Dr Gerald Smith ‘misappropriated’ £34m from IT company Izodia in 2006, admitting to ten counts of theft and one of false accounting, then issued with a confiscation order of £40m from the Serious Fraud Office (SFO), and an eight-year prison sentence.

With accrued interest, this has risen to £72m. Post release he continued to live a lavish lifestyle, flying in private jets, splashing out on expensive art pieces and spending £367,000 on wine as well as buying a ski chalet. Smith was deemed penniless, but all his assets were in the name of his former wife, Dr Gail Cochrane.

During the pandemic, Smith decided to ‘exploit’ the generous system designed to help struggling businesses throughout the pandemic. He claimed his company, Arcana, had a turnover of over £200,000 while £170,000 was in the form of credit.

The judge said: ‘It was hard to detect if there was any legitimate turnover at all.’

However, he managed to claim the full £50,000 loan, withdrawing the full amount the same day, leaving just 2p in the bank account.

£22,000 of this was used to pay for court costs the SFO was chasing him for. The rest was used for personal use.

Shortly after receiving the loan and draining all of the funds the company was shut down without notifying the bank.

Kevin Hansford, specialist prosecutor of the Crown Prosecution Service (CPS) said: ‘Gerald Smith took advantage of a government system designed to protect and support businesses through the Covid pandemic. Rather than using the funds for legitimate business purposes, Smith diverted them for his own personal use and to fund a court costs order. 

‘The CPS and investigative agencies will continue to pursue fraudsters who dishonestly enriched themselves from government support grants and loans.’

The judge deliberated the sentencing for 40 minutes, taking into account the historic sentences and the vast amount of money still owed. However, Smith’s age came into account as well as his family who were present at court. If this was not the case the sentencing could have been three years. Additionally, he did pay back the Covid loan in full, but after he was under investigation.

The judge said regarding the previous sentences: ‘Because of three counter balancing characters I am not going to act on these.’

Detective inspector Andrea Bakewell, from the Fraud Operations team at the City of London Police said: ‘When many businesses were struggling to keep their head above water during the Covid pandemic, criminals were making use of the financial aid on offer. 

‘Gerald Smith demonstrated an incredible amount of manipulation, conceit and greed as he exploited the bounce-back loan scheme offered by the government. This level of exploitation during one of the hardest periods this country has ever faced is something we will not tolerate.’