Gerald Smith was sentenced today at Cambridge Crown Court to eight years' imprisonment for misappropriating over £34 million belonging to Izodia plc and to false accounting. He has also been disqualified from acting as a company director for 15 years. He had pleaded guilty in April this year. Costs and confiscation have been put over to a date later this year to be confirmed
Izodia was a company trading in computer software, a 'dot-com' company. When the dot-com bubble burst, Izodia did little trading but became a cash shell. In 2002 Dr Gerald Smith (dob 21.05.55) through his Jersey-based property business, the Orb Group, acquired a substantial stake in Izodia and was able to exert control, which resulted in the movement of Izodia's cash asset from the Reading Branch of the Royal Bank of Scotland to Jersey from where it was stolen by Smith.
Following a complaint made by the Royal Bank of Scotland, the Serious Fraud Office, together with the Thames Valley Police, commenced an investigation in December 2002 into suspected fraud surrounding the missing funds. Dr Smith was charged in February 2005. Proceedings were also commenced against two other defendants, Jarlath Vahey and Peter Catto, ex-directors of Izodia. All charges relate to events in 2002.
On 24 April 2006 the trial of Smith and Vahey opened at Blackfriars Crown Court (Catto was severed from that trial because of ill health). Dr Smith pleaded guilty to ten counts of theft contrary to section 1(1) of the Theft Act 1968 and to one count of false accounting contrary to section 17 of the Theft Act 1968. The amounts stolen represent over £34 million. Two counts of conspiracy to defraud contrary to Common Law and one count of using a false instrument contrary to section 3 of the Forgery and Counterfeiting Act 1981 were not proceeded with.
Following the plea entered by Smith, the SFO decided not to continue with the prosecution of Vahey and on 24 April 2006 the charges against him (two counts of conspiracy to defraud) were left on the file. With regard to Catto, the SFO informed the court today that charges against him were also to lie on the file.
Sentencing and confiscation
The sentences of imprisonment handed down today to Gerald Smith are (a) four year on three of the theft counts to run concurrently to each other and (b)four years on each of the remaining seven theft counts and the false accounting count also to run concurrently to each other. The two sets of four-year concurrent sentences are to be consecutive, i.e. the term of imprisonment represents eight years.
The defendant was also disqualified from acting as a company director for 15 years.
The SFO has pursued restraint and confiscation of assets and today the judge set the confiscation hearing for a date in November but to be confirmed.
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