The Philatelic Exporter, Editor and Publisher Graham R. Phillips, June 1992, Pg. 4-5
As a result of Scotland Yardâs investigation, eight members of the Philatelic trade were arraigned at Bow Street Magistrateâs Court on November 28, 1990. On June 12, 1991 they were committed on bail to stand trial. That trial began April 27, 1992 at Southward Crown Court.
Six companies involved
The defendants are involved with the following companies:
* Format International Security Printers, founded and run by Peeling and Hughes, until Feigenbaum took it over and employed Wallen in March 1989
* Philatelists Ltd, the philatelic agents established by Grover which went into liquidation
* Philatelic Distribution Corporation Ltd. (PDC), which succeeded Philatelists Ltd as agents, the principals of which were Feigenbaum, Lagerwaard, and Wallen before he was moved to Format
* Urch Harris & Co. Ltd. (UH), owned by Feigenbaumâs family was to have been the principal retail outlet for the âerrorsâ. Also involved were Lagerwaard Grover, and Pillinger
* London and New York International Stamp Company Ltd. (LNYI) also owned by Feigenbaumâs family, was another outlet for the bogus stamps
* Casco Ltd. (later Caphco Ltd. after privatization), of which John Smith was managing director, philatelic agents to Commonwealth countries.
The trial began on April 27 at Southwark Crown Court (London) of eight men charged with fraud and conspiracy concerning the alleged production of certain issues of Commonwealth countriesâ postage stamps during the mid to late 1890s. Had the fraud been allowed to succeed, the prosecution, led by Mr. Michael Worsley QC, alleges the millions of pounds would have been involved. The errors included missing colours, misplaced watermarks, imports, etc and were to have been gradually sold to the public as âraritiesâ.
The start of the case was delayed whilst the 18 barristers and their reams of paper were found room in the crowded court. The trial is expected to last three or four months.
The Defendants and the Charges
* Clive Feigenbaum (51), Mount Park Road, Harrow-on-Hill, Middlesex: one charge of fraudulent trading, three of conspiring to use a false instrument, and three of conspiracy to defraud.
* Ronald Grover (56), Lodge Road, Beulieu, Hampshire: one charge of aiding and abetting fraudulent trading, one of conspiring to use a false instrument, and one of conspiring to defraud.
* Frederick Hughes (69), Downs Road, Thornton Heath, Surrey: one charge of fraudulent trading, two of conspiring to use a false instrument, and two of conspiring to defraud.
* Aart Lagerwaard (44), Cranberry Close, Marchwood, Southampton: one charge of aiding and abetting fraudulent trading, two of conspiring to use false instrument, and two of conspiring to defraud.
* William Peeling (69), Northdown Road, Woldingham, Surrey: one charge of fraudulent trading.
* Brian Pillinger (51), Over Lane, Over Almondsbury, Bristol.
* John Smith (38), Canford Gardens, New Malden, Surrey.
* Ronald Walden (44), Allington Lane, West End, Southampton.
Each of the last thee named face one charge of aiding and abetting fraudulent trading, one of conspiring to use a false instrument, and one of conspiring to defraud.
The offences are alleged to have taken place on dates between October 1 1985 and July 29 1989.
Peeling has admitted his one charge and will be sentenced at the end of the trial.
The others have pleaded not guilty to all charges.
Outlining the prosecutionâs case against the defendants, Mr. Worsley told the jury that it concerned the deliberate production of postage stamps with errors which were then sold to collectors who believed they were rare examples which had occurred by accident.
He said that the defendants were some of the principal people concerned, and that a number of other people were involved, some guiltily and some innocently, but so many that a courtroom would not be big enough to hold them. The Crown had limited the number they charged and endeavored to put in the dock those principally involved at the top of the tree.
âBogus stamps were printed wholesaleâ Mr. Worsley said, âIt was an Alice in Wonderland situation that checkers in a security printers who were supposed to be checking stamps were being employed and paid to make sure the errors occurred. It is a Cloud Cuckooland situationâ.
The stamps, referred to as âfunniesâ and âMickey Mouse stampsââ, included Andrew and Sarahâs wedding and the Queenâs 60th birthday. Others included a St. Vincent tennis stamp with a missing ball; the actual printing plate of which had been found at Format.
Mr. Worsley said it was quite inconceivable that the colonial governments had ordered such errors, as had been claimed by the defendants. The bogus stamps had been ordered by the agencies, he stated.
The first of a series of police raids took place in April 1989 when Formatâs premises at Camberwell were searched and a stack of about 44,000 St. Lucia stamps with misperfs and missing colours was discovered, which Hughes said were awaiting destruction.
But another employee told police they were being sent to PDC. Hughes was arrested later that day and on being interviewed he told police he was merely following the system adopted by Peeling, whom he had replaced at Format.
On May 9 1989 it is alleged that a special meeting chaired by Feigenbaum, described by the prosecution as the âprime moverâ in the fraud, took place at Urch Harris. After this meeting important documents were shredded and following a police raid on a south London warehouse 91 boxes of stamps were also shredded.
On May 10, police visited Caphco in Sutton and arrested John Smith. On being shown a quantity of Pitcairn Is stamps with inverted watermarks he is claimed to have accepted that they were deliberately produced to promote the interests of the islands but were sold at face value, mainly to Urch Harris, to boost the shrinking collector market.
In February 1990 property was seized by police from urch Harris and Philatelic Distribution Corporation, and a large quantity of stamps was found at LNYâs warehouse in Stratford, east London.
Feigenbaum was arrested at his home, where bogus stamps were found in his study. He said LNY was owned by his family, UH was a subsidiary with no other shareholders, and he was the managing director of PDC.
âRight at the center of the group of related people and companies was Mr. Feigenbaum in a position of control. Wherever you look you find him - something more than a coincidenceâ Mr. Worsley told the court.
On May 3 1990 Wallen was arrested and said he was the stamp production manager at PDC firstly under Lagerwaard and then Feigenbaum. He transferred to Format in March 1989. The same day Grover and Lagerwaard were arrested. The latter said he worked in various capacities at UH and philatelists, and became a director of UH in 1987. He also said âspecialsâ were created to boost sales.
âErrors to orderâ
The first prosecution witness to be called was William Peeling, who had earlier pleaded guilty to one charge of fraudulent trading.
70 year old Peeling described himself as a craftsman, having worked in stamp production since he was 14. He had set up Format in 1969 with three others, all directors and equal shareholders, including Hughes one of the defendants. In April 1988, he told the Court, he was summoned to the directorâs office by Hughes who told him his services were no longer needed and that Hughes was replacing him as managing director.
He added angrily that he left the company instantly and that he was forced to sell his shareholding in Format and another company he had helped to found, Caldew Colour Plates, to Feigenbaum.
âWe did nothing unless it was orderedâ he said referring to the flawed stamps, which were passed to Philatelists and then PDC. He recalled working with Grover at Philatelists producing stamps for islands with âso many weird namesâ. His first meeting with Feigenbaum was in March 1987 when the latter became owner of PDC.
On his second day in the witness box Peeling told the Court of the âburdenâ that the deliberately produced errors had become to his two companies. Format and Caldew, saying âI felt it was wrong, it was obviously wrong, I kept those feeling to myself.â Whenever printing contracts were placed by Philatelists and PDC deliberate variations were always ordered, but on the rare occasions when Format dealt directly with a postal administration no such mistakes were asked for.
In 1985 Format got into financial problems because of the collapse of Philatelists. A promised â¤100,000 from Feigenbaum to relieve the pressure never materialized, and by the time Peeling left the company in 1987 its finances were in a poor state, although it was waiting for a â¤900,000 payment from an unconnected American firm.
Cross examined by counsel for Lagerwaard, Peeling said that as the main person who dealt with Formatâs clients, he had the impression that both Feigenbaum and Grover were dynamic and convincingâ.
In 1983 when Formatâs relationship with Philatelists first began Peeling was shown a contract which gave him the impression that Grover had a license to print varieties.
Early in 1987 Peeling said he saw a contract between Feigenbaum and Grover to âsatisfy he had purchased the rights from Mr. Grover to reprint. It contained exclusion clauses from overseas countries saying there should never be a reprint.â
âIt did disturb me that my reaction was not to refuse. I must have had a blank at the timeâ. He added.
As we closed for press (May 11), Peeling completed his fifth day in the witness box. The case continues.