CL-2018-000297, CL-2018-000404, CL-2018-000590, - [2025] EWHC 2364 (Comm)

This section deals with SKAT’s claims against the Other Solo Model Ds, namely the individuals listed immediately above and certain corporate entities of theirs that are also trial defendants, that is to say:

Before turning to say something about the claims pursued by SKAT against the Other Solo Model Ds, I summarise in the immediately following paragraphs their respective participation in the primary events.

Mr Smith was involved in the Solo Model throughout. He was the executing broker at Novus for the equity trades and associated futures trades for Solo Model 2012 trades, and having moved to Dubai he became a stock lending counterparty for 2013 to 2015 Solo Model trades, through Colbrook and other corporate vehicles owned and controlled by him. Also through Colbrook, Mr Smith participated in Sanjay Shah’s covert acquisition of control of Varengold Bank, which is why Colbrook came eventually to be owned indirectly by Sanjay Shah so that it was a Sanjay Shah D in the litigation. Mr Smith was offered by Sanjay Shah a personal commission of 1% of gross dividend amounts for the Solo Model 2012 trades he brokered at Novus, but that was not paid, and in the event his remuneration for involvement in Solo Model trading came from either 0.5% or 0.75% of gross dividend amounts on the Solo Model 2013, 2014 and 2015 trades in which his stock lending companies were involved, all as agreed between Mr Smith and Sanjay Shah. Mr Smith took those rewards through his corporate vehicles, including a Dubai branch of Colbrook (‘Colbrook JLT’) set up with assistance from Sanjay Shah, using (as was commonplace for Solo Model trading participants) the dishonest method requested by Sanjay Shah of Ganymede (or, later, the mini-Ganymedes) being invoiced for services that had not been rendered rather than SCP, or perhaps Ganymede, being invoiced for a participation fee or profit share on the trading, either of which would have been a proper way of describing the real arrangement.

Mr Murphy was the CEO and principal shareholder of Novus. He acted as the executing broker at Novus for Solo Model 2013 trades and again in the first half of 2014, Mr Smith having moved to Dubai. During 2014, Mr Murphy agreed to sell Novus to Sanjay Shah for £2m, and the sale was in due course completed in 2015. In mid-2013, Mr Murphy was a part of Sanjay Shah’s recruitment drive to find additional financial services professionals in the US who might be in a position to set up USPFs to join the Solo Model trading scheme. He was introduced to Mr Fletcher by Mr Devonshire, leading to the introduction of the Standard Credit Individuals to the Solo Model, through Mr Fletcher and the sales pitch meeting with Sanjay Shah and Mr Murphy referred to in paragraph 193 of the main body of this judgment. Sanjay Shah agreed to pay Mr Murphy 15% of tax refund claim proceeds received for the account of USPFs thus introduced to the Solo Model by Mr Murphy, which Mr Murphy took through his company Schmet, adopting the Solo Model norm of false invoicing. He agreed and paid fees to the Standard Credit Individuals for USPFs introduced by them of (according to Mr Murphy’s recollection) about US$80,000 per plan.

Mr Murphy also agreed terms with Mr Fletcher (which for his part, Mr Fletcher regarded as for himself and Mr Devonshire in equal shares) for the introduction of USPFs by him and the Standard Credit Individuals. As I said in paragraph 195 of the main body of this judgment, Mr Murphy dealt dishonestly with Mr Fletcher. He was in fact doubly dishonest: firstly, he told Mr Fletcher that he (Mr Murphy) was getting US$75,000 per USPF, which they agreed should be split equally (meaning Mr Murphy would retain US$25,000 and pay US$50,000 to Mr Fletcher for him and Mr Devonshire), although Mr Murphy’s agreement with Sanjay Shah was in fact for 15% of tax reclaim proceeds achieved, which was expected to be, and in the event was, far more than US$75,000 per USPF; secondly, when that came to light and Mr Fletcher argued that Mr Murphy should be sharing equally (passing on two-thirds of) what he actually made, Mr Murphy told Mr Fletcher that it had been (the Euro equivalent of) US$1.43m, although the true figure was US$6.43m.

In early 2015, Mr Murphy moved to Dubai to assist Sanjay Shah generally, as might be agreed between them, in something of a global ambassadorial role for Mr Shah’s interests (not limited to the Solo Model trading activity). He offered to become involved in the trading itself as a stock lender, but at Sanjay Shah’s suggestion instead arranged for Schmet and three newly incorporated vehicles he established for the purpose to be Solo Model short sellers. By agreement with Sanjay Shah, Mr Murphy was paid for his involvement and took his rewards through his short selling companies, his services company Lanesra Consulting DWC-LLC or his wife’s company LV Consultants, but he fairly accepted at trial that the arrangement was really a personal one between himself and Mr Shah, and all those companies received what they received on his (Mr Murphy’s) behalf. He used the ubiquitous false invoicing method beloved of Sanjay Shah so as to be paid. Through Polaris and Polaris One, Mr Murphy participated in Sanjay Shah’s effective acquisition of control of Dero Bank, which is why (like Colbrook in the case of Mr Smith) they later came to be owned indirectly by Sanjay Shah, although (unlike Colbrook) they are not now trial defendants (see paragraph 31(v) of the main body of this judgment).

Messrs Oakley and Mitchell were involved in all versions of Solo Model trading across the relevant period, as short sellers through Orca and other corporate vehicles they owned and controlled. They were remunerated, by agreement with Sanjay Shah, by 1.75%-2.0% of the gross dividend amounts related to the Solo Model trades in which they participated. They used Sanjay Shah’s dishonest services contract invoicing methodology for receiving that remuneration, which they took through Orca, DDC (one of their other short-selling companies) and their respective personal services companies, PMLO (Mr Oakley) and Neonsky (Mr Mitchell).

Mr Körner was also a trading counterparty for the Solo Model trading throughout. He owned and controlled Körner GmbH (then called CEKA Invest GmbH) and a number of other companies that were variously short sellers or stock lenders on Solo Model trades. Like other participants, his reward for that participation was agreed with Sanjay Shah and was based on the dividend amounts by reference to which the Solo Model trades in which he took part had been structured. Mr Körner invoiced and collected those participation fees through various corporate vehicles using Sanjay Shah’s false invoicing method.