Gerald Smith: ‘Penniless’ fraudster lived high on hog says judge

·4-min read
<p>Gerard Smith was jailed in 2006 for stealing £34 million from an IT company</p> (Jeremy Selwyn)

Gerard Smith was jailed in 2006 for stealing £34 million from an IT company

(Jeremy Selwyn)

A judge has revealed how a notorious fraudster boasted of living “high on the hog” despite owing tens of millions of pounds to taxpayers and claiming to be virtually penniless.

Gerald Smith, a twice convicted conman with multiple properties in London, has spent nearly 15 years dodging repayment of a confiscation order obtained by the Serious Fraud Office that now stands at more than £72 million.

The former GP has repeatedly argued that he has not got the money to repay what he owes and recently won agreement to have some of the debt written off.

But in a ruling issued at the end of a seven-week hearing centring on his business affairs, a High Court judge has revealed how he hid his wealth by transferring assets to his former wife Dr Gail Cochrane so he could continue to enjoy a high-living lifestyle involving “idiosyncratic” art purchases, private jet travel and other extravagances.

Mr Justice Foxton said the deception was carried out by presenting Dr Cochrane as the owner of a “vast network of companies” engaged in “a complex web of dealings” – even though she described herself as a “busy GP with two young daughters” with “minimal knowledge of Smith’s business activities.”

The judge said Smith, another former GP, had also admitted that Dr Cochrane lacked “any independent experience of the world of business, the world of property deals”.

This meant the reality was that she was merely “a cipher” for the fraudster, who was instead “calling the shots” and using her to mask his own dealings.

The judge added: “Although notionally asset-less, 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.”

The judge said the purchases made using his wife’s supposed money included “a commissioned water clock and artwork chosen by Dr Smith” and “private jet travel, much of which involved Dr Smith travelling alone”.

He added that the fraudster had “a track record of seeking to disguise his interest in assets behind Dr Cochrane”.

Previous examples included the purchase of a ski chalet “through a corporate vehicle of which Dr Cochrane was a director and the transfer of his luxury car collection into Dr Cochrane’s name” shortly after the IT company fraud for which he was convicted in 2006 came to light.

“The confiscation order made against Dr Smith gave him every incentive to hide his ownership of assets behind a nominee owner who he could trust to follow his directions,” Mr Justice Foxton states in his judgment.

“It is clear that Dr Smith has acted at all times since the confiscation order was made with a view to making it appear as if he has no assets.”

The judge’s conclusions came as he backed claim by the Serious Fraud Office and a number of other parties to the proceeds of deals conducted by Smith and others, including the former Formula One investor Andy Ruhan.

The ruling means that prosecutors can now pursue assets of Smith’s including a missing Porsche driven off from a London car park and £367,000 spent on wine.

Other spending that could be targeted include £500,000 paid to a London dating agency and its boss and nearly £1.5 million that Smith splashed out on other cars including another Porsche, a Bentley Continental, an Aston Martin, two Range Rovers, four Mercedes and four BMWs.

Other lavish spending by Smith detailed in court documents includes £300,000 paid to a London consultant who founded Europe’s largest fertility clinic, more than £200,00 given to a South African game reserve company, £359,000 for chandeliers made by the US artist Dale Chihuly and another £434,000 towards the uncompleted purchase of his “The Sun” glass sculpture.

Further luxury spending included £115,000 on a “rare clock”, £48,000 on two unidentified purchases at Christie’s, £120,000 on gym equipment, and £1.2 million on carpentry.

The Serious Fraud Office has however accepted that around £30 million of Smith’s £72 million debt will have to be written off and that £42 million is the most it can hope to recover. A further court hearing to determine exactly how much Smith will have to repay will take place later.

Emma Luxton, head of the SFO’s proceeds of crime division, said it would continue to show “tirelessness” in “chasing, tracing and recovering” Smith’s illicit gains.

“Gerald Smith is a seasoned and sophisticated criminal who has twice been convicted of multimillion-pound theft,” she said.

“We refuse to allow his machinations to prevent us from pursuing and recovering the proceeds of his crime.”

Smith, who already a previous conviction for fraud, was jailed in 2006 for stealing £34 million from an IT company.

He was later given a confiscation order of £40 million but has seen his debt rise to £72 million with interest charges and still faces a potential jail term for non-payment.

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