AND THE LEADERS OF THE WORLD – A PHILATELIC
by Brian Cannon
processing by Amanda Levecque
Although this article is written based on the legal proceedings initiated
by the government of Tuvalu, stamps of other countries were also involved,
including Gibraltar, the Republic of Kiribati, Saint Kitts-Nevis, Saint Vincent
and the Grenadines, Montserrat, the Virgin Islands, and St. Lucia.
Tuvalu Philatelic Bureau was established in December 1975, shortly after legal
separation of the Ellice Islands from the Gilbert and Ellice Islands Colony, which occurred two months
earlier. The first postage stamps of the new colony, renamed to Tuvalu, were to
be released on January 1st, 1976. This was the date that full
administrative autonomy would be transferred to the capital, Funafuti.
Earlier in 1975, a British firm
called Philatelists Limited approached the soon-to-be administrators of the new
colony and were able to secure a contractual agreement whereby they would
undertake the management of the Bureau and help with stamp subject issues. This firm already had a similar contract with
the government of St. Vincent in the West Indies, which was a successful
venture at the time.
Philatelists Limited had been
aggressively approaching smaller countries with the offer of establishing a
philatelic service, complete with staff training and recommendation on “wise”
policies, recommended stamp issues, and staff training. For this service the
company might typically receive 25% of the gross sales or ask a 20%
shareholding in a Government Controlled Limited Liability Company specifically
set up to run a Bureau on commercial lines. The only additional charge was in
respect of the salary, travel and accommodation expenses of a trained Bureau
Manager whom they could provide. Philatelists Ltd. could provide all capital
required to set up and equip a Bureau and then be reimbursed as a first charge
on subsequent profits.
In 1976, printing of Tuvalu’s
stamps was contracted out to the Crown Agents of London, responsible for
similar tasks for many other colonies for well over 100 years. However, with
the first stamp issue in 1977, Philatelists Limited also took over control of
the designing and printing of all issues. In effect, they gained complete
control of the production of Tuvaluan postage stamps, once a new issue had been
approved by the Tuvalu Stamp Advisory Committee. No doubt they had considerable influence on
the stamp subjects, especially given the obvious lack of philatelic knowledge
by the government of the new colony of Tuvalu.
In 1980, the firm’s name was
changed to Philatelists (1980) Limited, under the control of Ronald Grover of
On December 19, 1983, Tuvalu undertook
a contract with Philatelic Ltd. and Philatelist Caribbean Ltd. and those
companies acquired the rights to produce and distribute Tuvalu stamps.
Participating in the program for the series, Leaders of the World (LOW), Tuvalu
released Locomotives, Part 1, on February 29, 1984. This issue consisted of 4
values, see tenant (8 stamps) and during that year alone a total of 24 sets
consisting of 246 stamps were issued in the LOW programme.
Dates of contracts and their details are not known.
On January 15, 1987, receivers were appointed at Philatelist
which were thought to have £20 million of LOW unsold
stock. Issue No. 13 of this magazine
reported the Tuvalu Government appointed a UK solicitor to purchase and dispose
of all stock of Tuvalu stamps and that printers were paid directly for these.
Format International Security Printers, Ltd. was also in financial difficulties
through their association with the LOW issues and Clive Feigenbaum acquired 60% of the shares.
Also in January 1987 the London
and New York International Stamp Company Ltd. (LYNI) and Philatelic
Distribution Corporation Ltd. (PDC) paid £300,000 for the right to reprint
certain stamps whether reprinting was subject to the Tuvalu Government giving
consent is not certain.
The Government of Tuvalu entered
into a contract with Philatelic Distribution Corporation Ltd. (PDC) in June
1987. PDC under a further agreement purchased from the Tuvalu government some
16 million stamps for £65,000. Over 2 million were alleged to be flawed.
A further contract, which was to
give rise to litigation, was made on the 17th of October 1987
between PDC and Tuvalu. Tuvalu gave PDC strictly defined rights to design,
produce, sell and distribute thematic stamps for Tuvalu and its Islands.
Clauses in this contract required stamps to be produced “under the supervision
of PDC by a security printers acceptable to the
government” and required PDC to “uphold the integrity of the Government”. PDC
used the printers, Format International Security Printers, Ltd.
By March 1988,
the Tuvalu Government suspected this contract was being breached. They were
concerned about advertisements which offered flawed Tuvalu stamps. During a
series of communications with Clive Feigenbaum at
PDC, Tuvalu were misled about the relationship between PDC and Format; nor were
they informed that Format had been instructed to print a substantial quantity
of flawed stamps. Instead,
was told that Format were extremely reliable and made
every effort to minimize the risk of errors during printing. However, the
Tuvalu Government made it clear that Format were not to be used as printers but
PDC continued to give orders to Format.
On the 3rd of March, the Tuvalu Government terminated the contract of the 7th of
October, 1987. They also sought and were granted injunctions restraining any
production or dealing in material bearing the name of Tuvalu or the use of
printing materials. The ‘ordered material’ were described as:
any stamps or other articles of Philately and all plates dies artwork materials
and other goods….bearing the name of Tuvalu or any of its islands and produced
by or for or at the direction or at the direction of any of the Defendants.”
this order were agreed. March 7th, Mr. Fred Hughes, on behalf of
Format, undertook not to use any ordered materials including a number of plates
locked away on their premises. On April 25th, Mr. Roger Apsey, stock controller of PDC, Mr. Allan Hayward,
financial adviser and controller of the group of companies, Mr. Clive Feigenbaum and LYNI undertook not to dispose of or remove
or tamper with ordered materials with the exception of certain authorized and
unflawed stamps. Feigenbaum stressed the losses that
might be made without these variations. (For example, LYNI would suffer a loss
of £465,ooo and be liable to pay compensation to its
Meanwhile, on the
18th of April, an employee of PDC gave an order to Format to print
Tuvalu stamps and Format complied. In accordance with the then existing
arrangements with PDC, Format was required to print approximately 21,000 sets
of unflawed stamps and 14,000 sets of flawed stamps, a total order of almost 4
million stamps with a rough value of £2 million. This was essentially a repeat
of an order made prior to any court proceedings. In addition, the marketing
manager of Philatelic Collections, Ltd. had placed an order for album pages for
Tuvalu stamps. Breaches continued until the beginning of May, 1989.
On April 27 1988,
Scotland Yard Fraud Squad together with officers of the Gibraltar Fraud Squad
executed a search warrant at Format’s premises where Detective Constable Faulds saw a substantial quantity of Tuvalu stamps which
had just been printed. On May 14th, they removed thousands of stamps
bearing the name of Tuvalu as well as other material.
In July, 1989,
Mr. Feigenbaum, as Chairman and Managing Director of
PDC was held guilty of contempt of the court in breaching the order made on 3
March, 1989 and was committed to prison for three months and fined £3,000. F.
Hughes, Managing Director of Format and Roger Apsey,
Stock Controller of PDC, were given suspended sentences and fines of £750. They
were ordered to pay costs on an indemnity basis.
Clive Feigenbaum appealed and on the 20th of October,
1989, the Judge of the Court of Appeal “felt the imposition of a prison
sentence a very grave punishment’ in view of Mr. Feigenbaum’s ‘good record and character’. The sentence of three months imprisonment was
quashed and there was not order for costs.
The Philatelic Exporter, Editor and Publisher Graham R.
Phillips, June 1992, Pg. 4-5
As a result of Scotland Yard’s
investigation, eight members of the Philatelic trade were arraigned at Bow
Street Magistrate’s Court on November 28, 1990. On June 12, 1991 they were
committed on bail to stand trial. That trial began April 27, 1992 at Southward
Six companies involved
The defendants are involved with
the following companies:
- Format International Security Printers,
founded and run by Peeling and Hughes, until Feigenbaum took it over and employed Wallen in March 1989
- Philatelists Ltd, the philatelic
agents established by Grover which went into liquidation
- Philatelic Distribution Corporation
Ltd. (PDC), which succeeded Philatelists Ltd as agents, the principals
of which were Feigenbaum, Lagerwaard,
and Wallen before he was moved to Format
- Urch Harris & Co. Ltd. (UH), owned
by Feigenbaum’s family was to have been the
principal retail outlet for the ‘errors’. Also involved were Lagerwaard Grover, and Pillinger
- London and New York International
Stamp Company Ltd. (LNYI) also owned by Feigenbaum’s family, was another outlet for the bogus stamps
- Casco Ltd. (later Caphco Ltd. after privatization), of which John Smith was managing director,
philatelic agents to Commonwealth countries.
The trial began on April 27 at Southwark Crown Court (London) of eight men charged with
fraud and conspiracy concerning the alleged production of certain issues of
Commonwealth countries’ postage stamps during the mid to late 1890s. Had the
fraud been allowed to succeed, the prosecution, led by Mr. Michael Worsley QC, alleges the millions of pounds would have been
involved. The errors included missing colours,
misplaced watermarks, imports, etc and were to have been gradually sold to the
public as ‘rarities’.
The start of the case was delayed
whilst the 18 barristers and their reams of paper were found room in the
crowded court. The trial is expected to last three or four months.
The Defendants and the Charges
- Clive Feigenbaum (51), Mount Park Road, Harrow-on-Hill, Middlesex: one charge of fraudulent
trading, three of conspiring to use a false instrument, and three of
conspiracy to defraud.
- Ronald Grover (56), Lodge Road, Beulieu, Hampshire: one charge of aiding and abetting
fraudulent trading, one of conspiring to use a false instrument, and one
of conspiring to defraud.
- Frederick Hughes (69), Downs Road,
Thornton Heath, Surrey: one charge of fraudulent trading, two of
conspiring to use a false instrument, and two of conspiring to defraud.
- Aart Lagerwaard (44), Cranberry Close, Marchwood, Southampton:
one charge of aiding and abetting fraudulent trading, two of conspiring to
use false instrument, and two of conspiring to defraud.
- William Peeling (69), Northdown Road, Woldingham,
Surrey: one charge of fraudulent trading.
- Brian Pillinger (51), Over Lane, Over Almondsbury, Bristol.
- John Smith (38), Canford Gardens, New Malden, Surrey.
- Ronald Walden (44), Allington Lane, West End, Southampton.
Each of the last thee named face
one charge of aiding and abetting fraudulent trading, one of conspiring to use
a false instrument, and one of conspiring to defraud.
The offences are alleged to have
taken place on dates between October 1 1985 and July 29 1989.
Peeling has admitted his one
charge and will be sentenced at the end of the trial.
The others have pleaded not
guilty to all charges.
Outlining the prosecution’s case
against the defendants, Mr. Worsley told the jury
that it concerned the deliberate production of postage stamps with errors which
were then sold to collectors who believed they were rare examples which had
occurred by accident.
He said that the defendants were
some of the principal people concerned, and that a number of other people were
involved, some guiltily and some innocently, but so many that a courtroom would
not be big enough to hold them. The Crown had limited the number they charged
and endeavored to put in the dock those principally involved at the top of the
“Bogus stamps were printed
wholesale” Mr. Worsley said, “It was an Alice in
Wonderland situation that checkers in a security printers who were supposed to
be checking stamps were being employed and paid to make sure the errors
occurred. It is a Cloud Cuckooland situation”.
The stamps, referred to as
‘funnies’ and ‘Mickey Mouse stamps’’, included Andrew and Sarah’s wedding and
the Queen’s 60th birthday. Others included a St. Vincent tennis
stamp with a missing ball; the actual printing plate of which had been found at
Mr. Worsley said it was quite inconceivable that the colonial governments had ordered such
errors, as had been claimed by the defendants. The bogus stamps had been
ordered by the agencies, he stated.
The first of a series of police
raids took place in April 1989 when Format’s premises at Camberwell were searched and a stack of about 44,000 St. Lucia stamps with misperfs and missing colours was
discovered, which Hughes said were awaiting destruction. But another employee
told police they were being sent to PDC. Hughes was arrested later that day and
on being interviewed he told police he was merely following the system adopted
by Peeling, whom he had replaced at Format.
On May 9 1989 it is alleged that
a special meeting chaired by Feigenbaum, described by
the prosecution as the “prime mover” in the fraud, took place at Urch Harris. After this meeting important documents were
shredded and following a police raid on a south London warehouse 91 boxes of
stamps were also shredded.
On May 10, police visited Caphco in Sutton and arrested John Smith. On being shown a
quantity of Pitcairn Is stamps with inverted watermarks he is claimed to have
accepted that they were deliberately produced to promote the interests of the
islands but were sold at face value, mainly to Urch Harris, to boost the shrinking collector market.
In February 1990 property was
seized by police from urch Harris and Philatelic
Distribution Corporation, and a large quantity of stamps was found at LNY’s warehouse in Stratford, east London. Feigenbaum was arrested at his home, where bogus stamps
were found in his study. He said LNY was owned by his family, UH was a
subsidiary with no other shareholders, and he was the managing director of PDC.
“Right at the center of the group
of related people and companies was Mr. Feigenbaum in
a position of control. Wherever you look you find him - something more than a
coincidence” Mr. Worsley told the court.
On May 3 1990 Wallen was arrested and said he was the stamp production manager at PDC firstly under Lagerwaard and then Feigenbaum.
He transferred to Format in March 1989. The same day Grover and Lagerwaard were arrested. The latter said he worked in
various capacities at UH and philatelists, and became a director of UH in 1987.
He also said “specials” were created to boost sales.
“Errors to order”
The first prosecution witness to
be called was William Peeling, who had earlier pleaded guilty to one charge of
70 year old Peeling described himself
as a craftsman, having worked in stamp production since he was 14. He had set
up Format in 1969 with three others, all directors and equal shareholders,
including Hughes one of the defendants. In April 1988, he told the Court, he
was summoned to the director’s office by Hughes who told him his services were
no longer needed and that Hughes was replacing him as managing director. He
added angrily that he left the company instantly and that he was forced to sell
his shareholding in Format and another company he had helped to found, Caldew Colour Plates, to Feigenbaum.
“We did nothing unless it was
ordered” he said referring to the flawed stamps, which were passed to
Philatelists and then PDC. He recalled working with Grover at Philatelists
producing stamps for islands with “so many weird names”. His first meeting with Feigenbaum was in March 1987 when the latter became
owner of PDC.
On his second day in the witness
box Peeling told the Court of the “burden” that the deliberately produced
errors had become to his two companies. Format and Caldew,
saying “I felt it was wrong, it was obviously wrong, I kept those feeling to
myself.” Whenever printing contracts were placed by Philatelists and PDC
deliberate variations were always ordered, but on the rare occasions when
Format dealt directly with a postal administration no such mistakes were asked
In 1985 Format got into financial
problems because of the collapse of Philatelists. A promised ₤100,000
from Feigenbaum to relieve the pressure never materialized,
and by the time Peeling left the company in 1987 its finances were in a poor
state, although it was waiting for a ₤900,000 payment from an unconnected
Cross examined by counsel for Lagerwaard, Peeling said that as the main person who dealt
with Format’s clients, he had the impression that both Feigenbaum and Grover were dynamic and convincing”.
In 1983 when Format’s
relationship with Philatelists first began Peeling was shown a contract which
gave him the impression that Grover had a license to print varieties.
Early in 1987 Peeling said he saw
a contract between Feigenbaum and Grover to “satisfy
he had purchased the rights from Mr. Grover to reprint. It contained exclusion
clauses from overseas countries saying there should never be a reprint.”
“It did disturb me that my
reaction was not to refuse. I must have had a blank at the time”. He added.
As we closed for press (May 11),
Peeling completed his fifth day in the witness box. The case continues.
From The Philatelic Exporter, Editor and Publisher Graham R. Phillips,
July 1992, Pg. 3
“Deliberate Errors” trial
Southwark Crown Court has been hearing further prosecution evidence in the “deliberate
errors” stamp fraud trial which began on April 27. In last month’s Exporter William Peeling’s evidence was reported.
Con. Ronald Faulds, Scotland Fraud Squad, told of
interviews with Frederick Hughes, in which Hughes had described how Format’s
financial situation had deteriorated following the collapse of Philatelists
Ltd., the takeover by Feigenbaum, and the loss of
some business because of previous Fraud Squad investigations. Hughes said he
was reduced to “Jack if everything” and that Format was continually kept short
of money by Feigenbaum. Eventually, in mid-1989,
Format was forced into liquidation with debts of ₤270,000. Because of the
inter-relationship between several of the companies involved, Feigenbaum, owner of Format, was also the main creditor of
“No one supported Feigenbaum”
Evidence given in an interview by Aart Lagewaard was read to
the Court, which hears of “violent and heated arguments”, and punches and tea
being thrown by Lagerwaard at Feigenbaum when the former, at the time managing director of Philatelic Distribution, had
discovered that errors were being deliberately printed and distributed through
PDC and another Feigenbaum company, Urch Harris.
Lagerwaard had warned the Tuvalu postal administration that deliberate errors and
varieties were being produced contrary to the terms of their contract. He had
threatened to go to the police and had consulted solicitors because he was
“alarmed at what was going on”. He further stated that no one at PDC supported Feigenbaum but as they had to pay their mortgages, apathy
forced them to accept “misleading the public”.
Lagerwaard had joined PDC as managing director in February 1987, having been with
Philatelists Ltd. since January 1984. When Philatelists crashed PDC was formed
by Feigenbaum to take over its stamp agency
contracts. Lagerwaard said he had wanted to stay on
to gather information. Eventually in January 1988, he left PDC because “he was
not to be trusted”.
Even though PDC was a successful
operation it was constantly short of funds because “Feigenbaum was always in need of ready cash…money was siphoned off”. Sometimes, Lagerwaard stated, he had to pay bills out of his own
pocket because PDC cheques kept bouncing.
During his time at Philatelists,
under Ronald Grover, progressive proofs of St. Vincent Locomotives were sold to
the public at highly inflated prices because “only 250 were printed”. Infact 3000 had been sold.
arrested at the same time as Lagerwaard in May 1990,
said in an interview with the police that inverts of the Queen’s 60th birthday had been produced. He told officers that Feigenbaum was a brow-beating chairman who had announced that “it’s about time we had a
When we closed for press the
prosecution continued to present its case. The trial is expected to last for
several more weeks.
From The Philatelic Exporter, Editor and Publisher Graham R. Phillips,
August 1991, Pg. 3
EIGHT CLEARED OF “DELIBERATE
The eight men charged with various
offences relating to deliberately produced stamp errors and varieties have been
cleared of all charges.
The trial at Southwark Crown Court, London, which has begun on April 27, ended on July 16 when Clive Feigenbaum was acquitted of one charge of fraudulent
On June 30, six other defendants
- Ronald Grover, Frederick Hughes, Aart Lagerwaard, Brian Pillinger, John
Smith, and Ronald Wallen had been found not guilty on
the direction of Judge Eugene Cotran. All but one of
the charges against Clive Feigenbaum were dropped when no evidence was offered by the
prosecution. The eighth defendant, William Peeling, had earlier pleaded guilty
but was allowed to reverse his plea and was then also discharged after no
evidence was offered against him.
The Judge told the six acquitted
men that “You should not feel in any way that this prosecution has blotted any
of your characters”. Addressing John Smith personally, Judge Cotran said that he hoped most sincerely that he would be
reinstated in his position as head of the Crown Agents Stamp Bureau. All were
The acquittals left just Clive Feigenbaum to answer the one remaining charge of fraudulent
trading in stamps with deliberate imperfections between April 1988 and July
He told the Court that he saw
nothing wrong in what he had been doing, and still does not. He explained that
the major points concerning stamp varieties were the price and description. He
agreed with the Judge that, of course, rarity was also an important factor. A
famous stamp with an aeroplane printed upside down on
it would have been worth exactly the same whether the mistake had been
deliberate or not, he claimed. He said he never really considered whether an
error was deliberate, “either way, it frankly does not matter. It would make
exactly the same price”.
When advertising the errors and
varieties he said he had always attempted to be prudent and reasonable in the
descriptions. Some errors and varieties had been advertised without his
knowledge as genuinely rare errors.
He said he was being accused of
fraud for selling stamp varieties but varieties had existed since the very
first Penny Black.
He claimed that contracts giving
him authority to produce stamps for certain Commonwealth territories also
allowed him to produce varieties and reprints to meet collector demand. During
the trial Judge Cotran had made it clear to the jury
that the production of errors and varieties was not in itself illegal. The
offence occurred when they were sold as if produced accidentally.
Clive Feigenbaum suggested that the prosecution had confused his “open contracts” with colonial
governments, which allowed reprints and varieties, with those that the Crown
Agents negotiated with their principals, which did not. He maintained that ‘revolutions’
in the stamp trade had allowed these ‘open contacts’.
The ‘not guilty’ verdict came
after four hours deliberation by the jury members, who were gratefully and
enthusiastically thanked by Mr. Feigenbaum, who
himself had been thanked by Judge Cotran for his
“Patience with us but the verdict of the jury has vindicated your stand.”