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Note:John Richard Walsh, convicted of conspiracy to defraud and three counts perverting the course of public justice for his role in a US$ 61 million "prime bank" investment scam, sought leave to appeal against conviction and against sentence of ten years' imprisonment.

Walsh was the Australian representative for Linpar, a company incorporated in the South Pacific island country of Vanuatu whose principals promoted and executed the purchase of "prime bank" instruments. From October 1991 to July 1992, Linpar defrauded the Nauru Phosphate Royalites Trust (Trust) by inducing the Trust to "invest" US$ 61 million in the scheme. Of that amount, US$50 million was recovered.

At trial, the Crown (Australian Government) alleged that Walsh proposed to the Trust's administrative manager in a meeting on 22 October 1991 that the Trust purchase what Walsh called "Prime Bank Instruments" from "Prime Banks" and trade the instruments every ten days at a substantial profit. After the meeting, a letter dated the same day was allegedly sent by a principal of Linpar to the Trust's administrative manager describing the proposed investment scheme in terms of standby letters of credit (in the letter, "SBLC"). In part, the letter read:

"For an investment of USD $ 4.4M, we will purchase for you a Standby Letter of Credit, from a Prime World Bank, with a face value of USD $ 5 million .... [T]he prefered [sic] option would be to trade the Standby Letter of Credit. At present day prices, the same can be traded approximately every ten (10) days and will yield (on a USD $ 5M. face value SBLC) a profit of US $ 100,000. The cost of the USD $ 5M. face value SBLC will be USD $ 4.4M., whereas the cost of the USD $ 10M. face value SBLC will be USD $ 8.7M. These SBLCs readily trade and the turn-around time, trade to trade, should be approximately ten (10) banking days per transaction or thirty (30) times per year."

A second letter also dated 22 October 1991 signed by the same Linpar principal was sent to the Trust, extolling the benefits of a so-called Master Collateral Commitment which was said to "open vast opportunities to generate profit, far in excess than would be achieved through the SBLC rollover programme." The Master Collateral Commitment was described thus:

"A Master Collateral Commitment is issued by a Top Fifty (50) Prime World Bank and permits the holder to have the Prime Bank (or lesser Bank) Credit Instruments issued from that broad range of banks that at all times are issuing such Instruments."

As described by the court, it was the [Australian Government's] contention that "the conspiracy, which [Walsh] joined, was to induce the trustees of the Trust, by dishonest means, to invest moneys in the scheme to trade in 'Prime Bank Instruments' and thereby to create for the conspirators the opportunity to pocket part of the moneys."

On 23 December 1991 the Trust, acting on the representations made to it by Walsh, remitted funds of US$ 8.7 million for the purchase a standby letter of credit, but no standby or other bank instrument was purchased. By July 1992, the Trust had advanced some US$ 61 million for the purchase of "Prime Bank Instruments".

On 31 March 2000, a Trial Division jury sentenced Walsh to seven years' imprisonment on the count of conspiracy and three years' imprisonment of attempting to pervert the course of justice. On appeal, the Supreme Court of Victoria Court of Appeal, Ormiston, Phillips, and Buchanan, JJA, judgment by Ormiston, JA, dismissed appeal.

Walsh's notice of application, amended twice, put forth ten grounds of appeal. The appellate court ruled: "we think that there is nothing in any of the grounds raised in the notice of application for leave to appeal against conviction, despite the substantial amendment that that notice has undergone. We would dismiss that application."

In considering Walsh's application for leave to appeal against sentence, the appellate court concluded: "There was no doubt much to be put on behalf of [Walsh], but the offences of which he was found guilty were very serious ones. This was no fly-by-night scheme whereby the victim was duped for a few days; this was a major enterprise which, even if not initiated by [Walsh], was joined by [Walsh] and then advanced by [Walsh] in a very significant manner. The question of manifest excess depends upon whether the sentences imposed were altogether outside the range of sentences reasonably open in the proper exercising of the sentencing discretion, and having considered the arguments of counsel we cannot say that they were. ... These sentences were not manifestly excessive."

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