Gerald Smith was sentenced to six years in prison in 2006 after committing a £35 million fraud by illegally obtaining money from an IT company.
Around the same time, he was handed a confiscation order to pay a total of £41 million to the UK government, but after accruing interest that amount rose to £72 million.
Smith claimed he was unable to pay the debt and, earlier this year, had some of it written off after the Serious Fraud Office accepted that he would fall around £30 million short.
In response to his assertions that he would be unable to pay the money, the SFO published a schedule of what they said were assets obtained by the fraudster through accounts they alleged were linked to him. The agency is now working to seize them.
A judgment, published by UK High Court Judge Mr Justice Foxton, has revealed that Smith was able to live a luxurious lifestyle while making it appear he had no assets by transferring them to Dr Gail Cochrane, a practising GP.
‘Although notionally assetless, Dr Smith has been able to live “high on the hog” (in his own phrase) off assets notionally owned by Dr Cochrane, spending those assets in accordance with Dr Smith’s idiosyncratic tastes (including a commissioned water clock and artwork chosen by Dr Smith) or for his personal benefit (for example on private jet travel, much of which involved Dr Smith travelling alone). While I accept that much of the money spent by Dr Smith belonged to others, the freedom with which he dissipated assets notionally in Dr Cochrane’s ownership is relevant when considering whether such interest as Dr Cochrane had in those assets was held in her own right, or as Dr Smith’s nominee,’ the judgment says.
‘Dr Cochrane has on a number of occasions proclaimed that she is a “busy GP with two young daughters and no real business experience”, with minimal knowledge of Dr Smith’s business activities. Dr Smith has himself accepted that Dr Cochrane lacked “any independent experience of the world of business, the world of property deals”. The vast network of companies which she apparently owns, and the complex web of dealings in which those companies have engaged, strongly support the suggestion that her involvement is nothing more than as a cipher, and that Dr Smith – with his extensive track-record of complex, contrived and dishonest business dealings – is “calling the shots”.’
In the judgment Mr Foxton added that it was clear that, since the issuing of the confiscation order, Smith had acted to make it appear as if he had no assets and had ‘every incentive’ to hide them behind Dr Cochrane who he ‘could trust to follow his directions’.
Emma Luxton, head of the Proceeds of Crime and International Assistance Division at the SFO, said: ‘Gerald Smith is a seasoned and sophisticated criminal who has twice been convicted of multi-million-pound theft.
‘We refuse to allow his machinations to prevent us from pursuing and recovering the proceeds of his crime. This extraordinarily complex case is emblematic of our tirelessness in chasing, tracing and recovering the proceeds of crime.’
Among some of the assets which the Serious Fraud Office claim were bought by Smith through allegedly linked accounts are a Bentley Continental worth £95,029, as well as a Porsche Panamera and a V8 Aston Martin, collectively worth £174,794. A Mercedes-Benz SLR and an A180 of the same brand sold together by Jacksons for £263,995 are also referenced. It also lists an alleged £60,029 payment to an individual for the registration number ‘J88’.
The schedule also claimed that £359,000 was spent on chandeliers crafted by renowned glass sculptor Dale Chihuly, £375,000 on wine between July 2014 and May 2015 and €1.24 million on a house in Mallorca.
In 2018, the SFO revealed Smith had used private jets to fly from Jersey to 15 different destinations, took three one-way commercial flights to Dubai costing £101,377, alongside 360 flights in the previous five years to destinations including Vancouver, Toronto, Buenos Aires and the Maldives.
He also flew between Jersey and Gatwick on 46 occasions in 2013 within approximately nine months.
A further High Court hearing is due to take place to set out exactly how much Smith will need to pay back. He could be sent back to prison if he fails to comply.