Fraudster who owes £76m faces jail for holiday


A notorious fraudster who circled the globe when he owed taxpayers tens of millions of pounds faces further jail time after using secret accounts to pay for ‘extravagant’ parties and meals at top restaurants from London and even more flights.

Gerald Smith, who owes £76million in an unpaid forfeiture order, spent the money on meals at Scott’s in Mayfair, near Zoilo, and Pollen Street Social in Soho. One meal would have cost £1,000 and another £700.

He also went drinking at Claridge’s, pulled out hundreds of pounds of cash and paid for more fights in what a court heard were “disproportionately lavish lifestyle payouts”.

The expenditure took place even though he had been barred by a judge from disposing of any assets while his multi-million pound debt remains unpaid. He now faces up to two years in prison for breaking that order.

The new revelations came during a High Court hearing where prosecuting barrister Kennedy Talbot QC explained how the Serious Fraud Office discovered Smith was running three secret accounts to continue his high lifestyle in the West End.

He said spending on the first two accounts, at internet banks Revolut and Starling, included “payments made for fine meals at Michelin-starred restaurants such as Pollen Street Social”, as well as £240 at Claridge’s bar, more than £1,350 on flights. , plus £3,258 on other “payments to bars and restaurants”.

Mr Talbot said a third secret account had also recently been discovered of Pockit prepaid currency which Smith had used to spend “substantial amounts” on “quite extravagant” items.

No details were given in court as the hearing was adjourned for the account to be further investigated.

But it is understood the expenses shown include a £1,000 lunch at Scott’s in Mayfair and a £700 meal at nearby Argentinian restaurant Zoilo.

Smith, 66, told the judge he admitted breaching court orders and will learn his fate at a rehearing later this year once the full extent of his breach of court orders is resolved. of the court will have been established.

The new jail threat against Smith is the latest twist in a long saga that has spanned more than a decade that has seen him dodge authorities’ attempts to recoup his multi-million pound criminal profits.

It all started in 2006 when Smith, a former GP who had previously served a prison sentence in 1993 for theft from a pension fund, was again convicted of defrauding a software company of £35million. .

He was jailed for eight years and ordered the following year to repay just under £41million in a confiscation order with the threat of a further eight years in prison for non-payment.

But he didn’t pay despite a high lifestyle involving hundreds of flights around the world and extravagant purchases of art and other luxuries.

A court heard three years ago, for example, how Smith flew to Dubai, Hong Kong, Buenos Aires, Vancouver and the Maldives and stayed in high-end hotels.

He also took 105 private jet trips in a single year and flown dozens of flights to European destinations, including Nice, Majorca, Vienna and Zurich, in what prosecutors described as “extravagant travel and vacation expenses.” ” in a display of “extraordinary debauchery”. Its overall debt then stood at £66m due to interest payments, but had risen to nearly £73m by the time of a separate High Court hearing last year held to sort out its business affairs.

It was told how Smith also dabbled in fine art, trying to buy works by Renoir, Matisse and Rodin and successfully buying a glass sculpture by American artist Dale Chihuly, whose eye-catching works have exhibited at Kew Gardens.

Despite these revelations, Smith managed to persuade Mr Justice Foxton, the High Court judge in the case, that he is too poor to pay the full amount he owes the taxpayers and that he should be entitled to a certificate of insufficiency erasing a large part of its debt. .

In a ruling on a case, however, the judge also explained how Smith managed to fund his high lifestyle while claiming he had no money of his own.

He said the deception was made by portraying his estranged wife, Dr Gail Cochrane, as the owner of a ‘vast network of businesses’ engaged in ‘a complex web of dealings’ – even though she describes herself as a “busy generalist with two young daughters” with “minimal knowledge of Smith’s business activities”.

The judge added: “Although nominally without assets, Dr. Smith was able to live ‘high on the pig’ (in his own words) on assets nominally held by Dr. Cochrane, spending those assets in accordance with Dr. Smith.

The judge said purchases made with his ex-wife’s supposed money included “a water clock commissioned and works of art chosen by Dr. Smith” and “private jet travel, much of which involved that Dr Smith was traveling alone”.

Previous examples included the purchase of a ski lodge “through a company vehicle of which Dr Cochrane was a director and the transfer of his luxury car collection to Dr Cochrane’s name” shortly thereafter the discovery of the computer company fraud for which he was convicted in 2006. .

The judge’s decision also gave prosecutors the green light to pursue Smith’s assets, including a missing Porsche chased from a London car park and £367,000 spent on wine.

Other expenses that could be targeted in an attempt to recoup his illicit profits include £500,000 paid to a London dating agency and his boss and nearly £1.5million that Smith spent on other cars, including another Porsche, a Bentley Continental, an Aston Martin, two Range Rovers, four Mercedes and four BMWs.

Other lavish expenses by Smith detailed in court documents include £300,000 paid to a London consultant who founded Europe’s largest fertility clinic, more than £200,000 donated to a south-south hunting reserve society Africa, £359,000 for chandeliers made by American artist Dale Chihuly and a further £434,000 for the unfinished purchase of his glass sculpture ‘The Sun’.

Separate court proceedings to determine how much of Smith’s forfeiture order should be overturned have yet to take place.

A potential additional prison sentence for non-payment of anything that remains unpaid could still be handed down.


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