Retirement business loses fight for share of fraudster doctor's wealth

Friday 27 January 2023

A UK court has found that a retirement company is "not entitled" to a stake in a Jersey fraudster's liquidated wealth.

On Friday, the English Court of Appeal dismissed an attempt by savings and retirement business Phoenix Group Ltd to claim a stake from the liquidation of assets of Gerald Smith.

In 2002, Smith purchased a 30% share in Software company Izodia, exerted control and moved Izodia’s cash assets 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, sentenced to eight years in jail and ordered to pay a confiscation order of £41m. With interest, the total owed by Smith by 2021 was approximately £72m.

Since that time, several parties have made claims to a share of Smith's liquidated assets, one of which being Phoenix Group Ltd.

Pictured: The UK Court of Appeal has ruled that Phoenix Group Ltd is not entitled to a stake in Gerald Smith's liquidated wealth.

Phoenix argued that Smith's ex-wife, Gail 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. 

However, Lord Justice Richard Snowden, leading a panel of three judges, concluded that the agreement between Phoenix and  Cochrane did not bind the liquidators to give any surplus from the selling off the assets to the savings business.

Richard Slade of Richard Slade and Co, which represented Phoenix, was reported by Law360 as saying the case turned on the interpretation of "a very difficult document, the meaning for which we contended is the only viable meaning... the Court of Appeal disagreed."