Cayman Islands prosecutors will appeal a 3.5 year prison sentence given earlier this month to a local accountant who admitted to stealing nearly US$500,000 from two investment funds he managed during a liquidation process.
Robert Aspinall, 38, began serving time in Northward Prison last month – before he was formally sentenced – after agreeing to plead guilty to charges of theft, converting criminal property and obtaining money orders by deception in connection with the scheme to steal from two U.S.-based investment funds that were caught up in insider trading allegations.
The sentence represented the minimum time Aspinall could have received under court guidelines for a “class 1” theft case.
During the Aug. 1 sentencing, Grand Court Justice Timothy Owen noted that his initial sentence consideration for the crime was five-and-a-half years, but that Aspinall’s cooperation with the authorities and his admission to his crimes at the earliest opportunity may have been a “unique” occurrence in the Cayman Islands.
“It would be difficult to think of a case where fuller remorse and cooperation had occurred,” the judge said during a July 29 sentencing hearing.
Crown counsel Toyin Salako confirmed Monday that prosecutors were appealing the sentence on the grounds that it was “unduly lenient” given all the circumstances of Aspinall’s theft.
Typically, undue lenience is one of two grounds upon which prosecutors can appeal a defendant’s sentence. The other is where there is an allegation that the presiding judge has erred in law.
Defense attorney James Austin-Smith was contacted Monday for comment on behalf of his client, Aspinall, but he declined to do so.
Justice Owen chided the Crown during sentencing over what he said appeared to be an attempt to overload the indictment against the former Deloitte accountant. The judge said that in his view, two charges of theft against Aspinall “would have sufficed.”
“The simple reality is that [Aspinall] stole a total of US$495,000 from two connected funds registered in the Cayman Islands over 10 months,” Mr. Owen said. “[Aspinall] forged documents, and having stolen the money [he] set about spending the ill-gotten cash.”
In the context of two charges to which Aspinall pleaded guilty, converting criminal property, the criminal act alleged is that the accountant spent the stolen money from the funds on a new house and a BMW. Converting criminal property is a money-laundering offense.
During the sentencing hearing on July 28, Mr. Austin-Smith argued that these two money-laundering charges amounted to “what we used to call ‘spending the money.’”
Justice Owen said the charging of a defendant was “not just a matter of legal definition,” but must be linked to the conduct of the defendant. “All thieves tend to spend the proceeds of theft if they can, before they are arrested,” the judge said. “I see no necessary public purpose in proceeding with the counts of money laundering … where [Aspinall’s] conduct is covered by that.”
The funds’ theft
Aspinall, who worked for Deloitte at the time, was appointed in 2012 as one of two joint voluntary liquidators to oversee the dissolution of two connected investment funds registered in the Cayman Islands. Insider trading allegations were made against the funds’ U.S.-based investment manager, and the U.S. Securities and Exchange Commission initially won a US$21.5 million judgment against the funds’ manager.
The case was overturned a few years later, and the US$21.5 million settlement was reversed. A U.S. district court judge ordered the Securities and Exchange Commission to return the money to creditors and investors in the funds, including the two Cayman registered funds, Level Global Overseas Master Fund Ltd. and Level Radar Master Fund Ltd.
The Deloitte accounting firm, initially appointed to manage the funds’ liquidation, undertook the task in January 2016 to assist former investors in finding and collecting their money. It was during this review that the accounting firm uncovered “a number of discrepancies” – including some cash Aspinall, as the joint voluntary liquidator – had transferred to a Cayman bank account held for a company in the British Virgin Islands he controlled.
The Deloitte review, Crown Counsel Salako said, “ultimately led to the discovery of Aspinall’s criminality,” being the theft of US$445,000 from the Level Global Overseas Master Fund Ltd. funds Aspinall was managing.
In addition to the theft from the Level fund, another US$50,314.20 from a separate investment fund – called Aslan Capital Master Fund – was admitted by Aspinall. Judge Owen acknowledged that neither Deloitte nor Crown prosecutors were aware of this theft before Aspinall informed them about it.