money markets because it was physically demanding. It was wrecking my home life. I was working twenty-four hours a day sometimes. I was working the New York markets, the English markets, the Japanese markets, the Hang Seng, the Chinese markets in gold and currency and indexes and it started to take its toll of me. I did branch out and other officers were tasked with watching certain markets at certain time periods. I actually paid officers to work for me on post. I would have to outsource my job to someone else who was on annual leave or whatever and they would be paid in cash and work it. On the books it would just show a straight swap.
Anyway, so attention started to be drawn to what was going on. I mean, I was driving a brand new Mercedes car, all legitimate. As I said, it was wearing me down but obviously people did not want me to give up whatever because it was, you know, large amounts of money, and it was a case of well, what do I do? I need to get out of the job but I can’t walk off and say, ‘Well, I’m running the spread-betting book’. Obviously there was sports gambling involved in it as well, football, as well as other areas. And I sat down and had a meeting with other people and they said, ‘Well, why don’t you create a company’. I always wanted to do something in the property arena and I think this idea that I would gradually move out of the spread betting, you know, currency trading and we would all move into the property sector and I would buy, which I did. My idea was, you know, I’ll create a property company and I’ll use that as a vehicle and will gradually come out of the spread betting into the property sector.
Page then explained how he went to Mortgage Guarantee, a firm for those with poor credit. He put in a portion of the syndicate’s money as a deposit, he claimed, but couldn’t remember how much.
Because don’t forget, at that time I was controlling millions, yes, and once we opened this company we pushed it on to quarterly payments to get the pressure off me having to accumulate thirty to forty thousand pounds every month. So at least I had three months to do it. What I wanted to do was I wanted to get away from that fast-track sort of life and go into, I won’t use the word legitimate because everything I’ve done, as far as I’m concerned, has been legitimate, although things have happened and I’m sorry for what’s happened but, in my eyes, everything I’ve done has been legitimate.
Page explained how trust was a big factor in his scheme. He receipted people whose money he took but never asked for receipts for the cash returns paid out. The reason? In the event the taxman suddenly turned up, Page didn’t want paperwork around for his legitimate business.
I had the main job of dealing with the finances and, you know, all the running of twenty, maybe thirty, spread-bet accounts all over the place, all over the country and my main role was to keep things rolling over. I mean, I don’t know if you know it but there’s very wealthy people involved with me and there’s professional footballers from the different clubs and a gentleman called Sharma, I mean his business is worth £100 million. And I’ll say it for the purposes of the tape. It grew to people outside the police service including members of the Royal Household. My idea was I wanted to legitimize myself in a less stressful environment … It got too much for me. We started taking heavy losses. I’m not going to blame any individual. It was my, I had a think, it’s all my fault, right?
£ £ £
The next day, Operation Aserio detectives interviewed Page’s father at Plaistow police station. The DPS officer said:
We’re conducting an investigation into fraud and money laundering in relation to a company called ULPD run by your son. It is suspected that Paul Page obtained money under false pretences and that money was passed through various accounts in order to disguise it. Our inquiries have revealed that some of these monies were paid into a NatWest account in your name. Cash was then moved from this account into a spread-bet account called CMC, which it is believed, was set up by you. Can you give an innocent explanation as to what you knew about the monies going through your bank account and the CMC spread bet account?
On legal advice, sixty-one-year-old Terry Page declined to comment and was arrested on suspicion of money laundering. Operation Aserio was right to be asking these questions but had so far limited its circle of interest to Page’s family.
The next to receive a visit was Laura’s mother. At 8.50 am on 4 December, Detective Constable Gary Tucker gave the same preamble with a slight variation:
Our inquiries have revealed that some of these monies were paid into two of your accounts, an Alliance & Leicester and NatWest account in your name. Cash was then moved from these accounts into a spread-bet account called CMC, which it is suspected was set up by you. It is also suspected that these monies were also used to pay other third parties, including your daughter, Laura Page, and that cheques were issued on your account to investors, which bounced. As a result I am arresting you on suspicion money laundering.
Marie Keenan was stunned: ‘All I did was let him use my bank account. That was all I did wrong. I didn’t think anything of it when he asked me to set up the CMC account,’ she said.
The DPS searched the house. In her bedroom, on the top shelf of her wardrobe next to memorabilia about the Royal Family, banking documents were discovered and seized. She was then taken to Grays police station for interview, but gave a prepared statement instead in which she said Page was essentially an honest boy.
He was infuriated to discover his seventy-five-year-old mother-in-law had been lifted. At noon Page arrived at the police station on a mission to get her out. ‘Can I speak to the duty sergeant?’
‘And your name is?’ asked the civilian at the desk.
‘Paul Pa
ge. Tell him I’m a suspended Met police officer. I used to work here when I was at Essex.’
Minutes later the sergeant appeared and ushered Page into a consultation room. Page explained he was concerned for Marie Keenan’s welfare but clearly wanted to send a message to the DPS.
According to the sergeant’s pocket-book note, over the next twenty minutes Page explained about his ‘spread betting syndicate that included numerous police officers, including royal and close protection officers’. He told the sergeant for the first time that ‘police vehicles had been used to convey betting money to police officers at relevant stations’.
Page accused the DPS ‘monkeys’ of sending him to Pentonville prison so that he would either ‘get done’ or ‘crack’ and roll over. The sergeant’s note recorded the following complaint:
Mr Page stated that 20–30 royal protection officers would need to be arrested as they had done the same thing as Keenan and if they weren’t arrested it would show the Met Police DPS are out to get him … Mr Page stated he hadn’t given names of officers involved because he was loyal to them [but] he had told the truth to Andrew Mackinlay MP.
The DPS was immediately alerted. Three days later, on 7 December 2007, they arrested Adam McGregor at home. He had been promoted to sergeant by now and was working at Paddington police station but commuting from Bristol, where he lived with his girlfriend and young son.
‘I’m DS Mark Beckett and this is DS Tracey Hunt from the Directorate of Professional Standards. Are you Adam Spencer McGregor?’
‘Yes.’
‘Can we come in, Adam?’
‘Sure.’ Adam showed them into his lounge.
‘We are conducting an investigation into fraud and money laundering in relation to a company called United Land and Property Development run by Paul Page. It is suspected that Page obtained money from investors under false pretences and the money was passed through various accounts in order to disguise it. Our inquiries have revealed that some of the monies were paid into a NatWest account in your name. The cash was then moved from this account to a spread-bet account called CMC which it is believed was set up by you. Can you give an innocent explanation as to what you knew about the monies going through your bank account and the CMC spread-betting account?’
For Queen and Currency: Audacious fraud, greed and gambling at Buckingham Palace Page 28