Greeks bearing ships sunk by paper-chasing trainee

Nick Newling works for the Government Legal Service, but we are not allowed to tell you which department. This is not a matter of state security, it is simply that his boss does not want his position to become known and, like any 26 year-old new recruit, Newling does not want to upset them.

On first acquaintance, Newling displays a youthful informality that is typical of a newly qualified solicitor. “I could have booked a conference room for the interview,” he says, “but you have to fill out loads of forms”. We end up in a cafe.

But Newling's brief legal career has been far from typical. While his fellow trainees across the City were busy photocopying, Newling was at Watson Farley & Williams uncovering a £12m fraud involving Greek businessmen, Romanian shipyards, English brokers and City lawyers.

Mr Justice Cresswell last week delivered his judgment in the civil court and some of the defendants face prosecution on charges of perjury.

Newling comes across as an Adrian Mole of the legal world: young, bookish, bespectacled and probably terribly clever.

He is modest about his involvement in the fraud case. However, David Kavanagh, the partner in charge of him at Watson Farley, gives him generous credit: “It's true that writs were issued before Nick's involvement,” he says, “but he was very able, showed a lot of common sense and, in the end, was crucial in winning this case.”

Newling joined Watson Farley in September 1996 straight from Cambridge University and law school. “I wanted a firm that wasn't enormous, but had high-quality work,” he explains.

He spent his first six months in shipping finance and it was here that he heard about the fraud case. Then came a mandatory three months in property – he is not a big fan of property law – before a move to litigation. For the next seven months he worked intensively on the case and ended up knowing it inside out.

Five Greek ship owners – frontman Philip Makris, Ares Emmanuel (the “brains of the outfit”) and three men called Lemos (“I never found out what their relationship was,” concedes Newling) – set up an “extraordinary” fraud to purchase five ships from a Romanian shipyard. Claiming to be a subsidiary of a large US corporation, they approached the Berliner Bank for a loan worth 60 per cent of the cost. They claimed to have stumped up the remaining 40 per cent as security.

In turn, they approached the shipyard to ask for a 40 per cent credit towards the cost, claiming they would provide the remaining 60 per cent as security.

One “extra finesse”, says Newling, was that they borrowed from the bank on the basis that the ships were “with charter”, which increased their value. In fact, the necessary documents had been fabricated by Emmanuel.

Naturally, as the loan repayments failed to materialise, a complex web of deceit began to unravel. A tell-tale sign that something was amiss came when the Greeks claimed one of the ships was out at sea trading, while the creditors sat looking at it docked in the shipyard.

Newling's prominent involvement came by way of a fluke. Tim Strong was the partner acting for Berliner Bank, but he left for specialist shipping firm Curtis Davis Garrard shortly after Newling arrived in the department. Kavanagh, who was only made a partner last year, took over. “Obviously David knew the procedure, but I knew my way around the files and I think he looked to me quite a lot to help him along,” says Newling.

They decided to be “creative” in their search for evidence.

Newling found himself on his own, making three trips in 1997 to the shipyard in Romania.

The Romanian police had seized around 40 files from Rom Car – a broking firm – but, as they were in English, they had not been able to arrange them in any logical order. “The police were quite pleased to see me,” he says. Eventually he unearthed a damning fax sent by Emmanuel.

Last week's judgment found the Greeks liable for £12.5m, Rom Car for £10m and Michael Harvey, a partner at Holborn firm MJ Harvey & Co and solicitor to the Greeks, liable for £1.25m.

So does Newling think his traineeship was out of the ordinary?

“The case also involved reconstructing bank accounts and number crunching – I had to work like stink and make the trips to Romania,” he says. There was little back-slapping on his return and he quickly became embroiled in his next seat on the EC group.

Watson Farley offered him a job in litigation at the end of his training, but Newling says his plan had always been to work for the Government – partly because of the public service ethic, partly because he believes the work is “second to none”.

Newling says he is working on something “very exciting”. Unsurprisingly, we are not allowed to say what it is.

He has not really kept in contact with Watson Farley since he left. Of his fellow trainees, he is in closest contact with one who dropped out of law to become a computer programmer.

But Newling is still fond of his old firm: “I'll probably go back on the strength of this and get a few lunches out of them.”