Adrian Scott-Jones, 63, a former guaranteed investment contract banker, received an 18-month prison term on each of three counts of wire fraud and conspiracy, to run concurrently, and a $12,500 fine for a scheme to keep interest rates artificially low.
Scott-Jones, a former consultant to Tradition Inc., a wholly owned interdealer brokerage arm of Compagnie Financière Tradition in Switzerland, and at Euro Brokers, will also receive three years of supervised release after his term, concurrently on each count.
The U.S. Department of Justice said the collaboration defrauded municipal bond issuers of millions of dollars. The scheme, which occurred from 1999 to 2006, included providing “last looks” about competitors’ bids, intentionally submitting losing bids, and arranging for kickbacks through back-end swap agreements.
Judge Harold Baer of the U.S. District Court for the Southern District of New York delayed the imposition of restitution. “I’m not touching the restitution aspect. I can’t do it now. I have to understand more about it myself,” Baer said in Room 23B of the Daniel Patrick Moynihan Courthouse.
The government is requesting $2.3 million in restitution for the 13 deals in which Scott-Jones participated.
Scott-Jones, a British citizen who entered into a plea agreement in September 2010, took the stand as a government witness in the case against Dominick Carollo, Steven Goldberg and Peter Grimm — former executives of General Electric Co. affiliates — last spring. He said on April 26 that he discussed swaps with Goldberg during a dinner at which “the sake was exceptionally good.”
But Goldberg’s lead defense attorney, John Siffert of Lankler Siffert & Wohl LLP, played tapes in which a co-worker said Scott-Jones was not at the dinner but instead out drinking. Siffert grilled Scott-Jones over the discrepancy, shouting frequently and even asking at one point: “You can savor the sake in your mouth as you sit here today, right”?
The next day, Scott-Jones left the courtroom after a lunch break and didn’t return for further defense cross-examination. He has since been living in the Atlanta area.
On Thursday, Scott-Jones’ Atlanta-based attorney, Adria Perez of Kilpatrick Townsend & Stockton LLP, said without elaborating that Scott-Jones “hurt himself” after leaving the courtroom in April. “He will tell you that he was confused and under intense duration and stress,” said Perez. “He was alone up on the stand, and his feeling was, ‘Where can I find the nearest hardware store to buy a knife?’ ”
Perez also said her client, with a history of depression and anxiety, “had an incident with a bottle of Scotch and some Tylenol and a second incident with a chainsaw.” She also criticized the government for not objecting enough during Siffert’s interrogation and for ignoring warnings by some Justice lawyers that he might be shaky as a witness.
“They let him walk out this door and hurt himself,” she said. Approached after the sentencing, Perez did not comment.
Scott-Jones himself spoke briefly before Baer. Featuring a beard he had grown since April, he spoke with hands behind his back and in a measured British dialect.
“I want to personally apologize for any disruption that took place in April,” he said. “I was fully prepared, as I have been the past four years, to extract some goodness out of a terrible criminal act that I did commit. But Mr. Siffert’s brutal attack upon me left me exceptionally low and very dark, and I felt very alone.”
Scott-Jones also asked for leniency because his adoptive son, 27, has epilepsy. “He is the mental age of 10,” he told Baer.
Baer’s sentence was considerably lighter than what the government had sought: 63 to 78 months in prison and a fine ranging from $12,500 to $125,000. Perez argued that a harsher sentence for Scott-Jones than those for Carollo, Grimm and Goldberg, would have been unfair.
The three were convicted at trial in May and sentenced in October. Goldberg received four years and a $90,000 fine, while Carollo and Grimm each received three years and $50,000. All are appealing.
Scott-Jones’ perjury resulted in Baer dismissing one count from each of the other three defendants.
Perez also noted that while Scott-Jones participated in 13 illegal deals, the other three participated in 31. Baer responded: “I’m not sure that really matters to me because he was a participant in the whole ball of wax. That might affect restitution, but we’re not there yet.”
Baer received the Scott-Jones case from Judge Victor Marrero on May 22, 11 days after the Carollo, Grimm and Goldberg convictions. According to prosecutor Antonia Hill, some issuers from Massachusetts and Missouri are seeking restitution. Other requests may follow. In U.S. v. Carollo et al, federal attorneys have requested the three pay a combined $6.9 million in restitution.
Baer admitted worrying in April that Scott-Jones’ perjury might have compromised the case. “That in my view caused a problem not only in the fact itself, but my concern at the time was the effect on the jury with respect to the whole case,” he said. “Whether Mr. Siffert was overbearing or whether the government objected enough was not the point.”
Scott-Jones has 30 days to report to prison. Perez requested assignment to a Florida facility to enable his family to drive to visit him. His immigration status after the conviction is unclear — Scott-Jones has a green card to work in the United States, according to court documents. Baer advised Scott-Jones to obey immigration laws.
The government has charged 20 individuals in its sweep of municipal bond industry corruption, with 19 convicted or having pleaded guilty. Former Bank of America executive Phillip Dennis Murphy is still awaiting trial.