Did Mr Trezevant's affidavit satisfy the relevant requirements?
62 It is not correct, as contended by Mr Matson, that Mr Trezevant's affidavit does not address knowledge of dishonesty on the part of Mr Matson. In his affidavit, Mr Trezevant identified each of the elements of each of the offences in the indictment. Each of the offences involved an element concerning Mr Matson's state of mind.
63 The conspiracy to commit mail and wire fraud count included an element that Mr Matson knew the unlawful purpose of the plan to commit the offence of mail and wire fraud. The mail fraud counts included elements that Mr Matson knowingly devised or participated in a scheme to defraud someone, or to obtain money or property, using false or fraudulent pretences, representations or promises; that the false or fraudulent pretences, representations or promises were about a material fact; and that Mr Matson intended to defraud someone. The wire fraud counts included the same or similar elements concerning Mr Matson's state of mind. The conspiracy to commit money laundering count included an element that Mr Matson knew the unlawful purpose of the plan to launder money and wilfully joined in it, or knew that the money or property involved in the relevant financial transaction was proceeds of some kind of unlawful activity.
64 Mr Trezevant deposed that each of the elements of each of the offences would be "shown at trial". It is clear, therefore that Mr Trezevant believed that the evidence would establish guilty knowledge or intent on the part of Mr Matson. Mr Trezevant also summarised, albeit in brief terms, what the evidence would establish in relation to each of the counts. He also summarised the facts concerning the alleged "scheme". The scheme is described in the following terms in paragraphs 33 to 43 of Mr Trezevant's affidavit:
33. From in or about the fall of 1999, and continuing through the early part of 2000, a number of persons residing in Florida, Georgia, Tennessee, Texas, Ohio, and other states, received a letter proposal and a brochure via Federal Express Priority Overnight mail from an individual who identified himself as "Roger Bronstein, Specialist Computer Programmer," on behalf of a company identified as Ascot Bloodstock, Inc.
34. Generally, the letter proposal indicated that Roger Bronstein was a self-made multi-millionaire who had discovered a method through which a person could earn great sums of money working approximately 10 hours per week. In pertinent part, the letter proposal stated:
I am giving you an opportunity to share in the success of a business I have built from the ground-up. If this opportunity greatly interests you, I will be happy to fly you to my private Villa on St. Martin, in the Caribbean, at my expense, so that you can evaluate the proposal for yourself.
This is no ordinary business:
- Over recent years I have invested less than $50,000 annually into my business, but on average it now produces a global income in excess of $1,000,000 per annum.
- I work approximately 10 hours per week (earning an average of $2,000 per hour!) year after year.
- Until retired about 24 months ago, I operated this business alone, without staff, stock, or specialised "management".
***
I am now prepared to share my expertise and my Professional Race Organizer Program with you on a license fee/royalty basis.
***
P.R.O. has the potential to comfortably add $200,000 to your annual income. I'm assuming that you start with an investment bank of just $5,000, and that you initially invest ten hours a week with your part time business. I am also assuming that you have absolutely no knowledge of the racing industry. Subject to certain conditions, this income will be tax free.
As your understanding of P.R.O. (and your investment bank) increases, your income will grow exponentially. It would be quite realistic for you to aim for a million dollar income in your third or fourth year of this part time business.
Here is the outline of my proposal.
If the idea of investing a few hours a week to add at least $200,000 to your annual income interests you, please call our live [24 hr. 7 days] answering service on toll free 1 877 999 9893. Simply leave your full name and mailing address and request a copy of the P.R.O. Report to be couriered to you. This comprehensive document presents some important facts and figures for your consideration.
After due consideration of the Report, you may proceed to the next step and we will arrange a fully paid round trip airline [Business class] ticket to St. Martin, for you to meet with my son, Baron, who personally trains all P.R.O. licensees. This will allow you the opportunity to familiarize yourself with P.R.O. Baron will put the Program through its paces and take you through a comprehensive training session that will allow you to access the consistency and international profitability of P.R.O. for yourself. In addition to this you will have the opportunity to experience first hand the lifestyle that P.R.O. has provided for my family and myself.
Your investment in the P.R.O. Program is dependent upon your choice from the schedule appearing at the end of this letter. For this you will receive the complete P.R.O. Computer Package (hardware and software license), and thorough personal coaching based on the knowledge and experience I have accumulated in my years in the Computer Racing Industry. It will also be necessary for you to set aside an investment bank of about $5,000.
35. A glossy brochure setting forth the specific details of the P.R.O. Computer Package was included with the letter proposal. The brochure included the following claims:
The Professional Race Organizer Program (P.R.O.) is a purpose-built hardware/software package that offers the international businessman and professional person the potential to earn consistent profits from thoroughbred, harness and greyhound racing, in an objective and precise manner.
P.R.O. makes it possible to generate a consistent cash income from race meetings anywhere in the world. The operator uses an ingeniously programmed palm-top computer to successfully back every runner in every race!
***
In allowing the operator to effectively back the whole field, the P.R.O. Program's copyrighted algorithms completely eliminate this risk. Indeed, the greatest challenge for the P.R.O. investor is simply to control greed and stick to P.R.O.'s strict operational guidelines.
36. In the initial documents and in subsequent meetings with BARON MATSON/BRONSTEIN, who identified himself as "Baron Bronstein," son of Roger Bronstein, and who was sometimes in the company of the person he referred to as Roger Bronstein (also referred to herein as ROGER MATSON/BRONSTEIN), the solicited persons were offered an opportunity to participate in the P.R.O. Program based upon a cash investment fee of $45,000, $90,000, or $135,000, together with royalty fees on any profits from the first five years of operation of 15%, 10%, or 5%, respectively, based upon the initial level of investment. As set forth above, the solicited persons were told that, should they be interested in investing in the P.R.O. Program, they would be flown to Roger Bronstein's private villa on St. Martin in the Caribbean, at Roger Bronstein's expense, so that they could better evaluate the proposal.
37. A number of persons accepted the offer and traveled at no personal expense to St. Martin and/or Freeport or Nassau, Bahamas, where they typically first met BARON MATSON/BRONSTEIN. Many of the persons also had telephonic contact with an individual who identified himself as "Gordon Grant," and who claimed to be working with Baron Bronstein (BARON MATSON/BRONSTEIN) and his father, Roger Bronstein (ROGER MATSON/BRONSTEIN). At times, Grant told some investors that he was a successful licensee participating in the P.R.O. Program.
38. Upon meeting with BARON MATSON/BRONSTEIN, the potential investors were provided with a "live" demonstration of the P.R.O. Program wherein a device referred to as a P.R.O., or Professional Race Organizer, was used to determine wagers to be placed on horse races in Australia via the Internet. Sometimes, BARON MATSON/BRONSTEIN represented to the potential investors that wagers were placed through one or more accounts established with the Totalizator Agency Board of New South Wales ("TAB"), in Australia. The majority of the investors' interactions were with BARON MATSON/BRONSTEIN.
39. TAB is an Australian-based provider of services enabling wagering and gaming on sporting events approved as sports betting events under Australian law, such as thoroughbred, harness, and greyhound racing. Through a TAB service called RaceTAB, customers are offered both on-course and off-course totalizator wagering services. Likewise, TAB offers a service referred to as SportsTAB, whereby fixed-odds sports wagering on domestic and international sports is possible. On occasion, TAB accounts were established by BARON MATSON/BRONSTEIN for the potential investors.
40. The potential investors were told that by using the P.R.O. and following the protocol established by the Bronsteins, it would be possible "to generate a consistent cash income from race meetings anywhere in the world." The investors usually paid fees, or made additional investments, in large cash payments or by electronic fund transfers to accounts located outside the United States, in accordance with wiring instructions provided by BARON MATSON/BRONSTEIN or Gordon Grant. The cash payments were usually collected in the United States by BARON MATSON/BRONSTEIN, or by a woman who identified herself as "Melinda Bronstein" or "Matilda Bronstein."
41. Shortly after most of the investors had accepted the letter proposal and paid the aforementioned up-front cash licensing fee, they were informed by BARON MATSON/BRONSTEIN that he had initiated a new program, referred to as the Managed Account Program. The investors were told that the Managed Account Program would alleviate the sometimes cumbersome task of operating the P.R.O., and increase their opportunities for return. The investors were told that Baron Bronstein (BARON MATSON/BRONSTEIN) and Roger Bronstein (ROGER MATSON/BRONSTEIN), acting through Ascot Bloodstock, Inc., and/or Cycle International, Ltd., would operate the Managed Account Program by pooling the investors' funds and managing the wagering process. The investors were also told that the Managed Account Program would allow them to collect a return on their investments of approximately seven to nine percent (7-9%) per month. The promised rate of return was generally based upon the initial royalty fee arrangement. Thus, investors who chose to participate in the Managed Account Program were promised that based upon their initial fee of $45,000, $90,000, or $135,000, they would receive 7%, 8%, or 9% return per month, respectively. Ultimately, substantially all of the investors elected to participate in the Managed Account Program, rather than the P.R.O. Program.
42. In addition, BARON MATSON/BRONSTEIN occasionally offered to increase the percentage of some of the investors' monthly returns if they increased their investment, promised not to remove any of their investment from the wagering pool, or offered to assist him in some fashion in his operations. For example, an investor named Wayne Walton routinely assisted BARON MATSON/BRONSTEIN in coordinating social functions to update the investors as to the purported status of their accounts, and to encourage additional investing. For his efforts and expenses associated with hosting and coordinating the social functions, Wayne Walton's purported return on his investment was increased from 7% to 10%. All of the investors received monthly account statements, typically through the mail, from Ascot Bloodstock, Inc., and/or Cycle International, Ltd., which purported to give the investors detailed financial information concerning their accounts, such as total amounts invested and earned.
43. In or around the early fall of 2000, the investors were presented with yet a new opportunity to invest up to $75,000 each, which, they were informed, would be used to place a wager on the Melbourne Cup horse race that would potentially earn them an ample return. The investors were ensured by BARON MATSON/BRONSTEIN that the new $75,000 investment was "guaranteed" and would be returned to the investors shortly after the race, regardless of the outcome of the race, and that any profits from the Melbourne Cup transaction would be paid out to the investors shortly thereafter. However, shortly after the Melbourne Cup horse race, BARON MATSON/BRONSTEIN, Gordon Grant, and ROGER MATSON/BRONSTEIN vanished, along with substantially all of the investors' money. The $75,000 guaranteed investment purportedly used to wager on the Melbourne Cup horse race has never been returned to the investors, nor have the investors received any of the promised returns on their investments, other than perhaps a few nominal payouts during the earlier stages of the scheme.
(Footnotes omitted.)
65 Mr Trezevant's affidavit also detailed certain facts relevant to two specific investors by way of example. Those facts suggested that Mr Matson was the investors' main point of contact. It was Mr Matson who made a number of the false and fraudulent representations to the investors.
66 Mr Trezevant deposed that the evidence would establish the following facts concerning the conspiracy to commit mail and wire fraud:
17. ... This evidence will establish that beginning in or about the Fall of 1997, and continuing through at least January 2001, BARON MATSON/BRONSTEIN, together with Roger Matson, a/k/a Roger Bronstein (sometimes referred to herein as "ROGER MATSON/BRONSTEIN"), and Gordon Robert Grant created and sent various proposal documents to individuals in the Middle District of Florida and elsewhere that contained false and fraudulent statements, promises, and representations in order to lure the individuals into investing in one or more fraudulent schemes called the Professional Race Organizer Program, the Managed Account program, and the Melbourne Cup program. The false and fraudulent statements, promises, and representations made to the investors included, among others, false assertions about the wealth and historical financial successes of Roger Bronstein and others from participating in one or more of the offered programs, as well as false assertions concerning the profits that would be and were being earned from the programs. In orchestrating the scheme, BARON MATSON/BRONSTEIN and others utilized the U.S. mails or private or commercial interstate carriers to send proposal documents and account information to potential and current investors. Further, in orchestrating the scheme, BARON MATSON/BRONSTEIN and others also caused wire transfers of funds to occur in interstate and foreign commerce.
67 In relation to the mail fraud counts, Mr Trezevant deposed that the evidence would establish that "each of the identified investors received a summary document through the mails in or around November 2001, purporting to bear information about the investor's Managed Account activity, which was false and fraudulent".
68 Similarly, in relation to the wire fraud counts, Mr Trezevant deposed that the evidence would establish that each of the investors "wire transferred funds (ranging from $25,000 to $135,000) in foreign commerce, or from banks in the United States to banks in other countries, based upon the false and fraudulent information provided to the investors by BARON MATSON/BRONSTEIN or one of the other named individuals participating in the scheme and artifice to defraud".
69 In relation to the conspiracy to money launder count, Mr Trezevant deposed that the evidence would establish the following:
28. …This evidence will establish that BARON MATSON/BRONSTEIN or one of the other conspirators caused bank accounts to be opened inside and outside of the United States of America including, but not limited to, bank accounts opened in the name of ASCOT BLOODSTOCK and of CYCLE INTERNATIONAL LTD, sometimes identified as CYCLE INTERNATIONAL LTD trading as Fletcher International Corporation. In addition, BARON MATSON/BRONSTEIN or one of the other conspirators obtained funds of varying amounts, including amounts in excess of $10,000, from victim-investors of the mail and wire fraud schemes in different forms, including cash, checks, certified checks and wire transfers of funds, and caused the funds to be deposited in bank accounts controlled by the conspirators. Further, after the proceedings of the mail and wire fraud schemes were deposited into bank accounts controlled by the conspirators, the proceeds were thereafter - often in an amount in excess of $10,000 - withdrawn by one or more of the conspirators or transferred to an account or accounts controlled by one or more of the conspirators with the intent to promote the carrying on of the schemes.
70 Mr Trezevant's affidavit also stated that Mr Matson used a number of different names, including Baron Bronstein, Philip Fletcher and Lincoln Robert Marshall. He had passports in the names of Baron Matson and Philip Fletcher.
71 It may be accepted that the facts and evidence outlined in Mr Trezevant's affidavit do not directly or expressly assert that Mr Matson knew that the scheme was fraudulent, or knew that representations made to the investors were false. That said, when it comes to proving that an accused person knew that representations were false, or knew that a scheme was fraudulent, it is frequently necessary to resort to circumstantial evidence. Prosecution cases concerning fraud and dishonesty frequently rely on inferences that can be drawn from all the surrounding facts and circumstances, including the extent of the accused's involvement in the scheme and the making of the representations. The case against Mr Matson is no exception.
72 The question then is whether the facts and circumstances outlined in Mr Trezevant's affidavit are such as to incline the mind towards assenting to, rather than rejecting, the proposition that Mr Matson knew the scheme to be fraudulent, and knew that certain of the representations that were made to investors were false. That inclination of the mind may be based on inferences that might be drawn from the overall facts and circumstances of the scheme and Mr Matson's involvement in it.
73 When close regard is given to Mr Trezevant's outline of the facts and evidence, it is tolerably clear that the facts are capable of inclining the mind towards accepting that Mr Matson knew that the scheme was fraudulent and that the representations that were made to the investors were false. The facts concerning the nature of the scheme, the nature of the representations made pursuant to the scheme, Mr Matson's involvement in the scheme and the making of the representations and other surrounding facts and circumstances are sufficient, by reason of inferences that might be drawn from those facts and circumstances, to support a belief that Mr Matson knew the scheme was fraudulent and representations that were made as part of the scheme were false.
74 The facts include, for example, that Mr Matson told investors that the new $75,000 "investment" which related to the 2000 Melbourne Cup was "guaranteed" and would be returned to investors shortly after the race, regardless of the outcome of the race. It is difficult to accept that Mr Matson genuinely believed that it was possible to guarantee a return from a horse race. In any event, despite the representation of a guaranteed return shortly after the race, Mr Matson, his father and Mr Gordon Grant "vanished, along with substantially all of the investors' money". In criminal proceedings in Australia, and presumably in the United States, evidence of a defendant taking flight apparently to avoid apprehension is a well-established basis for inferring consciousness of guilt, including, in particular, to state of mind elements of an offence. In a case such as this, a jury would be entitled to treat such evidence as constituting significant evidence of, at least, lack of a bona fide belief in the genuineness of the schemes deployed. Any innocent explanation for such flight is a matter for trial, not for extradition, except perhaps at the s 22 stage.
75 Inferences may also be able to be drawn from the fact that Mr Matson identified himself as "Baron Bronstein" to the investors, yet he held passports in the names of Baron Matson and Philip Fletcher.
76 It should also be noted in this context that Mr Matson's submission that his father was the "prime mover" and that he was a mere salesman or promoter is not reflected in the facts set out in Mr Trezevant's affidavit. Those propositions were certainly not uncontentious, as suggested by Mr Matson. It would appear that the scheme involved holding Mr Matson's father out as the self-made millionaire who had devised the computer program that was supposed to earn investors great sums of money. It does not follow that Mr Matson's father was in fact the "prime mover". It would also appear that the investors primarily interacted with Mr Matson. It does not follow, however, that he was a mere promoter or salesman. But even if he was, that is a matter for the jury, not extradition.
77 It follows that it was open, in all the circumstances, for both the magistrate and the primary judge to find that Mr Trezevant's affidavit satisfied the requirements in s 19(3)(c)(ii) and paragraphs (2)(b) and (3)(c) of Article XI of the Treaty. The affidavit contained a description of the conduct constituting the offences. The statement of facts also set forth reasonable grounds for believing that the offences were committed and that Mr Matson was one of the offenders who committed them.
78 It also follows that the primary judge did not err in determining that the relevant requirements of the Extradition Act and Treaty had been satisfied. A fair reading of the primary judge's reasons reveals that his Honour did not err by reversing the onus of proof as contended by Mr Matson. It is tolerably clear that when the primary judge referred, in paragraph 70 of the Judgment, to the availability of a defence or the existence of an alternative hypothesis consistent with innocence, his Honour was merely responding to the particular way that Mr Matson had put his case. So much so was conceded by Mr Matson in his submissions on appeal. More significantly, it is abundantly clear from the preceding paragraphs of the primary judge's reasons, in particular paragraphs 62 to 69, that his Honour addressed the correct question, being whether Mr Trezevant's affidavit contained a description of the facts of conduct which showed that there were reasonable grounds for believing that Mr Matson had committed the offences, and found that the affidavit did satisfy the relevant requirements. There was no error in the approach taken by his Honour.