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JCC theft has foreign flavor

Burglary one of many thought to be linked to Lloyd's lawsuit

Daily Press

October 12, 1998

By Patti Rosenberg

JAMES CITY

Burglaries seldom make headlines even in the quietest towns.

But news of a peculiar burglary last month in James City has traveled hundreds and thousands of miles by word of mouth causing some folks in London and New York to look over their shoulders and add locks to their doors.

It's probably all just a bizarre coincidence, they say, but the pattern that's emerging is more than a little disturbing. Indeed, the tale sounds like a lot element in a Charles Dickens novel, but something that might happen in real life.

Litigants in a huge, high-stakes battle with the famous Lloyd's of London insurance institution keep falling victim to thefts and break-ins during which little is tampered with except information relating to their cases.

The burglary at the law office of Hale & Hall on McLaws Circle in the Busch Corporate Center is the latest example.

"This was definitely not a typical burglary," said Investigator Steve Rubino of the James City County Police Department.

The office was ransacked, but almost nothing stolen.

Just documents in the case of David, Deborah and Susan West vs. Lloyd's of London.

Days earlier, the case had gone the farthest of any case filed in the U.S. to make the prestigious corporation stand trial for allegedly suckering thousands of people out of hundreds of millions of dollars.

Camera equipment, several Mont Blanc pens, an expensive Browning 9 mm semi-automatic pistol and almost $50 in cash were removed from a drawer but left behind, said attorney Earle Hale.

"We have been able to determine that the burglars spent an extensive amount of time reviewing files," Hale said.

"Despite the fact that there were literally tens of thousands of dollars worth of valuables in the office, the only materials which were taken were files relating to that case."

To backtrack briefly, the story begins more than 25 years ago, when Lloyd's liberalized its requirements for investors, known as "Names."

Becoming a Lloyd's Name was traditionally a privilege extended only to members of the British elite who pledged to pay "down to their last cufflink," according to legend, but who routinely earned generous profits.

Unlike stock investors, who losses are limited to the capital they invested, Names function like partners in an insurance company, with unlimited liability.

The rules were loosened in the 1970s and 1980s. For the first time, upper-middle-class British citizens, foreigners, and women were allowed to join. The number of Names ballooned from about 6,000 to more than 30,000 just in time to assume massive debts.

Billions of dollars in asbestos-related claims were being made on policies taken out decades earlier. Millions more were owed in the Exxon Valdez oil spill, the Lockerbee air crash and Hurricane Hugo.

The losses were steep enough to wipe out many Names' entire fortunes. Thirty were thought to have committed suicide by 1995, the Times of London reported. Not that suicide absolved them. Their obligations to Lloyd's transferred to their estates after death.

While Lloyd's tried to collect, some Names began filing lawsuits alleging fraud. They charged that insiders knew of the looming crisis and launched a worldwide campaign to recruit new Names for the express purpose of absorbing the losses.

Lloyd's denies that accusation.

Hale filed one of those lawsuits in Los Angeles Superior Court in 1994 on behalf of a California man and his daughters.

A graduate of the College of William and Mary's law school, Hale moved back here several years ago after practicing in California for most of his career.

Like all the suits filed in the U.S. so far, the case was dismissed because of a clause in the Lloyd's agreements requiring all legal disputes to be tried in English courts.

At the end of a long appeals process, however, Hale won a significant victory Sept. 1. A judge ruled that the case could, in fact, go forward in the United States.

Days later, during the Labor Day weekend, Hale's office was broken into.

"It does seem rather strange," Nick Doak, a spokesman for Lloyd's, conceded.

But is has "nothing to do with us," he emphasized. "We don't go around burglarizing people."

Hale also stressed that he's not accusing anyone of the crime. "We have absolutely no idea who was involved," he said.

Police haven't ruled out the possibility of some Lloyd's-related connection, however, said Investigator Rubino.

In any case, "professionals were involved," he said, a conclusion he bases on the method of entry and the type and volume of items stolen.

At least six other offices in the building were burglarized the same night. But there were few signs of forced entry, Rubino said, as though the burglars had keys or were experts at picking locks.

Mainly, computer equipment was stolen from the other offices, a couple of dozen pieces but only the CPU's, or central processing units, which include the hard drives that store most of a computer's files. No monitors or keyboards.

"A common thief would steal things easily exchanged on the streets for drugs," Rubino said. "People don't steal that number of CPU's to go pawn them or sell them on the street."

This is at least the sixth incident in two years in which Names or their representatives suffered thefts or burglaries, and in which information apparently was intended to be the main thing sought or taken.

Reporters who heard about the burglary at the office of Catherine Mackenzie Smith in July 1996 tried to get her to say she suspected Lloyd's was involved, recalled Mackenzie Smith, a Name and also an English attorney representing hundreds of other Names at the time.

A fax machine, computer server and hard disk drive containing all of her Lloyd's correspondence for the last year were stolen, she said.

"But I'm a lawyer. I'm a serious person," not someone who jumps to hasty conclusions, Mackenzie Smith said.

She said there wasn't a "shred of real evidence" linking the crime to Lloyd's.

But the other incidents she has learned about since then seem to add up to "a bit of odd coincidence," Mackenzie Smith said, admitting that it's also a bit scary.

Tom Seifert, a Manhattan attorney who represents several Names, said he would find it shocking if Lloyd's was mixed up in any of the crimes.

Nevertheless, he admitted, he has installed more locks on his office doors since learning about Hale's burglary.

Cases of Note

The theft of files from the office of Williamsburg lawyer Earle Hale is one of several incidents involving Lloyd's-related material. Here's a rundown:

Burglary of Earle Hale's law office:

Earle Hale's law office in James City County was burglarized over the Labor Day weekend, according to police, who said nothing was taken from his office except legal papers. Hale said the papers all related to one of his cases: David, Deborah and Susan West vs. Lloyd's of London.

Burglary of Dona Evans' home:

Dona Evans is a Lloyd's investor and co-chair of the Norwich Union Action Group, which represents about 200 investors. A burglar scaled an 8-foot-high wall to gain entry to her house in London early June7. She said only her laptop computer, with evidence against Lloyd's stored in it, was stolen. A printer, CD player and other items were left behind.

An officer at the Hammersmith police station in England confirmed that the burglary was reported to police and that nothing was taken except the computer.

Disappearance of Christopher Thomas-Everard's briefcase:

Lloyd's investor and anti-Lloyd's activist Christopher Thomas-Everard said his briefcase was taken from the Royal Courts of Justice in London while he was there watching a case involving Lloyd's in July 1997. Inside the briefcase was a $3,000 laptop computer with data about Lloyd's stored in it. In the following days, Everard said, he checked to see if security or cleaning people had found it. They hadn't. But about a week later it mysteriously turned up near where he left it. Nothing was missing. Thomas-Everard said he reported the theft to the Courts of Justice security office, but the security office said there was no record of it.

Burglary of Sally Noel's apartment:

The London apartment of outspoken Lloyd's opponent Sally Noel was burglarized Dec. 6, 1996. A video recorder, a tape recorder and a few pieces of jewelry were stolen, but more valuable pieces of jewelry were left behind, she said.

What struck her as odder: file cabinets were ransacked and papers strewn everywhere. None were missing, however. Noel believes that was because she kept her Lloyd's paperwork elsewhere. The documents in the apartment belonged to a friend who had just moved in with her.

An officer at the Kensington police station confirmed that the burglary was reported, but said he was not allowed to provide any more information over the phone.

Burglary of Las Vegas man's home:

A box of documents relating to Lloyd's litigation was stolen from a cabinet in the garage of an elderly Las Vegas man in later summer 1996. The man's daughter asked that he not be identified because of his age and fragile condition and the family's fear of possible retaliation. Nothing except the documents was taken, she said.

Tools, camping and fishing gear, appliances, a golf cart with the keys in it and a Lincoln Continental were left behind.

The victim's daughter said the crime was not reported to police. She said her family didn't know when it actually happened, as opposed to when they discovered it, and didn't think police would be able to do anything to solve the case. She said she felt it would just upset her mother more to have to talk to police about it.

Burglary of Catherine Mackenzie Smith's office:

An attorney representing hundreds of Lloyd's investors, Catherine Mackenzie Smith had her office burglarized the night of July 18, 1996. A fax machine, computer server and hard disk drive were stolen.

The hard disk drive contained all of Mackenzie Smith's correspondence about Lloyd's for the previous year. Mackenzie Smith said she reported the burglary to Whitechapel police, but an officer at that station said he could find no record of the case.

Daily Press

 

A BRIEF HISTORY OF LLOYD'S OF LONDON

1680's

Edward Lloyd opens a coffeehouse near the London docks. It evolves into a place people gather to pick up the latest shipping news and, soon, a marketplace for shipping insurance, investors who agree to assume the risk for a commercial ship owner issue a contract and sign their names. Later, the investors are referred to as "Names." Over the next several centuries, Lloyd's grows into a profitable and prestigious investment society for the British elite.

1970s-80s

Lloyd's lowered its standards for Names, accepting members of the English upper middle class, foreigners and women for the first time. The number of investors swells from about 6,000 to more than 30,000.

1973

David West of California becomes one of the new Names in the U.S.

1983

West's daughters, Susan and Deborah, are accepted as Names.

Late 1980s-early 1990s

Asbestos-related claims on policies issued decades earlier create a crisis for Lloyd's, which racks up losses of 8 billion-the equivalent of $12 billion. Names bear "unlimited liability" for the debt.

 

1994

Lawyer Earle Hale files suit against Lloyd's in Los Angeles Superior Court on behalf of David, Susan and Deborah West. The family is among hundreds of Names in the U.S. and England suing Lloyd's. They allege that Lloyd's insiders knew of the impending financial disaster and recruited them for the purpose of absorbing the losses.

1995

Lloyd's motion to dismiss the West case is granted.

1997

Court of Appeals reverses the dismissal.

1998

Case goes back to Superior Court, where a judge rules Sept. 1 that it can go forward. Days later, documents relating to the case-and only documents relating to the case-are stolen during a burglary at Hale's law office in James City.


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