Stephens was skeptical about most of Josef's story and had no doubt that Josef "came over here as an active and willing spy for the Germans".
The day previously, Lt. G.F. Sampson and 2nd Lt. T.L. Winn had questioned Jakobs about his knowledge of another spy being trained in Hamburg. Based on the description provided to Josef by MI5, Josef thought the man might be identical with a spy named Karel Richter.
As it turned out, the description of the man had been provided to double-agent TATE (Wulf Schmidt) by the German Abwehr. TATE needed money, and this spy would soon bring him what he needed. MI5 was excited... they had another spy in their sights... and thanks to Josef, they had a name to go with the description. But Stephens was dismissive of Josef's usefulness.
"It may be that [Josef] thinks he is gaining our confidence, and so long as he remains under that preposterous illusion we are likely to get further information from him from time to time. I do not, however, think it is a case which should be unduly postponed in so far as action under the Treachery Act is concerned".
Three weeks later, however, Stephens would change his tune when Richter proved to be a very tough nut to crack.