A savings and retirement business is fighting for a share of the liquidated assets of a Jersey fraudster imprisoned for stealing £34m from a software company.
In 2002, former doctor Gerald Smith purchased a 30% share in Izodia through his Jersey-based property business, the Orb Group.
He subsequently exerted control and moved Izodia’s cash asset from the Reading Branch of the Royal Bank of Scotland to Jersey. Smith then stole £34m of that money.
In 2006, Smith was found guilty of misappropriation and false accounting. He was sentenced to eight years in jail. Then, in 2007, he was ordered to pay a confiscation order of £41m - the “largest order to be made in criminal proceedings” at the time, according to the UK’s Serious Fraud Office. He has yet to repay this money and it is estimated that, due to interest, he owed upwards of £72m in 2021.
After Smith was released from prison, a different company he controlled went on to sue his former business partner Andrew Ruhan in 2016. Funding for these proceedings were provided by Harbour Litigation Funding, who then found themselves owed both money and assets by Smith. In June 2021, a High Court order found that Harbour was indeed entitled to these payments.
Pictured: Phoenix Group Ltd, a savings and retirement buisness, is fighting for it's share of Gerald Smith's liquidated assets.
However, Law360 reports that Phoenix Group Ltd, a savings and retirement business, has challenged this ruling, telling the Court of Appeal that it is entitled to receive payments on the basis of an agreement between Phoenix and Smith’s ex-wife Gail Cochrane. Cochrane, who was in control of Smith’s wealth from 2014, had reportedly made an agreement with Phoenix that any surplus from the selling off of assets should go to Phoenix.
This argument was put before the Court of Appeal by Sebastian Kokelaar, Phoenix’s representative. Harbour, by contrast, has argued the agreement in question is invalid as it supposedly lacked the correct legal language.
The appeal was due to continue last Thursday.
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