Jailed Jefferies Trio Lose Bid to Cut U.K. Prison Sentences

  • Hamish Maclellan, James Hyde, Phillip Jenkins denied reduction
  • They were sentenced to 4 1/2 years in 2015 for cheating taxes

Three former Jefferies Group LLC bankers convicted of using a film-investment scheme to cheat on their taxes were denied permission to ask a U.K. appeals court to reduce their prison sentences.

Hamish Maclellan, 44, former head of international equity sales at Jefferies, and ex-traders James Hyde and Phillip "Joe" Jenkins, 51, were sentenced to 4 1/2 years in jail in September 2015. The men asked a London court Friday to allow them to appeal their sentences on the basis the trial judge had incorrectly calculated their culpability and harm -- two of the benchmarks used in sentencing.

"They were highly intelligent men who were motivated by greed," said Judge Patrick Elias, rejecting the appeal. "The scheme was simply a criminal device from start to finish."

In their heyday in the early 2000s, the film investment schemes were touted around London to high earners in finance, sports and entertainment. Typically, investors borrowed money and claimed relief on the loans and their own investments to get tax benefits. The Jefferies bankers submitted fake time sheets to U.K. authorities to show they were "active partners" in film projects -- spending a requisite 10 hours a week working on the films to qualify for tax reductions. They claimed they didn’t know about the 10-hour requirement and just submitted what they were told to by their advisers.

The cases are part of the fallout from an investing boom that swept through the U.K. after then-Chancellor of the Exchequer Gordon Brown unveiled expanded film credits in his 1997 budget. Intended to boost a creative industry that had produced popular movies including "Four Weddings and a Funeral" and "The Full Monty," the loophole was widely abused, leading to a government crackdown and dozens of lawsuits.

Neil Williams-Denton, a financial adviser who was convicted in the Jefferies case and another related trial involving bankers from Royal Bank of Scotland Group Plc, was also denied a reduction in his sentence or permission to appeal his conviction. Michael Elsom, a former broker at Marex Spectron Group Ltd. who was acquitted at the RBS trial, sat in the public gallery Friday.

Jenkins’s lawyer, Orlando Pownall, tried to argue that "what occurred was the brainchild of others" and that the men had no authorship of the scheme and therefore should be seen as less culpable. Lawyers for Maclellan and Hyde agreed and also argued the judge hadn’t properly taken into consideration the men’s "good characters."

In an attempt to demonstrate Hyde’s continuing good character his lawyer, Neil Baki, told the three-judge panel that his client, who is in HMP Standford Hill on the Isle of Sheppey near Kent, England, has two prison jobs. One involves helping other inmates find work upon release and the second as a community driver taking other prisoners to charity placements.

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