Ex-Islander’s confiscation order debt hits £64 million

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A FORMER Islander who is said to owe the UK government £64 million has failed to secure money from two well-known London property tycoons in an attempt to pay off his debt.

Gerald Smith was jailed for eight years in 2006 after committing a £35 million fraud

Gerald Smith, who once owned Jersey-registered company ORB, was sentenced to eight years in prison in 2006 after committing a £35 million fraud. He was also given a confiscation order of £41 million, which has now risen to £64 million owing to interest.

More than ten years after being sentenced, Mr Smith is still yet to settle his debt and has triggered another legal battle which is understood so far to have cost tens of millions of pounds. Mr Smith faces a further eight years in prison if he fails to pay the debt.

According to the London Evening Standard, the Serious Fraud Office is now seeking a receivership order to deal with the bankrupt businessman’s affairs and claims that he still owns a number of assets, including two £5 million villas in Majorca and a £12 million Jersey property, where Dr Gail Cochrane, his former wife, is said to live.

Dr Cochrane was last year declared en désastre by Jersey’s Royal Court.

During the latest hearing at the Royal Courts of Justice, Mr Smith claimed that he was unable to pay as, he said, he had had money stolen from him by his former business partner and ex-director of the Lotus Formula One team, Andy Ruhan. He claimed that Mr Ruhan had channelled the money into a company to fund half of a residential development in London’s Kensington Gardens.

The other half of the scheme was controlled by Christian and Nick Candy, said to be the UK’s 52nd most wealthy property developers. After the scheme’s properties were sold, the project generated an overall profit of £230 million.

In an effort to clear his debt, Mr Smith is said to have told the court that the proceeds of the sale should be frozen so that he could reclaim his alleged share. However, this was rejected after the judge, Mr Justice Popplewell, said that he was not to be trusted and had no right to the money. He also expressed his surprise at Mr Smith’s attempt to have the Candy brothers’ assets frozen without telling them.

He said: ‘You are asking me to make an order against assets in the Candy brothers’ hands and you did not think the Candy brothers would have something to say about it.’

The judge also said that there was ‘a severe risk that unless the receivership order is made, the assets will be dissipated or reduced’ and would become ‘unavailable to meet the confiscation order’.

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