The garden of British crime – how London’s jewellery district became a nursery for villains

Once the jewel in the crown for diamonds. Mastermelt Group, CC BY

In January 2016 seven men were found guilty of the “largest burglary in English legal history”. The previous April, after months of planning, the burglars had drilled their way into the Hatton Garden Safety Deposit Ltd premises at 88-90 Hatton Garden in central London. They bored a 50cm hole through the thick concrete wall surrounding the underground deposit box room and broke into 73 boxes containing valuables worth around £14m.

This was a major undertaking which required complex planning, specialist equipment, neutralising security, getting copies of the vault keys and a great deal of bravado. They might have pulled it off, had one of the robbers not made the mistake of using his own distinctive white Mercedes while casing the joint. This was recorded by CCTV and later provided Scotland Yard detectives with a vital clue to help trace the criminal gang.

For several weeks the Yard kept the suspects under surveillance as it built a case and then made a series of arrests. A portion of the loot was recovered, but two-thirds of the valuables stolen – jewellery, precious metals, precious gems, antiquities, money and much more – have not been found.

Sentencing six of the gang members, Judge Christopher Kinch QC, said their crime caused loss “on an unprecedented scale” and ranked among the worst offences of its type. John “Kenny” Collins, Danny Jones, Terry Perkins and William “Bill”‘ Lincoln were sentenced to seven years in jail. Carl Wood got six years and Hugh Doyle a suspended sentence. “Mastermind” Brian Reader is to be sentenced later due to ill health.

Old firm: the Hatton Garden gang. Clockwise from top: Collins, Jones, Perkins, Doyle, Lincoln, and Wood. Metropolitan Police/PA Wire/Press Association Images

The Hatton Garden burglars were led by Reader, 76, who was given the sobriquet “Diamond Geezer” for his dubious endeavours. Other members of the team were 75, 67 and several were in their 50s at the time of theft. The robbery may be an epitaph for the old Hatton Garden – and its mastermind a symbol of old-world crime “capers”. Reader had been a frequent face in Hatton Garden for many decades plying his criminal trade. He previously had a role in assisting in the disposal of £26m in gold from the 1983 Brinks Mat robbery at Heathrow, for which he was jailed.

As a result of the Hatton Garden Heist, interest has been revived in this part of London with a very particular trading culture. And, our research shows, the area has functioned as an enabling location for major crime for decades.

In the Hatton 'hood’

On the western border of the City of London, Hatton Garden, or “The Garden”, was until recently the world centre for jewellery, and has been home to many famous names of the precious stones and metals trade. Rows of nondescript modern and grimy Victorian buildings carry names including “Diamond House”, “Minerva House”, “The London Diamond Club” and jewellery shop signs advertise “Cash for gold”, “Krugerrands” and “valuations”.

London’s jewellery quarter. Hatton Garden London, CC BY

Hatton Garden lies between the areas of Clerkenwell, Holborn and Farringdon and the main thoroughfare, Hatton Garden proper, runs between the bustling Leather Lane to Farringdon Road. In medieval times, much of the area was open fields and gardens known as Ely Place. They were owned by the Bishops of Ely and in 1286 the then bishop built St Etheldreda’s church. Accommodation was built later for the Bishops of Ely after they attended parliament. Following the reformation, Queen Elizabeth I gave one of her favoured courtiers, Sir Christopher Hatton – “who danced with grace and had a very fine form and a very fine face” – permission to live there.

The area is full of secret places and mysterious buildings. The monks of Ely had dug tunnels around The Garden and the River Fleet was channelled into a network of underground waterways. Inside these buildings were once warrens of small rooms, rented out to jewellery makers of diverse skills. Metal doors and multiple locks protected the specialist jewellery craftsmen – but they also helped leading figures in London’s underworld keep away from the prying eyes of the law.

Jewellers gravitated to the area from the 1830s, to be near the gold refiner Johnson Matthey, or Johnson & Cock as it was known then. But the catalyst for Hatton Garden becoming the jewellery centre of the world for a century was when De Beers, the diamond mining corporation, set up headquarters nearby on Holborn Viaduct in the 1870s.

Jewish traders began moving into the area during Queen Victoria’s reign. Many had fled from pogroms in Eastern Europe and, after a few years, dominated Hatton Garden’s jewellery trade. Another wave of skilled Jewish craftsmen arrived in the 1930s fleeing from the Nazis. Hatton Garden’s strange business rituals often took place on the street or in cafes such as “The Nosherie”, a veneer-panelled establishment in Greville Street, where men in camel-hair coats inspected “pieces” of jewellery through eye glasses or shook hands on deals over salt beef on rye, while motherly waitresses refilled their coffees.

A trader in 2005 outside 88-90 Hatton Garden. Zorilla

Many dealers were orthodox and their particular frocked coats and hats, reminscent of 18th-century Vienna, were common sights on The Garden’s streets. One elderly craftsman described The Garden in the mid-20th century:

Hatton Garden before the war was a Dickensian-looking place with a patchwork of run down houses. There would be a setter in one room, a polisher in another, an engraver in another and if you opened a door sometimes a rat would run out.

There were no retail shops then – it was primarily a place of manufacture and the centre of the world’s diamond trade. Other rooms had smelters used for melting down precious metals. Shops only started to emerge in the 1960s, and into this melting pot came migrants from Eastern Europe, Italy, India and Ireland as well as the indigenous working classes of the surrounding areas.

Despite links to criminality, a considerable percentage of the Hatton Garden trade was legitimate and these traders were represented by the Hatton Garden Association. Michael Hirsch, a buyer and seller of precious metals and an authority on gold trading, was a familiar figure in Hatton Garden for 30 years:

When I first came to The Garden the diamond dealers would do their business in the street, between 12pm and 2pm each day. But of course, you can’t do that anymore. Business down here has always been based on trust. There is a Yiddish term, “muzel brocho” – my word is my bond. If someone reneged on a deal, they could never trade down here again.

Sometimes people try to fool you. Lead bars dipped in gold are a favourite. I can tell by the smell, the hardness and handling if something is not right. Early on my boss taught me: ‘First, don’t look at the gold, look at the person’s face’. That’s advice that has served me well.

A trawl through old newspaper cuttings reveals many robberies in Hatton Garden or upon commuting traders, including the murder of Hatton Garden diamond merchant, Leo Grunhut who was shot outside his Golders Green home in 1978 while carrying £250,000 in diamonds. The area was a particular target for burglars and safeblowers – in a three-month period during 1987 Hatton Garden suffered six robberies and ten burglaries.

The ‘king’ and other villains

Over the years some dealers developed a symbiotic relationship with London’s criminals. Until his death in 1991, Moshe Riyb, a legendary middleman was known as “The king of Hatton Garden”. Peter Finch, a customs officer, offered this description of Riyb’s unconventional working methods in a 1992 interview with Esquire magazine:

Moshe would arrive on the street corner at 10.30 in the morning and wander round The Garden. He had cash on him to buy anything – legal or illegal. If you needed short-term funds he could provide it; the complete Mr Fixit. People beat a path to his door. He bought anything – proceeds of robberies, smuggled gold, old lady’s heirlooms … When we raided him, we found nearly £2m of stock in all forms of gold – including fine gold bars in his tiny office in Diamond House. Even the doorstop was a big lump of silver.

Middlemen smelted stolen jewellery before passing it onto the big legitimate bullion dealers and laundering the proceeds. If caught handling stolen property Garden traders would say they bought the haul “in good faith” – which was then an adequate response to avoid prosecution. Gold once smelted cannot be easily identified – and the same goes for precious gems when removed from a stolen piece of jewellery.

Another great attraction of Hatton Garden for criminals was its cash economy. In 1994, within hours of a burglary at St James’s Palace, a Hatton Garden jeweller paid £450 for items belonging to Prince Charles worth £10,000. The jeweller contacted Scotland Yard after seeing pictures of the missing items in a newspaper.

Yet the police never took Hatton Garden seriously as a crime problem – they took the view that, when it came to financial crime, Hatton Garden was best left to HM Customs & Excise. As it was to turn out, this made sense.

The great VAT caper

By the late 1970s villains were looking for new criminal avenues to escape the combined threats posed by the security industry, armed police officers and their informants. In the 1960s and 1970s, armed robbery was lucrative – all you needed was a fast car and four tough guys, each with a balaclava and a sawn-off shotgun, and you could rob a bank a day. But by 1980 embarrassed Yard chiefs threw everything at the armed robbers and the “blaggers”, as they were known, started getting shot in the act.

There had to be an easier and safer way to make a dishonest crust. And as it happened, there was. One of the first acts of Margaret Thatcher’s new government in 1979 was to remove the VAT on gold coins – including the South African Krugerrand – while keeping VAT on gold scrap and raising the rate from 8% to 15%. This created a loophole that was soon to be exploited in one of the greatest ever frauds on the national revenue.

Krugerrand: nice little earners. Evan Bench via WIkimedia Commons, CC BY

Crooks would buy large quantities of VAT-free Krugerrands (or other gold coins) melt them down and cast them into gold scrap which in turn was then sold through secondary dealers before reaching the London market or gold jewellery manufacturers. This transaction would attract the 15% VAT, which the dealer, in league with the villains, would abscond with. In 1982 charges were said to have been laid against 19 people for a total of about £40m, but the VAT fraud is believed to have cost the excise man a great deal more – sources have estimated to us that the actual total was more like £500m.

When in 1982 the government re-imposed VAT on gold coins, the fraudster’s response was to smuggle in coins from countries where there was no or very little VAT payable and, as many Hatton Garden dealers had experience in smuggling diamonds, they were able to explain to their new ex-bank robber partners the best ways to avoid border restrictions and controls as well as providing accountants and solicitors who could help with the paperwork.

The ex-robbers quickly mastered gold smuggling before turning their new-found knowledge to cannabis and cocaine importation. Retrospectively we can see that free-market policies on gold movement provided potential drug smugglers with a skills creation scheme.

By the early 1990s, most of London’s major criminals had moved into “Persian rugs” (drugs). By the 1990s Hatton Garden’s economy, built on gold for cash, became crucial as a laundry for the drugs trade.

Last of the old-school ‘blags’

For all that Hatton Garden has sought to clean up its image as a respectable centre for the jewellery trade, serious criminality – lured by the sparkle of gems and the serious money changing hands – is never far away.

Scene of the crime. Metropolitan Police / PA Archive/Press Association Images

After the 2015 heist, police covertly recorded two of the gang, Terry Perkins and Danny Jones. Their conversation gives a flavour of the underbelly of villainy and violence that still haunts Hatton Garden. Jones relays to Perkins how a dealer was beaten up to encourage payment:

… he owes £1.7m pounds, he’s fucked a load of people out of diamonds and all that, they have got him, he went down to The Garden last week and smacked a geezer up, in one of the shops.

It’s likely that some of the robbery team may die in jail – their older ages have led some to nickname them the “grandpa gang”. But the Hatton Garden Heist is a reminder that despite the vast sums of money to be gleaned from the drug trade, from people trafficking and of course from fraud, commercial burglary will never go entirely out of date. As legendary gangster Charles “Lucky” Luciano explained: “Everybody has a little larceny in them,” and particularly for professional criminals, the lure of life-changing wealth will always merit serious consideration.