Levene jailed over £32m fraud and greed
Levene jailed over £32m fraud

When I was a small boy I was sent to a new school. Alone in a class of little strangers 'Miss' pointed to one empty chair at the back of the room for me to occupy. I sat down beside a boy with buck-teeth and a welcoming grin. His name was Nicholas Levene and this is his story.

Nicholas Levene is now in the rotting Victorian house of correction called Wandsworth Prison.

It is the beginning of a journey that will take him from beloved family and friends and the gilded world of 21<sup>st century success - "I've Made it Ma! Top of the World!" - into the dark heart of Her Majesty's Prison system.

Maybe he's in his cell now, sitting on a thin bed starring at a grubby wall - 2,000 days to go (with parole) and then there are the nights. He shuts his eyes and he remembers.

It's blazing August and he's aboard a private, floating gin-palace of a yacht - crew and assorted lackeys included - cruising the Cote d'Azure from Antibes to Monaco and back again, conspicuously consuming to the max with the 'Beautiful People.'

Now he is settled in a leather chair 30,000 feet above the Bay of Biscay with his yacht, Lear - one of the havens of ill-gotten gain on his spirogyra of financial machination - nosed towards Gibraltar. He is heading for meetings with spivvy lawyers and a couple of sinister-looking bottom feeders of international finance.

Now Levene is at the green baize table at the Ritz or is it the uber, air-conditioned luxury of the Las Vegas Wynn? The ball is spinning in its glossy grove, whispering sweet nothings as it circles the cauldron below. Suddenly it breaks the smooth trajectory and hits the numbers rack. It's in its manic phase now, irrationally jumping and jerking around the polished, wooden bowl trying to escape the inevitable. "No more bets please, No more bets, Mr Levene," murmurs the croupier of life.

The sphere of destiny's life is ending. Slowly, sadly it dribbles from one slot to the next until it comes to its final, fated resting place. Everyone at the table cranes their necks and gasps. The chips are down and Levene's number is up. Number 13. The judge bangs his gavel and sends Levene down.

These are the hard facts. Nicholas Levene (Beano to his friends, of which I am one) is a crook, a wrong 'en, a "more front then Brighton" conman, who has just been found guilty of a £32 million fraud and sentenced to thirteen years in prison. Back-of-the-envelope calculus by people close to the case reckon another £30m-£150m is still unaccounted for.

Levene's offending began in April 2005 when he persuaded Tadco Limited to part with £571,261 on the pretence he would buy 140,000 shares in Imperial Energy Plc. A year later he duped Timothy Hutchins and Parviz Hakim Rad into handing over more than £1m for shares in Imperial Energy Plc.

Between January and September 2009 he defrauded Julan Shah out of more than more £1.6m for shares in Lloyds TSB, Xstrata PLC, ENEL, and Rio Tinto PLC. Also in 2009 he took £10m from Mr Souter and Mrs Gloag - to buy shares in mining group Xstrata Plc and HSBC.

Levene further admitted to defrauding Philip Bowman and Timothy Clink into handing over almost £500,000 to buy Xstrata Plc and, later, Rio Tinto Plc shares, and taking around £1.6m from Simon Holden, Marvin Mermelstein, Akiva Klein and Jacob Sofer.

Between April and September 2009 Levene pleaded guilty to taking £1m from Glenn Coleman and £1.3m from Russell Bartlett for ENEL and Rio Tinto Plc shares.

His biggest victims, the court heard, were Stagecoach Group co-founders brother and sister Brian Souter and Ann Gloag, who lost £10m to Levene.

Levene, of Barnet, Hertfordshire, admitted 12 counts of fraud, one count of obtaining a money transfer by deception, and one count of false accounting.

Many of those suckered were the have-yachts and have-lots. Super rich money bulimics whose appetite for fast money was so insatiable they were ridiculously easy marks for Beano's Ponzi promises.

But there were also widows who heard of his supposed Midas touch who handed over legacies left by hard-working husbands and are now living out their 'golden years' in penury.

People have also been physically hurt. One London property wide-boy who introduced wealthy 'colourful characters,' looking to get their schwartz millions washed, to Beano for a kick-back got a kick-in when the money disappeared. Beano's life was also threatened and for over 18 months he couldn't leave home without the escort of an ex-Israeli Army minder. Some menacing 'businessmen' from Essex wanted their money back and did not take kindly to being double-crossed.

Meanwhile, it is said that if he were to set foot in Israel, he would be a dead man.

Beano and the Zeitgiest

£32m Fraudster Nicholas 'Beano' Levene Sentenced to 13 Years in Jail
£32m Fraudster Nicholas 'Beano' Levene as a young trader.

Beano's story is a story of our age, mingling with a classic tale of one man's rise and fall.

He personified 'casino capitalism.' Today he is a pariah but he rode the great asset boom alongside the guys who believed their own ego when it told them they were "the smartest guys in the room"

They might have now deleted Beano's name from their Blackberrys but some of the biggest names in banking and property - godfathers of a self-styled financial master race - once hungrily enjoyed his company and most legendary generosity.

Jeremy Issacs, the former head of Lehman Brothers' operation in Europe and Asia and his sidekick Roger Nagioff, former Global Head of Fixed Income, two men who played a leading role in building the financial doomsday machine that was Lehman's, were both close friends. Having been in the cockpit for the 9/11 moment of the credit crunch, the duo who put the bulge in the term bulge-bracket bankers quietly scuttled off (fortunes intact) to their north London mansions and kept their heads down as the twin towers of global finance came crashing down.

There was also less than seven degrees of separation between Beano and another seminal moment in the great banking crisis: the run on Northern Rock. Beano bought up millions of pounds' worth of shares in the ailing bank betting the government would organise a rescue. All was lost.

Other Beano intimates included the tycoons the Tchenguiz brothers and Paul Kemsley, the flashy property speculator behind Rock properties.

Kemsley, who the business press slobbered over so, was a close friend of retail's Mr 'pile it high, sell it cheap,' Sport Direct's Mike Ashley, and Sir Alan Sugar, even achieving celebrity as one of his inquisitors on The Apprentice. Like Beano, Kemsely lost millions betting that the Lehman balance sheet was not in fact a steaming turd of epic proportions and was himself recently declared bankrupt having been generously bankrolled the by the now notorious arch dealmaker Peter Cummings of HBOS, recently given a lifetime ban by the Financial Service Authority for his role in the banking crisis. Kemsley's several hundred million in bad debts is now the problem of the hard-pressed British taxpayer.

Indeed, Beano could have re-written the book 'How to Make Friends and Influence People.' He was like a financial big game hunter, with an in-built telescopic lens for the fattest cat in the jungle.

Thus he managed to wangle an invite to the 40<sup>th birthday party of Goldman Sach's European Viceroy Mike Sherwood in the south of France, and was a business associate of the much-hyped 'superwoman' Nicola Horlick. I once saw him in action, schmoozing one of the Reuben brothers - worth £3billion and among the richest men in Britain - it was a master-class (Note to Beano: Networking Trainer, possible career option on your release).

Beano understood the weaknesses of men (and women). He could get you tickets for the Royal Enclosure at Ascot or procure a high-class hooker.

He was a regular on the businessmens' black-tie charity circuit, bidding big in the charity auctions for luxury weekends in Venice or days spent pheasant shooting (a pastime he took up, hooking him into the Old Money). It enabled him to be philanthropic, which he was, impress the movers' n shakers on the committee, intimidate the other financial alpha males watching on with the size of his financial conjas, and use the prize as gift to ingratiate himself with a useful contact that could provide even bigger returns. Canny.

Plus de Rein

Seventy million pounds - how do you spend that much money?

When Beano's Ponzi scheme finally fell apart after he failed to repay Stagecoach founder Brian Souter and Ann Gloag their £10m, he briefly disappeared (the 'Fugitive Financier' hyperventilated the headline writers) only to resurface at the Priory Clinic where he was being treated for gambling addiction, he claimed.

Many rolled their eyes sensing a ruse to reduce the criminal sentence to come.

Beano's might indeed have been disingenuous, but there is also ample evidence to show he was a colossal gambler - 'a whale' as they say in the casinos.

Over several years he lost £36 million to just one spread betting house and he had multiple accounts at all of them. In one two-year period he lost £7 million on football bets. According to the prosecution his total betting and spread betting losses between 2005-2009 were £58 million. On one cricket match he lost £10,000 for each of the 72 runs beyond the range of his bet . I was with him when he reputedly lost £250,000 on the 2008 Chelsea v Manchester United European Cup Final in Moscow - he barely flinched.

He was shown the red carpet at casinos from the West End to the Las Vegas strip. I once watched him playing blackjack and he was betting half the UK average annual wage on the turn of a card while simultaneously talking on his mobile phone. When I suggested that he should concentrate on the game as thousands were at stake, he pointed to his phone and said "don't worry I'm talking hundreds of thousands."

Such was the all-consuming affliction that he even bankrolled another gambler with $100,000 to play at the World Poker Tournament.

The platinum lifestyle took the rest. The £3.4m palatial villa in Israel, the £800,000 on two bar mitzvahs, the school fees, the Chagall sketch, the Filipino help, the presidential suite, private jet hire, the £10,000 for the Tory party and a very generous helping of charitable donations. Over £18 million went on the "lavish lifestyle from the proceeds of fraud," said the prosecution.

Crime and Punishment

What makes a man take the wrong path? Disconnects the wires in his brain that prevent him doing wrong and compels him to actions that drive his wife half mad and hurts the people he most loves, his children?

When I first met Beano he had buck teeth and flat feet but a quick wit and was a loveable rogue. But behind the cheeky chappy playground joker he was hiding a secret.

His mother had a mental breakdown which had made him nervous and insecure. He told lies to survive and he became a lifelong Walter Mitty.

The next psychological strain on his young mind was the failure of his father's electrical business. In Jewish north-west London where entrepreneurial acumen is a measure of a man this was a hard blow, for which, according to Beano's wife, he has been trying to compensate ever since.

Shortly, afterwards, when Beano was 14 - just as the teenage kicks were kicking-in - the family emigrated to Israel: More dislocation, more insecurity, more loneliness. "It was a massive change, an upheaval and psychologically very difficult. It was a wrench and I felt very homesick," he recalled. To compensate he embraced the sub-culture of the street Israeli, aggressive and smart.

When he returned to London in the mid-eighties these traits made him an ideal recruit to the finance capitalism revolution. Armed with a fabricated CV, he was one of the Thatcherite shock troops whose war cry was "Loadsa Money."

By all accounts he was an extremely talented trader.

"In October 1986 I was a junior market-maker for S.G. Warburg on the Stock Exchange Floor in London. On my first morning I met Beano - he was genuinely a larger-than-life character. But Beano's reputation on the Floor was based on more than just swagger and style - he was indisputably the best broker in the City of London," said a former colleague.

Beano told me: "We were the bad boys, upstairs the analytical people, they were in fear of us, and we were very intimidating. There was no time for pleasantries and you had to be aggressive, shouting orders to be heard. It was like a poker game and you had to use subterfuge and guile - be manipulative, slippery - and I was good at it."

The brave new world of finance only agitated his urge to gamble. His senior managers also encouraged him to make personal trades - using the firm's accounts.

In October 1987 Beano took too much risk on a position betting on the direction of the FTSE when 'Black Monday' left him with a £25,000 debt he was unable to pay off. He was under immense financial stress. Eventually he resolved the situation by taking a second mortgage and doing a deal with City Index to settle the debt.

In 1988, Beano was offered a better paid and more senior position at Nomura, the Japanese mega-bank, which would have put his career on a potentially stellar trajectory. But his innate and uncontrollable dishonesty was revealed when he cashed in a share certificate worth only a few hundred pounds sent to him in error. When the cheat was uncovered the job offer was withdrawn and his reputation sullied.

But he was able to steady his career by advancing rapidly through smaller, second division trading houses. The money was rolling in, his earnings were nearing £1 million a year and he was the managing director of Trio Equity Derivatives.

His former boss said that under Beano "TED year on year consistently produced the best margins and relative profitability of all the many global subsidaries. The team he put together gained an enivable reputation for abject professionalism and expertise. He was known for his extensive and extraordinary access to personal and business relationships among the senior personnel of the key banks and investment houses.

"He was an extremely talented, charismatic and dynamic man."

However this success was not enough for Beano; the gambling demon was out of control.

"Over the years it became obvious that Beano was an addictive gambler: the stakes continued to increase, it was never too much to win or lose, the only question being "how much can I get on?" Fearless, but reckless too since he started betting huge amounts on sports and events which he hadn't researched properly. If he was in attendance or simply watching an event at home on television he felt obliged to put a six-figure sum on the outcome, regardless of the odds," recalled a colleague.

In 2001, his Trio employers discovered the spread betting firm Cantor Index had presented a Bankruptcy Petition against Levene. He tendered his reputation and the employment of the group.

Beano was down but not out. He was a player and he was hunting for new opportunities just as the money carousel of Big Finance was spinning faster than a roulette wheel. Hedge funds, private equity, proprietary trading, quants, mega takeovers, even the lowest hanging fruit in The City and Wall Street could bank a six figure bonus in the great money orgy.

Beano, sharp and ballsy, prospered like never before. According to the court he estimated worth in 2005 was £20 million.

When another great fraudster, Lord Conrad Black, former owner of the Telegraph newspapers, was imprisoned for fraud, an associate said his downfall was down to the fact he was a hundred-millionaire who wanted to be a billionaire. Likewise, to Beano being a millionaire was small potatoes in the go-go naughties. He had friends who were getting $25m bonuses from Lehman Bros and were in the Sunday Times rich list.

The greed and the gambling toxified into outright fraud and the die was cast - his last and most epic disgrace was on the cards.

Perversely the more he was corrupted the more religiously observant he became - make of that what you will. His generous donations to Jewish causes meant several rabbis became his intimates.

One wrote to the judge in a plea for mercy. He concluded by quoting King Solomon: "For there is none so righteous upon earth who only does good and never sins." (Ecclesiastes 7:20).

Unfortunately, Beano's sins have been proven to be too big and he had to fall.

Julian Kossoff is the Managing Editor of IBTimes UK