Private security firm set up by GP Noble funds, court hears
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Prosecutor David Farrar QC claimed that Peter Malmstrom, 45, laundered £6.95m, allegedly stolen by Tony Morris, 49, from Nottingham-based GP Noble.
He alleged that Mr Malmstrom invested £1m in Cerberus Security Group Limited in November 2007, and lent £4.35m to the same firm in February 2008. Mr Farrar claimed the defendant also transferred £1.45m of the stolen funds to the client account of Hassan Solicitors, Gibraltar, and £150,000 to Stratstones of Mayfair.
Mr Morris, former founder of The Money Portal, is accused of stealing £52m from nine pension schemes managed by GP Noble to fund a lavish lifestyle.
Mr Malmstrom is accused of laundering some of this stolen money.
Jurors heard that Mr Malmstrom told investigators from the Serious Fraud Office he believed money passed to Cerberus from an offshore company associated with Mr Morris – Multiple Unilateral Financial Futures – was “untainted”.
Mr Malmstrom, who said he had been granted Monégasque residency through his association with Princess Caroline of Monaco and her husband Ernst August, Prince of Hannover, told the SFO in a prepared statement: “I understand it is suspected £52m was dishonestly appropriated from nine pension funds formerly managed by GP Noble Trustees. I deny any dishonest involvement in this matter. I accept a sum of approximately £4m was invested by a company called MUFF into Cerberus Security Group Limited, a company with which I am closely involved. This was a loan agreement structured by Pitt Capital in Sydney, Australia. I believed at all times any funds invested into Cerberus were untainted and did not represent the proceeds of any criminal conduct.”
The court heard that Mr Malmstrom told investigators that Cerberus was a ‘bespoke’ security firm for which he acted. He said Cerberus had not carried out any due diligence checks on MUFF.
The court also heard that Mr Malmstrom had told investigators MUFF was a relatively new company but he knew some of the people involved, in particular Mr Morris, and he knew Hassan’s was a “credible” international law firm.
He said Cerberus “sought comfort” in Hassan’s involvement.
Mr Morris is alleged to have overseen the removal from nine pension funds in two separate waves in 2007 and 2008.
Mr Morris denies conspiring to defraud, two counts of theft and two counts of aiding and abetting fraud. Mr Malmstrom denies money laundering, entering or becoming concerned in a money laundering arrangement, and two counts of transferring criminal property.
The trial continues.