Gerald Smith’s lifestyle was based on fraud… so why has he STILL not paid taxpayers back? 

The mansion was far from the only property that Gerald — or Dr Gerald Smith to give him his full name — owned

Eighteen years ago police knocked on the door of a £12 million mansion in Jersey.

‘Gerald,’ shouted the woman who opened it. ‘The police are here again.’

As officers searched the premises, gardeners arrived to manicure the grounds while inside workmen busied themselves installing flat-screen TVs in all the bedrooms.

The house, one officer observed, was so grand it even outshone the governor’s next door.

And, as it turned out, it was far from the only property that Gerald — or Dr Gerald Smith to give him his full name — owned.

There was a £3 million home in Surrey overlooking the fifth tee at Wentworth golf course, an Alpine ski lodge available to rent at £25,000-a-week, and a couple of villas in Mallorca.

And that’s before we start on the other ‘baubles’ — the £1.8 million down payment on a luxury yacht in Australia, the Audi A8 and a specially designed, £20,000 water feature.

Not bad going, in other words, for a former family doctor turned entrepreneur.

But what would emerge after that police raid in December 2002 were the fraudulent foundations on which Smith’s luxurious lifestyle was built.

Following a four-year investigation by the Serious Fraud Office, the company director pleaded guilty to stealing £34 million from a tech company he ran. 

As the net tightened around him, it emerged that he had even attempted to bribe a former Lord Mayor of London.

Jailed for eight years, Smith was also ordered to hand over £41 million of his ill-gotten gains — at the time the largest confiscation order to ever be made. The extra £7 million on top of the £34 million stolen represented interest accrued since the 2002 fraud.

Not bad going, in other words, for a former family doctor turned entrepreneur. But what would emerge after that police raid in December 2002 were the fraudulent foundations on which Smith's luxurious lifestyle was built. His £12million mansion is pictured above

Not bad going, in other words, for a former family doctor turned entrepreneur. But what would emerge after that police raid in December 2002 were the fraudulent foundations on which Smith’s luxurious lifestyle was built. His £12million mansion is pictured above

About one-third of the sum was ordered to be returned to the public purse — essentially the British taxpayer — with the remainder to go to the banks and shareholders who lost money in the original fraud.

Compensation orders were made, to be paid out of the confiscated funds. They were made in favour of Izodia Plc in the sum of £5.3 million and the Royal Bank of Scotland International, Jersey, in the sum of £21.4 million.

He was given 12 months to pay up or face a further eight years inside.

‘He has lost everything,’ his counsel said in mitigation as he was jailed. ‘He is the author of his own misfortune. He has lost everything as a result of what happened. He is ill, his wife has left him. He is now completely penniless.’

Fast forward to the present day and those words ring even more hollow than they did back then.

Because since his release from jail, Smith appears to have been living a life of luxury — again at colossal expense to the taxpayer — further fuelling concerns about the ability of criminal ‘Mr Bigs’ to avoid repaying their debts.

For starters, the 65-year-old still has not handed over the £41 million. With interest accruing at the rate of £8,000 a day, as of a fortnight ago, he now owes £72,881,322.40.

He had married his wife, Dr Gail Cochrane, a GP, in 1991, with the couple having two daughters soon afterwards. They moved to Jersey in 2001, where Dr Cochrane worked as a part-time GP

He had married his wife, Dr Gail Cochrane, a GP, in 1991, with the couple having two daughters soon afterwards. They moved to Jersey in 2001, where Dr Cochrane worked as a part-time GP

And in the years since his release from prison, any signs of penury have been few and far between, to say the least. In one two-year period, legal papers claim he has blown £7 million on fine art, purchasing seven paintings in a portfolio of works by Renoir, Rodin, Degas, Matisse and Dali.

Another £1 million is alleged to have paid for 100 flights on private jets and more than £350,000 on diamond jewellery from Graffs for his ex-wife and daughters.

As for his property portfolio, that has been said to include 14 flats in London worth £16 million, two villas in Mallorca worth £5 million, land in Italy and a ski lodge in Whistler, Canada. The true extent of his wealth is now at the centre of a High Court civil trial as the SFO’s lawyers claim Smith has hidden his assets through his family, associates and a string of dodgy deals and opaque corporate networks.

After the ten-week hearing, Mr Justice Foxton will rule on who owns the assets.

Once the case is concluded, Smith is expected to appear before a judge over the confiscation order when he could then face jail.

But, given the way things have gone thus far, no one is holding their breath for that to happen. As the SFO’s Daniel Saoul QC told the remote hearing this week, Smith is an individual who displays ‘unlimited self-confidence’.

‘He is unscrupulous, he is ruthless and he is serially dishonest,’ he added. What emerges is a toxic combination; a man of great charisma, great intelligence and with a complete lack of integrity.

‘What I am describing is the prototype for a classic fraudster. Someone close to Smith once described him as a ‘different class of robber’.’

And indeed he is. Born in 1955, Smith trained and practised as a doctor until 1987 when he turned to the world of business. From the start, he sailed close to the wind.

In 1991, he was criticised by the Department of Trade and Industry for his role in the misappropriation of £712,000 by a fund manager to whom he was close.

Then, in 1993, he was convicted of the theft of some £2 million from a pension fund, resulting in a two-year prison sentence. As the then boss of construction firm Farr, Smith had channelled the stolen funds through bank accounts in Geneva and Panama before bringing them back into Britain in an attempt to keep the company afloat following the property crash at the start of the decade.

The fund had 500 investors and the detective who led the inquiry said at the time: ‘You cannot quantify the suffering he has caused by his actions. He was a flamboyant businessman who was not suited to the construction company.’

Even then Smith enjoyed the high life, driving a Porsche and flying around the UK in a helicopter.

He had married his wife, Dr Gail Cochrane, a GP, in 1991, with the couple having two daughters soon afterwards. They moved to Jersey in 2001, where Dr Cochrane worked as a part-time GP.

Smith saw himself as a brilliant deal-maker, albeit one who liked to keep out of the limelight. ‘I don’t like being in the public eye,’ he would say in an interview after release from his first prison sentence.

But his greed would be the undoing of him.

In 2002, Smith, by then a director of Orb, a Jersey-based investment group, made a move on a company called Izodia. Izodia traded in computer software but when the dotcom bubble burst it ran into trouble, its share price plummeting.

While its business ground to a halt, what it did have was some £40 million cash in the bank. Smith proposed turning the firm into a vehicle for owning property, acquiring a substantial stake in the company. He then moved its cash pile to Jersey — and stole it. 

When his attempts to cover up what he had done failed, he attempted to bribe Sir Anthony Jolliffe, a former Lord Mayor of London who had become Izodia’s chairman, telling him that in return for him turning a blind eye he could ‘name his price’.

Instead Sir Anthony alerted the SFO who in December 2002 commenced an investigation, carrying out the raid in Jersey.

In February 2005, Smith was charged with misappropriating funds. The following year, on the day that his trial was due to begin, he pleaded guilty to ten counts of theft and one count of false accounting.

The amounts stolen represented over £34 million. He was later sentenced to eight years in prison and banned from acting as a company director for 15 years. But that wasn’t the end of it. 

Moves were also under way to confiscate Smith’s assets, few of which were held in his own name. In 2007, a court ordered him to hand over almost £41 million or face a further eight years in prison.

Vernon Coaker, Home Office minister at the time, hailed the conviction as a ‘landmark achievement’, adding: ‘It is an excellent example of the multi-agency approach to seizing assets from criminals, and reinforces our message to them that crime doesn’t pay.’

If only. Released from prison after four years, efforts to claim the money from Smith have been going on ever since.

In 2013, it was reported that he had handed over just £1.3 million of the sum owed.

But because he was deemed to be co-operating, the eight-year default sentence for non-payment had not been imposed.

There was a £3 million home in Surrey overlooking the fifth tee at Wentworth golf course (which is pictured above), an Alpine ski lodge available to rent at £25,000-a-week, and a couple of villas in Mallorca

There was a £3 million home in Surrey overlooking the fifth tee at Wentworth golf course (which is pictured above), an Alpine ski lodge available to rent at £25,000-a-week, and a couple of villas in Mallorca

Meanwhile Smith has been involved in a series of complex civil cases to try to recoup tens of millions of pounds he claims to have been owed by former business partners.

The actions have featured allegations of computer hacking as well as a ‘no holds barred’ court battle with a Formula One investor.

He has insisted that once he gets his hands on what is rightfully his, he will repay the money owed.

At the hearing that began this week, the SFO and a number of other claimants are seeking to establish who owns tens of millions of pounds worth of assets they say are derived from the profits of Smith’s unlawful activities.

These include homes in London and Jersey as well as the proceeds from the sale of London hotels and other property worldwide.

Other assets being fought over in the case include £370,000 worth of Graff jewellery, comprising diamond earrings and a diamond bracelet, which has been stored in a safe deposit box in Dubai by a former special forces soldier.

According to the court documents, he was given it by Smith as security for an outstanding $100,000 fee for carrying out computer hacking on opponents during an early court battle and has been refusing to return it.

It is being claimed that Smith has used a number of individuals, including his former wife, to conceal his spending.

‘Dr Cochrane is Dr Smith’s former wife: the couple retain close ties, despite having allegedly separated in 2005 and then divorced in 2012,’ papers submitted to the hearing read.

The way in which artworks were purchased from the Halcyon Art Gallery are claimed to exemplify this. ‘The exchanges are revealing because they lay bare Dr Smith’s lavish spending on artworks for himself (and not Dr Cochrane),’ the SFO claims.

Emails detail how the gallery said it wanted to ‘thank Gerald for sending the money’ on one occasion and on another that ‘Gerald’s painting is in the window’.

Despite this, every bill sent by the gallery was in the name of Dr Cochrane.

Evidence was also presented in the opening arguments of Smith’s regular use of private jets in 2014 and 2015. Of 100 flights costing a total of £1 million, it is claimed Dr Cochrane accompanied her former husband on 21 occasions.

At a previous hearing, it was also revealed that another £275,000 was spent flying Smith and his associates on British Airways during the same period.

The court was told that the most expensive trips included visits to Hong Kong, Buenos Aires, Bermuda and the Maldives, where he stayed in top hotels sometimes totting up bills of more than £10,000. A three-day trip to Dubai made by Smith and ‘his entourage’ cost just under £50,000.

The SFO is one of several parties with a claim to Smith’s assets.

Approached by the Daily Mail, his lawyers declined to comment saying it would be inappropriate due to the on-going litigation.