FREDERIKSEN v. DENMARK
Inadmissible
Christos Rozakis
The applicant, Mr Frank Clarence Provstgaard Frederiksen, is a Danish national, who was born in 1953 and lives in Haslev. He is represented before the Court by Mr Henrik Karl Nielsen, a lawyer practising in Copenhagen. The respondent Government are represented by their Agent, Ms Nina Holst-Chritensen of the Ministry of Justice. The facts of the case, as submitted by the parties, may be summarised as follows. In the beginning of the 1990s a new concept called “tax asset stripping cases” (selskabstømmersager) came into existence in Denmark. It covered a criminal activity by which the persons involved committed aggravating debtor fraud by buying up and selling numerous inactive solvent private limited companies within a short period, and for the sake of their own profit, “stripping” the companies for assets, including deposits earmarked for payment of corporation tax. Often the persons involved systematically acquired the inactive, solvent companies for the companies’ own fund. The persons involved were usually intricately interconnected and collaborated about their economic criminal activities, which concerned very large amounts. According to surveys made by the customs and tax authorities, approximately 1,600 companies with a total tax debt exceeding 2 billion Danish kroner (DKK) were stripped in the period from the late 1980’s until 1994. Following a number of legislative amendments, the trade in inactive, solvent companies largely ceased completely in the summer of 1993. On 4 June 1993 the tax authorities reported to the police that allegedly the applicant, who worked as an accountant, and a number of other named persons had committed tax asset stripping. Unknown to the applicant, on 22 April and 25 May 1994 a City Court granted warrants to the police to search inter alia his premises. On the latter date the applicant was charged with tax asset stripping and the police carried out a search at his premises, and at forty-five other localities, which led the attention to almost five-hundred inactive solvent private limited companies. It appeared that the largest group of companies were part of a corporate group owned by companies registered in the Isle of Man. Consequently, on 1 July 1994 the authorities of the island were contacted in order to obtain information on the ownership of the group. The request was an informal letter as the Isle of Man has not signed the European Convention on Mutual Assistance in Criminal Matters of 20 April 1959. In August 1994 the authorities of the Isle of Man provided the material which showed that a large part of the funds of some of the groups was transferred to Swiss banks. In the spring of 1996 the applicant and two other persons lodged objections with Her Majesty’s Attorney General of the Isle of Man, claiming that the letter of request had been executed without authority. The case was brought before the City Court of Douglas on the Isle of Man, but was dismissed by a decision of 23 August 1999. In the meantime, on 15 November 1994 the police requested a court order for an international letter of request to Switzerland. By a City Court order of 6 December 1994, upheld on appeal by the High Court of Eastern Denmark (Østre Landsret) on 23 December 1994, the Swiss authorities were requested to grant assistance to procure evidence for the police investigation. In March 1995 the Swiss authorities requested more detailed information. This was submitted by the Ministry of Justice in Denmark in May 1995. By letter of 9 April 1996 the City Court in Korsør (Retten i Korsør) was notified of a decision from the Swiss authorities according to which the letter of request could be substantially accommodated. Due to objections, the international letter of request was tried by three judicial instances in Switzerland. Subsequently, on request of the Swiss examining magistrate a supplement to the international letter of request was submitted in relation to some of the bank accounts concerned. Beforehand, since on 20 September 1996 counsel for the applicant had objected to the supplement, it was approved by the City Court in Korsør on 11 October 1996 and on appeal by the High Court on 29 November 1996. During the summer and autumn 1997 numerous persons were interviewed in Switzerland by the Swiss authorities. The Danish police, the prosecutor and counsel for some of the persons charged in the case were present during some of the interviews. In March 1998 the Swiss authorities sent the investigation material obtained in the case to the Ministry of Justice in Denmark, which forwarded it to the police in April 1998. In the meantime, investigations had been pursued in France, Gibraltar and the United Kingdom. Several hundred court orders were issued, including approximately forty discovery orders against Danish banks. A large number of the said court orders were tried by appeal instances. Furthermore, material was procured from company sellers, the National Customs and Tax Administration (Told- og Skattestyrelsen) and the National Commerce and Companies Agency (Erhvervs- of Selskabsstyrelsen). During the investigation, the police was assisted inter alia by a firm of accountants in order to untangle intricate corporate structures and ownership structures of companies and to enlighten tax technicalities as regards numerous financial and liquid transactions. On 30 November 1998 the Public Prosecution issued an indictment against the applicant and seven co-accused, one of whom died before the trial commenced. The indictment contained six counts of tax assets stripping as to 225 private limited companies, of which the applicant was indicted of five counts involving 157 private limited companies. The indictment was submitted to the City Court of Copenhagen (Københavns Byret) to which, by a final Supreme Court order of 28 April 1998, the case had been transferred from the City Court in Korsør on the latter’s request of March 1997 after having been addressed by the police as to scheduling of court hearings in the case. In the beginning of 1999 several procedural matters were determined by the City Court of Copenhagen e.g. that the prosecution was allowed to use the material received from the Swiss authorities as evidence in the case, and that an accountant who had assisted the prosecutor was not disqualified from the case. The former issue was appealed against to the High Court, which upheld the decision on 29 June 1999, and leave to appeal to the Supreme Court was refused on 4 August 1999. On 2 March 1999 a hearing was held in order to plan the course of the proceedings. It appears from the court records that the City Court expected to have premises available in October/November 1999 as it was necessary to lease premises to accommodate the court sitting with lay judges and deputies, seven co-accused, counsel with deputies, and an archive room with space for about 15 sets of exhibits expected to take up 250 A4 binders per set. Counsel requested that the trial be scheduled with two weekly court days in consideration of those accused, who were living abroad. On 20 April 1999 the City Court scheduled the case for trial every Tuesday and Wednesday starting on 16 November 1999 and ending in June 2001. Accordingly, in the period between 16 November 1999, when the trial commenced, and 13 June 2001, when the case was set down for judgment, about 105 court hearings were held. The applicant, the six coaccused, and a very large number of witnesses gave evidence. In addition, statements of accounts and a considerable amount of other documentary evidence were presented including outlines of corporate structures and money transactions. Each set of exhibits for the case took up 270 A4 binders and the court records ran to approximately 1170 pages. By judgment of 31 August 2001, which ran to 432 pages, the City Court convicted the applicant of tax assets stripping as to an amount evaded for tax purposes calculated at DKK 252,851,859 (equal to approximately € 33,713,581) and attempted tax assets stripping as to DKK 2,714,169 (equal to approximately € 361,889). He was sentenced to six years’ imprisonment and an amount of DKK 1,835,000 was seized. In addition for an indefinite period, he was deprived of his right to establish or to become manager and/or member of a director’s board in a private limited company, or in a company or an association which would require public approval, and of his right to practise as an accountant. The six co-accused were convicted by the same judgment. The City Court rejected the applicant’s complaint that the length of the proceedings had exceeded a reasonable time, finding among other things: “In count I, count II A and count IV a large number of companies have been traded. The structure included foreign companies with impenetrable ownership structures, and money transactions have mainly taken place in Switzerland. These circumstances are a good reason for a lengthy investigation. Thus, the right to a trial within a reasonable time ... has not been violated.” By notice of appeal of 7 September 2001 the applicant appealed against the judgment to the High Court of Eastern Denmark. The co-accused also appealed against the judgment, and by notice of appeal of 1 October 2001 the prosecution cross-appealed. During pre-trial reviews held on 2 and 26 November 2001 the High Court stated that the trial could start in May 2002, however since several counsel were prevented by other trials until the autumn 2002, the trial was set to commence on 18 September 2002. From that date and until December 2003, approximately 75 court hearings were held. During a hearing on 19 June 2003 the applicant stated that he did not have the mental energy required to be present. Also, he wished that one of his two counsel be released. The High Court stated that the medical certificate that had been submitted by the applicant was inadequate, and it thus requested that the applicant submitted a more detailed one. The following day the High Court assigned another attorney as co-counsel for the applicant. Hearings scheduled for 27 and 28 August, and 3, 4, 10 and 11 September 2003 were cancelled due to pleaded illness on the applicant’s behalf, and his counsel requested an adjournment of the case for at least four months. The issue of the applicant’s illness was discussed, and a medical certificate was submitted to the Medico-legal Council (Retslægerådet) for an assessment. On the basis of the latter’s opinion, on 17 September 2003, the High Court found that the applicant had no lawful cause for being absent from the trial. Since then the applicant appeared before the High Court. Court hearings scheduled for 12, 13, 19, 20, 26 and 27 November, and 3 and 4 December 2003 had to be cancelled in that in the period from 6 November 2003 until 2 December 2003 a claim by one of the coaccused, joined by the applicant, had to be determined, namely as to whether the presiding judge in the High Court should vacate his seat on the bench due to disqualification. The question was answered in the negative by the High Court on 10 November 2003, and leave to appeal against this decision to the Supreme Court was refused by the Leave to Appeal Board (Procesbevillingsnævnet) on 2 December 2003. During the following court hearing on 10 December 2003 counsel for the same co-accused claimed an adjournment of the trial due to his client’s illness. Thus, hearings scheduled for 10, 11, 17 and 18 December 2003 had to be cancelled. The court hearings ended in January 2004. Before the High Court the applicant, the six co-accused, and sixty-six witnesses were heard. Also, statements during the City Court trial from twenty-nine witnesses were read out. In addition, statements of accounts and a considerable amount of other documentary evidence were presented, including outlines of corporate structures and money transactions. Each set of exhibits for the case took up 127 A4 binders and the court records ran to approximately 550 pages. By judgment of 5 April 2004, which ran to 101 pages, the High Court upheld the City Court’s judgment. Also, the High Court rejected the applicant’s complaint that the length of the proceeding had exceeded a reasonable time. It stated inter alia: “Counsel have claimed, as [they did] before the City Court, that Article 6 § 1 of the European Convention on Human Rights has been violated due to the extension of the trial’s duration. The prosecution has contested that there has been a violation of Article 6 § 1. As a starting point, a length of proceedings in a criminal trial, which last almost ten years - from charges and searches in 1994 – presumably entails a breach of the requirement of a trial within a reasonable time as set out in Article 6 § 1 of the Convention. Thus, it is incumbent on the authorities to prove that the duration was reasonable, and that the case proceeded with duly expedition without the existence of any “dead periods”. In this assessment, the nature of the case and its importance, its complexity, and the conduct of the accused and that of the authorities must be taken into account. A chronological account of the proceedings has been submitted before the High Court. ... The case has necessitated investigation of entangled constructions of companies and group of companies with associations abroad. Furthermore, it has required an extremely comprehensive accountant work to go through the complex financial circumstances of the case and untangle the money transactions for each company. Thus and necessarily, it had to take some time to work up the investigation material and consider the matter of indictment in the case. The Danish authorities have had no influence on the proceedings in Switzerland as to the international letter of request, or on the process on the Isle of Man. The High Court finds that the general investigation; the consideration of the case; the work on accounting matters; and the determination of procedural questions; all have moved forward in parallel, thus avoiding any dead periods during the investigation, during the periods of scheduling of the trial or during the proceedings before the City Court and the High Court. Accordingly, making an overall assessment, the High Court finds that the length of the proceedings does not entail a breach of the accused’s rights under Article 6 § 1 of the Convention.” On 19 April 2004 the applicant requested that the Leave to Appeal Board grant him leave to appeal against the High Court judgment to the Supreme Court (Højesteret). The case is at present pending before the Leave to Appeal Board.