Gerald Smith: The Fraudster Splashing the Cash While Owing the SFO £73 million

Eighteen years after he was ordered to repay more than £40 million to the taxpayer, Gerald Smith still hasn’t paid up.


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LONDON (Bywire News) - If you claim you’re too poor to pay a £73million debt to the taxpayer, it doesn’t do your argument any good to spend £10million on fine art. However, as a case against convicted fraudster Gerald Smith shows, this is simply the way he does business. 

A fortune build on crime

Smith was originally convicted in 1993 over the theft of £2 million from a pension fund. In 2006 he was at it again, stealing £34million from an IT company. He was jailed for 11 months and ordered to pay a confiscation order of around £41million with a deadline of 12 months. 

Since then, though, he has paid very little of it. The debt has spiralled to more than £73 million and he could potentially be returned to prison if he doesn’t pay. However, he argues he’s too poor. 

Even so, this hasn’t stopped him going on a remarkable spending spree over the past couple of years. Back in January 2019, the Evening Standard reported that he had embarked on an extraordinary spending spree including 105 private jet flights in a single year covering places such as Hong Kong, Dubai, Buenos Aires, Vancouver and the Maldives. 

By that time, his debt had grown to $66million thanks to £8,000 interest per day. It currently stands at £73 million and rising. 

Now, according to court documents from the Serious Fraud Office, he has embarked on a fresh spending spree buying a portfolio of fine art from the prestigious Halcyon Gallery in Mayfair.  

The purchase was revealed through a series of emails between himself and the gallery in which the owners thanked him for the purchase, informed him his painting was on display in the window and even offered him dinner with one of the artists whose work he had bought. 

The purchases were made out in the name of his former wife. The two were divorced but told the court they maintain a ‘close personal relationship’ which includes numerous private jet trips to luxurious leisure destinations abroad. 

The revelations came as part of filings in a case brought by the SFO, along with a number of parties are seeking possession orders against assets which they say were acquired by his illicit activities. 

They include multiple homes in London and Jersey as well as the proceeds from the sale of London Hotels and other properties around the world. 

The case also includes a stash of jewellery worth £370,000 currently residing in a safe deposit box in Dubai being held by a former special forces soldier. According to court documents, the jewellery is said to have been given by Smith as security for an outstanding $100,000 fee for computer hacking operations. He is currently refusing to return it while Smith is also laying claim to it in order to pay the debt on his confiscation order. 

According to David Saoul QC, who opened proceedings, the purchases are typical of his behaviour in which he used other people to disguise his own major purchases. He described Smith as ‘a different class of robber’ with ‘unlimited self-confidence’ who funded his lavish lifestyle with illicit activities. 

As well as the purchases of artwork, Saoul also cited purchases of a Porsche and Aston Martin from a dealer in Jersey both of which were purchased in the name of his wife. 

Hundreds of thousands of pounds had also been spent chartering a yacht and more than a million pounds had been spent on private jets between 2014 and 2015.

The case, he warned, would be extremely complicated as they related to the varying fortunes of two entrepreneurs. Smith’s finances are entangled with Andrew Ruhan a motorsport fan who had invested tens of millions of pounds in the Lotus F1 team. 

However, his purchases from the Halcyon Gallery, say prosecutors, show that he continues his lavish lifestyle despite the mounting debt.

The Halcyon Gallery has also attracted its own share of controversy. In 2019 it was the subject of a lawsuit from an artist who claimed it was holding his work without his consent. 

The brother of the director, Ehud Sheleg, Ran, was also involved in a binary options trading, binary affiliates company which promoted controversial trading products which were later implicated in fraud and organised crime. The products were banned in the UK elsewhere due to the inherent risk of the products and the conduct of firms selling them. 

Ran describes Binary Affiliates as a failed business which never turned a profit. There are no suggestions he or Ehud committed fraud. However, although Ran denied any involvement with the gallery, he was director of Hong Kong company Halcyon Art International.

The Gallery has also close ties to the Conservative Party and the Royal Family. It sponsored events at Buckingham Palace, co-hosted a party with Princess Eugenie and sponsors an annual polo match in which Princes William and Harry have played for the Halcyon Gallery team. 

While Boris Johnson was Mayor it hosted a drinks party for his charity, the Mayor’s Fund for London. In 2010 the gallery started funding the Conservative party and Ehud personally donated £1.88 over the course of two years. 

Theresa May rewarded his generosity by appointing him co-treasurer of the Tory party. 

This is more than just a story of an unreformed fraudster living the high life from his ill-gotten gains. This is the story a man in which wealth and power become intertwined. 

Despite building a fortune from illegal activity, he has carried on as if the law doesn’t apply to him. Time will tell if the SFO’s latest efforts finally make him pay. 

(Written by Tom Cropper, edited by Klaudia Fior)


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