Fraudster told to hand back £41m or spend eight more years in jail

on Wednesday 14 November 2007
in Articles

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by Simon Bowers, Paul Lashmar and Duncan Campbell

The Guardian (London)

Gerald Smith, who is serving eight years in prison for a shell company embezzlement, has been ordered to hand back £41m of stolen proceeds or face a further eight years behind bars. He has 12 months to find the cash - the largest criminal confiscation order ever handed down by the British courts - or face a sentence extension. If he fails, he will become one of Britain's longest-serving fraudsters.
Abbas Gokal, the former BCCI boss, served nine years of a 14-year sentence for his role in what was the biggest-ever banking fraud. He was released early in 2003 by the Home Office, despite failing to meet the terms of a £3m confiscation order against him. On the day he was to be formally charged two years ago, Smith failed to report to police. It emerged he was in hospital after his Audi A8 smashed into a tree in Windsor Great Park. Police found two first-class tickets to New York in a briefcase in the boot of the car. In April last year the Serious Fraud Office secured his conviction for stealing £35m from Izodia, a cash shell rump of a failed dotcom business. His Orb Group had acquired a major stake in Izodia, appointing its own directors, who in turn wired the cash to Jersey, where it disappeared. Smith had expensive properties in Jersey and overlooking the Wentworth golf course in Surrey. His lawyers offered little defence against yesterday's confiscation application, brought by the Asset Recovery Agency (ARA), for £35m plus interest. The hearing, which had been scheduled to last for three days, was over in less than a single session. About £20m worth of assets have already been seized. Since the ARA was formed in February 2003, it claims to have disrupted more than £217m worth of assets in 320 cases, recovered a further £27m of criminal assets, and increased the total amount recovered from criminals from £25m to £125m over the past four years. It was not until last year, however, that it met the target of recovering more money from criminals than its Treasury funding - recovering £15.9m against a budget of £15.5m. Last night, the Home Office minister Vernon Coaker welcomed the order, saying the ARA's aim was to double last year's target of £125m assets seized by 2009-10