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Royal Court rules on alleged multi-million "sham" trust case

Royal Court rules on alleged multi-million

Wednesday 06 June 2018

Royal Court rules on alleged multi-million "sham" trust case

Wednesday 06 June 2018

Jersey's Royal Court has heard the case of a former local financier, and employee of the multi-millionaire St. John’s Manor occupant John Dick, who was accused of fraudulently “extracting” tens of millions from a family trust.

But Richard George de Winton Wigley, who has admitted to fabricating documents, and has since moved his business and family to Panama, is not facing criminal proceedings in the island. He denies the allegations.

recently-published Royal Court judgement contains allegations from another multi-millionaire – Vern Heinrichs – that the previously Jersey-based finance worker ran a “complex and sophisticated” operation that allowed him to take up to CAD$50million. In the end, the Court declined to fully support those allegations, but did offer directions. 

Mr Heinrichs, the former CEO of Arise Technologies, became involved with Mr Wigley through his brother-in-law, and property development partner, fellow Canadian John Dick, the Seigneur of St. John.

The Court heard that Mr Wigley worked for La Hougue Boëte, a company named after the £22million Jersey manor Mr Dick lives in, and which Mr Heinrichs believed to be owned by Mr Dick. The company later became trustee of ‘The 1977 Brazilian Trust’ - a valuable collection of at least six companies and a pearl necklace.

st john manor

Pictured: La Hougue Boëte, Mr Dick's company for which Mr Wigley worked, was based at St. John's Manor.

Documents discovered in the company’s former headquarters, St. John’s Manor, which is currently up for sale, showed that another trust by the same name was set up in 1984 – seemingly overriding the previous one – apparently for the benefit of Cancer Research and the British Heart Foundation.

But there was no documentation of what assets formed part of this trust. Moreover, the Court heard that there was evidence that this trust was a “sham” actually created in 1995 in order to move beneficial ownership of the assets away from the Heinrichs family – and towards Mr Wigley.

Numerous trustee changes were implemented over the years, with Mr Wigley and his son, James – both based in Panama – eventually taking on the title in 2015.  

Describing Mr Wigley as “a law unto himself”, Mr Heinrichs, who was represented by Advocate Stephen Baker, alleged that his family had been put through a “hellish ordeal” to defend themselves from his “chicancery.” Alleging serious malpractice, they claimed that Mr Wigley had used “secret interest turns, false loans and other illicit transfers” to take millions of their money.

They also presented evidence to suggest that Mr Wigley had used Mr Heinrich's personal details to enable another La Hougue client to evade UK tax, including papers from the year 2000 which appeared to outline 11 methods through which the company was “apparently willing to assist in tax evasion.” 

The Court heard that such allegations were independently backed by a banking investigator from the Republic of Panama, where Mr Wigley still resides. He said that a Panama-based company owned by Mr Wigley used “all sorts of subterfuges and excuses” to avoid providing information to authorities, concluding that the business was being run “in a harmful manner, hazardous to the public interest, its customers” and the reputation of the Republic of Panama itself. The company's licence to conduct trust business has since been revoked by the country's regulator.

Mr Wigley declined to appear before the Royal Court, presided by Commissioner Julian Clyde-Smith, but submitted written evidence suggesting that the various trustee changes – including naming the beneficiaries as two charities – were some of the “great lengths” Mr Heinrichs had gone to in order to “shield his assets from creditors” and keep his family’s names off documents. He added that all parties involved in the administration of the trusts were aware Mr Heinrichs “personally controlled the affairs and assets of the trusts at all times.”

But the Court judged that they "should consider the affidavit evidence of Mr Wigley with considerable caution." By his own admission, he had fabricated company documents in 2013, including letters, promissory notes and ‘meeting’ minutes from 1994 to 2010. Moreover, he admitted to having previously made “untrue statements.” 

Clara Hamon of Baker and Partners asserted that he had “clearly passed” the evidence threshold of being prosecuted for perjury and perverting the course of justice, but the Court declined to pass judgement on these allegations of criminal conduct, stating that it was “not appropriate in his absence.”

The Court also refused a request to officially confirm or deny the Brazilian trusts as a “sham", with the Commissioner stating that it was hard to accept that Mr Heinrichs was not aware of Mr Wigley's actions and that, despite Wigley's fabrication admissions, that some of the documents had "a look of authenticity."

The Commissioner, who sat with Jurats Pam Pitman and Geoffery Grime, concluded: “The Court declines to give the declaration sought, but in the exercise of its supervisory jurisdiction over Jersey trusts it is prepared to give directions to [the new trustee] limiting its duties as trustee of the 1984 Brazilian Trust.”

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