If you're going to tell a lie, make sure it's a big one. According to the BBC's Panorama, the scams allegedly perpetrated by "Trillion Dollar Con Man" Russell King, now 52, took in former England football manager Sven-Goran Eriksson, the former spymaster Sir John Walker, the board of a City bank and even the Communist dictatorship of North Korea. They all fell for the oldest trick in the game, says investigative reporter Peter Walker: "The promise of riches when, in reality, there were none."
The Serious Fraud Office (SFO) is now investigating whether King a once small-time crook who was jailed for two years in 1991 for faking the theft of a £600,000 Aston Martin for the insurance money masterminded the giant con trick that precipitated the collapse of the investment bank First London plc and nearly wiped out the Football League's oldest club, Notts County. It's likely to be a tricky process, says The Guardian, not least because King openly boasts that he never puts his name on bank accounts, shareholdings, or directorships. At Notts County (where he claims to have been a mere "consultant" in the 2009 deal that saw the club taken over by a shadowy Swiss-based investment vehicle named Qadbak) he took the moniker Lord Voldemort, after the character in the Harry Potter books also known as "He-Who-Must-Not-Be-Named".
The trail the SFO follows is likely to begin in Bahrain, the Gulf kingdom where King is currently holed up. Panorama alleges he claimed to be managing billions on behalf of the Bahraini royal family. They deny any financial connection with him. But the lure of the Bahraini billions was enough to sucker the board of First London plc which then included such worthies as former defence intelligence chief Sir John Walker and ex-Tory minister Tim Yeo into a disastrous deal. In 2008, they handed over 49% of the bank's shares for no cash. That became the springboard for every subsequent deal. A year later, when King produced a bank guarantee for £5m in the name of First London during negotiations to acquire Notts County, neither the club, nor the Football League, blinked.
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There followed a near farcical series of events, says the Daily Mail. Fans watched the world-famous Sven-Goran Eriksson turn up to manage the bottom division club; swiftly followed by England star Sol Campbell. Everyone thought the club was being funded by a Middle-Eastern prince. The draw for Eriksson wasn't justthe gold-plated salary, but "promises of shares worth £10m" in another shadowy venture: Swiss Commodity Holdings. It claimed to have assets of $2trn based on exclusive mining rights in North Korea. But even as Eriksson met the regime's top brass in Pyongyang, he knew there was trouble back home. "We couldn't pay the milk bill." The Bahraini billions hadn't turned up. Within weeks, "Lord Voldemort" had disappeared too.
How was the scam missed?
How did a convicted fraudster, with no money, get his hands on a City bank and succeed in gulling the world's most secretive regime? When asked about his involvement in a string of offshore companies (including Qadbak, Swiss Commodity Holdings and Jersey-based fund manager Belgravia, which collapsed in 2008), King (who denies fraud) claims his role never went beyond that of an "adviser". Indeed, his name doesn't appear in the documentation of any of these firms, says Panorama. But the programme has obtained "dozens of emails and testimonies showing he was secretly pulling the strings". According to Jersey lawyer Philip Sinel, "there are strong indications that he's a serial fraudster".
Part of King's schtick was his ability to exude wealth and confidence and a talent for building on half-truths, says The Guardian. He may not have held the purse-strings to the Bahraini billions, as he allegedly convinced both FirstLondon and the North Koreans, but he wangled introductions to members of the royal family. Similarly, although Swiss Commodity Holdings' (SCH) claim to hold nearly $2trn in North Korean commodities was false, King somehow won the trust of the regime in Pyongyang. That convinced First London plc to lend SCH £170m, ahead of a possible flotation. In 2010 the bank collapsed with debts of £8.7m. Its parent, First London Group, is still in business, having suffered "significant financial damage".
Whatever the outcome, the affair has exposed holes in the oversight of both the Football League and City authorities. The FSA regulator says it wasn't told of the change of ownership at First London until it was too late. But it's still hard to see how First London's board, which sent Sir John Walker to check out King, was so easily gulled. "He was good at chat, but that was his business," says Walker. "He was a con man. I was taken the same way Sven was taken. They just wanted names."
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