Operation Rize - the inside story on the Met's biggest-ever sting

No 3 Park Street is an innocuous black door behind The Dorchester hotel. No safety deposit centre likes to advertise itself to thieves. Only it wasn't burglars who broke into the three branches of the Safe Deposit Centres Ltd, in Mayfair, Edgware and Hampstead, at 3pm on 2 June 2008, but Metropolitan Police officers carrying out simultaneous armed raids.

No one answers the Park Street door now - the premises are closed. There is nothing today to give any indication of the mad scramble nearly four years ago when 500 officers in flak jackets swarmed through London in convoys of shiny black 4x4s. Waving warrants, the police forced the Safe Deposit Centres' staff to open up the doors to the vaults. It was one of the largest operations in the history of the Met.

The 6,717 boxes took 11 days to empty, each Safe Deposit premises being turned into a makeshift evidence room as officers, with diamond-tipped drills and angle-grinders, broke into every box. Half were empty, but 3,554 boxes were found to contain, as well as cash and jewellery, stashes of child pornography, false passports, gold, pure cocaine, ivory, firearms, and guns subsequently linked to murders. Operation Rize has been hailed as a great coup. 'The sheer volume of money concerned - £53 million in cash, of which £12.5 million so far has been subsequently seized by the courts,' was the first response from Detective Chief Inspector (now Superintendent) Mark Ponting of Scotland Yard, when asked what he thought made Rize so successful.

So far 250 court appearances have led to 30 convictions, with more in the pipeline. Box 3892 at Edgware Safe Depository, rented in the name of John Derriviere, contained a Brockock hand gun, nine rounds of ammunition, drugs and about £20,000 in cash. Derriviere was convicted of firearms, drugs and money-laundering offences in September 2009 and sentenced to eight years. The box belonging to 49-year-old Yuri Harris, who had previous convictions for stealing lug-gage at Gatwick and Heathrow airports and in Switzerland, contained £101,176.76 made up of sterling, dollars, yen, Swiss francs and Thai baht. As he'd never paid any tax, his cash was taken by the state in lieu.

Another box contained 140g of cocaine and £62,500 in cash. Yafet Berhane, a suspected drug dealer, was jailed in March 2009 after £122,000 was found in his box; 45-year-old Gavin Leon was jailed for five years after a Glock 9mm semi-automatic was discovered in his Hampstead box; David Wilson, 39, already serving two years for drug-dealing, turned out to have £100,000 in cash hidden away. Another box, 2585, belonging to a Michael Geraghty, the proprietor of a sex shop called Fettered Pleasure in Islington, held thousands of indecent images of children. This led to the breaking of a paedophile ring and Geraghty was sentenced to 15 months for possessing and making indecent images in March 2010.

Last month the two directors, Milton Woolf and Jacqueline Swan, and one former director of the company, Leslie Sieff, whom the Yard felt had enabled this bonanza of crime, were convicted and sentenced at Southwark Crown Court. Fifty-five-year-old Woolf, of Golders Green, was sentenced to four years and six months after pleading guilty to 14 offences, including money-laundering and possession of a firearm. Forty-seven-year-old Swan, who lived in Barnet, was sentenced to a year for seven offences of failing to disclose money-laundering. Sixty-three-year-old Sieff, of West Hampstead, was given a £1,000 fine and ordered to pay £750 costs after admitting possession of $60,000 in counterfeit US dollars. He is currently recovering on a cruise.

Yet the true story of Operation Rize reveals something far more chilling - a virtually un-noticed change in the law that strikes at the very heart of the British justice system. Under the Proceeds of Crime Act of 2002 (known as POCA), valuables and cash above £1,000 are presumed by the police to be the proceeds of crime, unless you can prove otherwise, a total reversal of the presumption of innocence. Aside from those three dozen or so people found guilty, the vast majority of the 3,500-plus box owners have turned out to be innocent. Yet their money was confiscated, and in many cases is still being held, by the Metropolitan Police or the Inland Revenue. The owners have spent nearly three years and thousands of pounds in uncompensated legal fees having to justify why they kept their personal belongings in safety deposit boxes and how they came by them in the first place. Worse still, when people have had their belongings returned, in some cases cash and jewellery has been missing.

Many of the box owners were Jewish or Asian; their families had fled Nazi Germany, escaped the bloodbath of post- partition India, or been thrown out of Uganda by Idi Amin. 'These are people who have a history of having to move fast,' says Siobhan Egan of Lewis Nedas, the London solicitors who represented over 100 of the box owners. 'Many had come to the end of their business lives. They traditionally keep cash and jewellery quite legitimately.' Lewis Nedas put an advertisement in The Jewish Chronicle and was inundated with responses from outraged Jewish pensioners. 'A client of mine had a great deal of jewellery taken, another had £100,000 in cash, another £120,000,' says Egan.

'Most of our clients were from classic immigration backgrounds - Jewish, Asian and Chinese - where cash and jewellery are the norm,' says Allen Yhearm, of the forensic accountants Appleton Richardson & Co, which has spent the last three years helping its clients to prove that they own their own property. 'Of course there were elements of criminality,' says Yhearm, 'but go to the safety deposits in any major bank and you'd find just the same thing.'

'When do you interfere in the rights of privacy and property of the many to catch a few?' asks David Sonn of Sonn Macmillan Walker, another firm of lawyers that represented many of the victims. When I said to Superintendent Mark Ponting that I assumed in Britain you were innocent until found guilty, he said: 'Well, you're not. Everything we did was within the legislation.'

As well as elderly refugees and their heirs, among the box owners were High Court judges, aristocratic English ladies hiding their rocks from their ex-husbands' solicitors, even senior police-men. The Rabbi of Mill Hill Synagogue, Yitzchak Schochet, had a box: 'I thought safety deposit boxes were supposed to be private,' he says.

There was a massive cultural divide between the police and the depositors. Regardless of ethnic background, the rich keep their money in all sorts of different places and like to spread it around to minimise risk. But that's hard to explain to the average 19-year-old DC. 'The police were amazed,' says one lawyer who worked with the victims. 'They just assumed all the owners would be crooks and no one would ask for their possessions back. In fact they were mobbed by furious citizens.'

Legally, the warrant appears somewhat dubious - the police only had three warrants to search 6,717 boxes and each one was an individual's private, leased property. 'I can't understand why they didn't just get a warrant for the boxes they wanted to open,' says a former employee at the Safe Deposit Centres. 'We've always given them access with a warrant before. It's like knocking off an entire block of flats just because you've got a burglar living in one flat.' 'It was a fishing expedition,' says another lawyer. 'And the police in this country are specifically forbidden to do that.'

The Met had to go 'judge-shopping' to find one who'd grant the warrants, as the original application was rejected by Southwark Crown Court, the Met's normal court. Every lawyer ES spoke to was keen to reiterate how unusual this is. The Met turned to Judge Kenneth Macrae, of Croydon, now retired. Statistical information, the Met told him, suggested that 90 per cent of the boxes would be linked to crime.

In fact, even if the other 250 pending cases result in convictions, that still only brings the conviction rate to 10 per cent. Unsurprisingly, the seizure of the boxes has been challenged. There were two judicial reviews of Operation Rize: one by the law firm Lewis Nedas on behalf of its clients; the other on behalf of a Russian businessman, Alexander Temerko, who had fled Russia because his former boss Mikhail Khodorkovsky, head of Yukos Oil and once Russia's richest man, had been jailed by Putin for eight years. In both cases, the police settled and returned the property before the judicial reviews finished going through the courts. 'They didn't want their warrants being questioned,' says one of the lawyers.

Most of the safe deposit customers have had to deal with, at best, endless bureaucracy: finding receipts for inherited jewellery and justifying cash. One family had to get its diamonds analysed to prove that they had been cut before 1939. 'The police wanted them to prove their story that they'd been smuggled out of Germany. It cost a great deal of money,' explains Mark Richards, also with Appleton Richardson & Co.

In many cases, once the police had admitted the loot was not the proceeds of crime, they handed it over to the Inland Revenue. 'The second phase was all about money going to the Revenue. They were begging us to get our clients to let them keep the money and set it off against tax,' says Egan. 'We said if they wanted a loan, they could pay us five per cent. The Revenue opened an account so that clients could transfer money from their box directly to the Revenue. Sometimes the Met got heavy and said that if our clients didn't hand over the money they would prosecute.' In many cases, the Revenue is keeping the money on the grounds not only that tax is due on it, but also that the cash's owners must have been dodging taxes for years. 'They were told they'd just been unlucky getting caught this time,' says a lawyer. '£13 million has been returned to the public purse,' says Ponting. When contacted, the Revenue refused to comment. However, it denied that its officers were on a percentage incentive scheme for cash collection, although it did admit that successful officers get bonuses.

At worst, the cases deteriorated into serious intimidation. One man, an estate agent who does not wish to be named, was arrested after the police discovered £141,000 in cash in his box: it had been given to him on his wedding day by his great-aunt, who had escaped Germany in 1940 with diamonds sewn into her clothes. She converted the money into cash in the UK. 'It was the family running-away fund; she gave it to me as I was the eldest son. I never thought of it as my money. It just sat in the box. After what happened to the Jewish people, my grandfather told me to save it for a rainy day,' he says.

The police, however, arrested his brother-in-law, who was also his business partner. They raided his home, threatened to arrest his wife and forbade his brother-in-law to speak to him. 'They tried to say I had been ripping off home-owners,' he says. 'They couldn't understand why the money wasn't in a bank account.' The police failed to make any allowances for the fact that the raids happened at the height of the financial crisis: the banking system was going into meltdown, interest rates were below one per cent. Northern Rock had collapsed the previous year, and Bradford & Bingley was on the point of bankruptcy. After two years, the police - finally admitting his money wasn't the proceeds of crime - promptly handed it over to the Revenue, but £1,200 was missing. 'The Revenue wrote to say it had received £139,800.20. I had all these documents from the police saying £141,000. I rang them to ask what was going on, and they said that they had never checked the money.' He's yet to get his cash back from the Revenue, which is now interested in whether his great- aunt paid duty on the diamonds she saved from the Nazis.

Another Jewish depositor described how a 'large gold cocktail ring and a baby's bracelet' had been missing when her property was returned to her, as well as £8,000 in cash. But when the police showed her a film to prove their innocence, she says, the tape was doctored: 'The film was cut, and then was taken from another camera angle, and the time code was missing on the second tape.' Another North London goldsmith claims that £10,000 and his wife's diamond earrings were missing. 'None of the complaints have ever been upheld,' says Ponting.

Nor have any of those who have received their property back ever been offered compensation for legal and accountancy fees. 'They can make claims through the courts. It's catered for in legislation,' says Ponting. Yet neither their lawyers nor the box owners seem aware of this. As of last month, the three directors of Safe Deposit Centres Ltd have been sentenced, yet the firearm that Woolf was also convicted of possessing was in one of the boxes, rather than his own. The counterfeit $60,000 Sieff was convicted of holding was the result of a crime perpetrated against him in 1996. A client changed the money at their bureau de change and when Sieff dis-covered it was fake, he put it into the company safe deposit box and left it there.

Ponting claims the police had identified the company as 'a criminal enabler', yet the results belie that, with only 0.5 per cent of the boxes being so far linked to crime. Many of the lawyers and accountants involved seem to think that Rize was just a revenue-raising operation. 'The minutes of Operation Rize look like a business meeting,' says one.

There are those who claim Rize must have made a loss, with all the officers and overtime, but Ponting says the cost so far is only £10 million, including the investigations that have arisen from Rize: 'A huge amount of money we confiscated was linked to tax evasion,' he says. Interestingly, the Met is allowed to keep between 18 per cent and 50 per cent of the cash it seizes, depending on the circumstances. 'It's how the Met are going to pay for the policing of the Olympics,' claims another lawyer. ES

Operation Rize - the inside story on the Met's biggest-ever sting

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