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Edward Davenport (born 1966)

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Edward Davenport
Edward Davenport at 33 Portland Place, London W1
BornEdward Ormus Sharington Davenport
(1966-07-11) 11 July 1966 (age 58)
London, England, United Kingdom
NationalityBritish
OccupationBusinessman
Years active1982–present
Known forSerious fraud; founder of the Gatecrasher Balls; property developer
Websitewww.davenporttrust.com

Edward Ormus Sharington Davenport, also known as Fast Eddie and (self-styled) "Lord" Edward Davenport, (born 11 July 1966) is a convicted fraudster and property developer. He came to prominence as the organiser of the Gatecrasher Balls for wealthy teenagers and was convicted of tax offences in 1990 for understating his tax returns. After his conviction he started on a second career as a property developer, acquiring a substantial fortune but also attracting controversy for his business practices such as the way he acquired the former High Commission building of Sierra Leone in London, during the country's civil war. After setting up a front company in 2005 he used an alias to carry out advance-fee fraud schemes, defrauding dozens of individuals out of millions of pounds. He was convicted in September 2011 along with several other defendants, receiving a jail sentence of seven years and eight months.

Early life

The son of a wealthy restaurateur from Fulham, Davenport was educated at Frensham Heights School, Surrey, and Mander Portman Woodward, a South Kensington crammer. At the age of 15 he began selling clothes on Portobello Road before making a career organising parties, first at his home and later in nightclubs.

Gatecrashers Balls

In 1987 aged 19, Davenport co-founded Gatecrashers, a company that organized parties for teenagers at country houses such as Longleat and Weston Park. The balls were attended by up to 10,000 party-goers at any one time and at the height of their success were generating £1,000,000 a year. The idea behind the balls was to enable wealthy teenagers at single-sex boarding schools to meet the opposite sex while consuming copious amounts of alcohol. As one reveller put it, "I'm here to get drunk and get laid". The balls gained a reputation for debauchery or, as a newspaper headline put it, "Unbridled lust among upper-class Lolitas and public school Lotharios."

The balls ceased to be held after an HM Customs & Excise audit found that Davenport had substantially underpaid his Value Added Tax bill. Davenport was found to have understated his tax returns by £24,672 by falsely claiming that only £3.50 of the £14 entry fees for the Gatecrasher Balls was liable for VAT; the remaining £10.50 was supposedly for raffle tickets, a magazine subscription and postage. The prosecution described this as a "cheat" and Davenport admitted breaching VAT rules. Convicted for tax evasion, he was sentenced in November 1990 to nine months in jail. Asked by Tatler magazine how he coped with two weeks in prison, Davenport said in 2006: "Boring. There aren't many parties there." The sentence was reduced on appeal to a nine-month suspended term for tax fraud. He later attributed his legal problems to his being "incredibly naive about things like VAT." In the aftermath of his conviction, Gatecrashers went bust.

Business

Following the success of the Gatecrashers Balls, Davenport turned his attention to the club industry in 1991. His ventures included joint-ownership with Piers Adam of the SW1 Club (now known as Pacha), and The Conservatory based in Derby. After selling the clubs, he established a high-end pawnbroking business with offices in Bruton Street, Mayfair, to pawn expensive jewellery and luxury cars. He also owned several pubs on the King's Road in Chelsea. In 1995 Davenport established a business in property development and invested in entrepreneurial businesses in the UK, some of which he joined as a Non-Executive Director. After acquiring the manorial title of the village of Gifford in Shropshire, he began to call himself "Lord Edward," though he is not a member of the peerage. He is reported to own 25 buildings in the West End of London worth an estimated £100 million, controlled through a Monaco-based company called the Davenport Trust, as well as property in Monaco and Thailand.

According to Davenport, his business method is "buying leases on loss-making properties, returning them to a profit and then selling them." A BBC investigation reported that tenants would pay their rent to one of Davenport's temporary companies, which would then pay the owner of the building. He was accused by the BBC of increasing tenants' rents at short notice and evicting them if they did not agree to the new terms, but he denied the claims, calling them "very far-fetched." In 2006, his home was raided by police and Department of Trade and Industry investigators looking into his links with two property companies that collapsed owing millions of pounds. He avoided legal action on that occasion, although action was taken against an audit firm.

In 1998, Davenport and two other men were charged after running up an £18,000 bill at the luxury Gleneagles Hotel in Scotland during a five-day New Year party. The three were said to have posed as aristocrats. They denied the charges, which were later dropped, but Davenport failed to turn up in court and claimed that he had suffered kidney failure and could not travel because he was receiving dialysis.

33 Portland Place

In 1996, Davenport was introduced to Professor Cyril Foray, the former Foreign Minister and High Commissioner of Sierra Leone, during that country's civil war. Davenport entered into negotiations with the Government of Sierra Leone in order to refurbish their London embassy, 33 Portland Place, built in 1775 by Robert Adam and valued at £5 million. He acquired a lease on the building for £50,000 but eventually claimed the property as his private residence. The government of Sierra Leone took legal action against Davenport in London in 1999, but the case was eventually settled with no clear victor. In 2005 Davenport acquired the freehold of the building for £3.75 million; it is now valued at £30 million. The British Government offered to purchase a new building for the Sierra Leonean High Commission, leaving Davenport with the remainder of the short lease, which expires in 2020.

The property was regularly hired out for tango and pole-dancing lessons and parties, leading to many complaints from neighbours. In 2005, the Sunday Mirror reported that orgies were being held at Davenport's mansion. A political strategist for the Conservative Party was accused of being present by the Sunday Mirror although his party later denied his presence. In July 2006 Westminster City Council issued an enforcement order directing Davenport to cease using the property for "commercial and non-residential purposes" but this was essentially ignored and unauthorised use continued.

Davenport has also hired out the building as an exhibition space and filming location. All Visual Arts used it for a Frieze Art Fair exhibition titled Vanitas: The Transience of Earthly Pleasures in 2010 and singer Amy Winehouse used it to shoot the video for her hit song Rehab. In April 2010, the house doubled as Lionel Logue's clinic in Oscar-winning film The King's Speech starring Colin Firth. Davenport was living there during part of the filming; one scene was filmed in his bedroom. A number of porn films were also reportedly shot there.

In July 2010, following a party at 33 Portland Place, Westminster City Council brought a legal action against Davenport charging him with breaching a noise abatement order. The case was dismissed by Judge Purdy at Westminster City Magistrates Court, and Davenport was awarded £28,000 in costs. Later that month Westminster City Council brought an action at the High Court charging that Davenport's use of the property breached planning permission. The council reported that Davenport had filled a pool with Courvoisier cognac, which guests could row across. Davenport was found to have breached the 2006 enforcement notice and a High Court judge issued a permanent ban on the use of the house for non-residential purposes. In April 2011 Davenport lost an appeal against the injunction.

Patrick Cox

In 2008, Davenport purchased the fashion label of Patrick Cox for £2.5 million. Following the sale of his business, celebrity shoe designer Patrick Cox remained on the Board of Designers.

Gresham: conviction for fraud

In late 2005 Davenport acquired an existing shelf company and renamed it as Gresham Ltd – the name is similar to, but wholly unconnected with, the well-known wealth management company Gresham Financial – which he used as a vehicle for advance fee frauds. Gresham was falsely presented as a long-established, wealthy and prestigious firm with a prospectus claiming that it had been involved in the commercial loans market since 1958. The company promoted itself through glossy brochures and advertisements in the Financial Times.

Between 2005 and 2009, Davenport and several co-conspirators promised to finance over fifty commercial loans, targeting construction projects in several countries. Businesses were asked to pay large sums for "deposits", "verification fees", "loan guarantees" and "due dilligence". The company's records noted payments of £4.5 million from prospective borrowers. Ten of the largest prospects were promised loans of £500 million but, like the rest, received nothing. In one case reported by the Financial Times, a fee of €830,000 was charged as a "security deposit". The value of the fraud was said by prosecutors to be at least £12 million. Victims included Elizabeth Emanuel, who lost her savings after being promised a £1 million loan. An Indian businessman paid £285,000 to finance a €183 million loan but suffered "crippling losses" of £825,000 after no money arrived, leaving him owing €11 million.

In October 2009 Gresham was liquidated after companies secretly controlled by Davenport petitioned to have it wound up. He carried on the advance fee fraud through another newly acquired shelf company, Cutting and Company (Investments) Ltd, which had been established in 1930 and had been dormant since about 2000. Cutting & Co. was portrayed to the public as a restructuring expert. Davenport sought to keep his distance from the fraud by using aliases such as "James Stewart" or "James Stuart". However, he was exposed when fire regulators recognised "James Stewart" as Davenport from photographs on his own website and informed the Serious Fraud Office (SFO).

Two months later, at the start of December 2009, SFO investigators and police raided 19 commercial and residential properties in London, Surrey, Cheshire and Derbyshire and arrested six people. Davenport was charged with conspiracy to obtain money by deception, conspiracy to commit fraud by false representation and money laundering. He was also accused of carrying out a "price ramping" fraud on a £2.4 million property in central London to artificially increase its price at auction.

Also accused were David McHugh, an accountant; David Horsfall, Davenport's solicitor, Peter Riley, a Gresham director; Richard Kirkup, who had been convicted in 2004 of a previous advance fee fraud; and Borge Andersen, a Danish national who worked as Gresham's senior loans officer.

In June 2011, the SFO brought 11 test cases to Westminster Magistrates Court, though prosecutors said that these represented only a fraction of the true scale of the fraud, as there were at least 51 victims in the UK, Austria and India. Davenport was also charged with a separate £8 million fraud and money laundering scam. The three-month trial concluded in September 2011 with Davenport, Riley and Andersen convicted on a single count of fraud. The other charges against Davenport were left to lie on file.

Sentencing, Judge Peter Testar said: "This was a professional, sophisticated fraud which had a grave impact on its victims, decent honest people." He commented: "The stress and anxiety these people suffered were enormous and their lives have been grievously affected by this fraud. Some of them will never recover from that ... It was a professional and sophisticated fraud which had a great impact on the victims and each of these two defendants had a significant role to play."

Davenport was found to be the "ringmaster and guiding mind" behind the fraud, while Riley was described as "an accomplished conman" and a skilful liar who "strung along borrowers on a huge scale with bare-faced lies". Both men were sentenced to seven years and eight months' imprisonment, banned from becoming company directors for ten years and ordered to pay compensation and legal costs. Andersen, who was described as being "generally perceived as the most articulate and plausible of the fraudsters", was sentenced to 39 months. Horsfall, McHugh and Kirkup pleaded guilty and the trio are to be sentenced later.

Reporting restrictions were imposed at the start of the trial but were lifted in October 2011 after the final defendant, David Horsfall, admitted fraud by false representation, after writing a letter that falsified how much money Gresham had. Confiscation proceedings are due to begin in May 2012. According to Gresham's accounts, Andersen received £159,564, Riley £695,407, and Davenport £773,000, but a further £349,025 has gone missing and cannot be traced. However, SFO investigators are reported to have found that Davenport has few assets in his name and went to great lengths to distance himself from the fraud; as Judge Testar commented, "He did not leave very many footprints in the snow himself."

Following his conviction, Davenport issued a statement expressing his "shock and dismay" at the verdict and vowing to appeal against the sentence.

References

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