Royal Court keeps control of South African millionaire lobster baron’s cash

Thursday 19 April 2018

A man who made millions by illegally draining South African seas of protected lobsters has been stopped by Jersey’s Royal Court from spending his money ahead of a $37.2million confiscation order.

In one of the biggest scandals in fishing history, Arnold Maurice Bengis was found guilty in 2004 of running a multi-million company that criminally overfished tens of thousands of West Coast rock lobster – a species protected by a quota – that was smuggled to the US and sold to high-end restaurants across the US over 14 years in the 80s and 90s.

The venture generated millions, which was then stashed in Jersey companies.

While the lobster is usually harvested using large vessels close to the shore, courts heard how the mogul employed fishermen with small boats to help fuel his supply, bribing fishing authorities to turn a blind eye to the activities of his 400-employee-strong company, Hout Bay Fishing Industries.

Local environmental researchers in the area scratched their heads over the rapidly diminishing lobster numbers, causing authorities to set fishing quotas lower and lower. It wasn’t until Bengis’ conviction, however, that they realised that his activities – the effects of which are still felt today - may have single-handedly depleted the area’s lobster population.

Pictured: A group of West Coast Rock Lobsters on a reef in South Africa. (Peter Southwood/Wiki)

Bengis served 46 months behind bars in the US and was ordered to pay $5million as part of a plea deal. Then in 2013 he and his co-conspirators were ordered to pay $22.5million back to South Africa in what was one of the largest compensation orders ever made under the Lacey Act, which prohibits the trade of illegally-obtained wildlife, fish and plants.

But four years later, the lobster baron had only paid around $1million and left the rest ‘out of reach’ in three companies with SG Hambros Bank in Jersey. He was subsequently re-sentenced to 57 months’ imprisonment and handed a forfeiture order of $37,200,838 in July 2017. 

With Bengis last reported as residing in Israel, an arrest warrant was issued against him, while Jersey’s Royal Court took control of his companies via a ‘saisie judiciaire’ to ensure that their funds weren’t exhausted before any money was paid back.

In the latest twist to hit Jersey’s court, First Trust – a Liechtenstein-based company linked with Bengis’ money – tried last month to cancel the saisie, which would allow Bengis to access his cash once more.

Arguing on their behalf before Commissioner Michael Birt, who sat with Jurats Nicolle and Ronge, Advocate Howard Sharp highlighted the significant delay since the original sentencing, and that “an 80-year-old man now faces an increased prison sentence and a vastly increased forfeiture order.”

He also branded the $37.2million forfeiture sum as “far too large.” He said that Bengis should only be made to pay a third of the total because the figure had been calculated using the lobsters’ whole weight, rather than just their tails.

The Court told him, however, that such arguments would be better directed at the New York Court of Appeals.

While he conceded that there had been an “unreasonable delay” of 18 years since the original sentence and “behov[ed] the US authorities to act with dispatch”, the Commissioner nonetheless dismissed the application to lift the saisie.

Following the ruling, Jersey's Attorney General, Robert Macrae, commented: "This case again clearly demonstrates the firm resolve of the Jersey authorities to combat international financial crime and money laundering. It shows that Jersey is no place to hide the proceeds of crime."