Ferrari fraudster’s family fight to recover ‘loans’

Wednesday 14 August 2019

The family of a Jersey fraudster, who stole from clients to buy a Ferrari and fund a luxury lifestyle, are fighting a Royal Court battle to get back the money they lent him to keep him afloat after he was suspended from his job but not yet convicted.

Lawyers say the family have been forced to take the unusual action in the Royal Court because moves by the Crown to seize Richard Arthur's wealth could leave them unfairly out of pocket.

In July last year, former BDO accountant Arthur pleaded guilty to three counts of fraud, three counts of fraudulent conversion, and four counts of falsification of accounts, totalling £2.6m, and was sent to prison for seven years.

The offences concerned three different clients of BDO: the Humberstone Trust, a Jersey law discretionary trust settled by Desmond Humberstone on 16 May 1997, the only beneficiaries of which were Mr Humberstone’s two daughters; second, an elderly French resident; and third, an elderly Jersey resident. The offences spanned a period of seven-and-a-half years from 6 March 2002 to 25 September 2009. 

Pictured: Arthur was jailed for seven years for his crimes.

Arthur, who’d worked for BDO since 2004, was suspended in 2009, and banned from working in the finance industry pending the outcome of the case. Nevertheless, he still needed to live, so his mother and mother-in-law ‘lent’ him money to keep the family together. This was a loose arrangement and the plan was that he would pay it back interest free when he was back on his feet. His wife also claims her husband’s actions have unfairly saddled her with debts.

The problem for the family is that Arthur has been unable to pay that money back because he wasn’t able to work, and any money or assets he has have been frozen by the Crown. They’re now going even further and want to confiscate the cash under the Proceeds of Crime Law, which aims to prevent criminals benefiting from their activities.

In a complicated case heard at the same time as the family’s civil case, the Crown this week argued Arthur’s assets should be used to pay off the remaining money he owes those he defrauded, and that they should be compensated, ahead of the family receiving any money. However, the family’s lawyers argue these cases have already been settled.

Pictured: The case is being heard in the Royal Court.

The Crown is also concerned that any money Arthur ‘pays’ back to his family will simply be handed back to him - in effect meaning he’ll have benefited from his crimes, making a mockery of the law. It’s an allegation the family lawyers counter by saying it is possible, but not relevant. The family is owed the money, it is their money, and what they choose to do with it is up to them.

Following a full day of legal argument, the court of five jurats headed by Royal Court Commissioner Julian Clyde-Smith, reserved its judgement, which means the family are still left waiting to find out if they’ll get their money back.