Gerald Smith, the property developer behind Orb Estates, was yesterday sentenced to eight years in prison for stealing £34m from e-commerce company Izodia.
He had pleaded guilty to 10 counts of theft and one count of false accounting. Smith was the force behind Orb when it acquired a stake in Izodia in July 2002.
However, within months he had raided Izodia’s accounts to help pay off a loan from Morgan Stanley that Orb had used to buy a portfolio of 37 Thistle hotels. Orb was faced with two huge interest payments of £17m and £10m.
In August 2002, Smith transferred £27.2m from Izodia’s account in Reading to one set up in Jersey. However, he then moved the money through other accounts and dispersed it among dozens of Orb-related companies.
A large chunk went towards the interest payments owed to Morgan Stanley, but £1.8m was used by Smith as a deposit on a luxury yacht.
Smith siphoned off a further £7.8 m between October and November 2002 and placed the money into the account of Mitre Property, another Orb subsidiary.
Smith will be released on licence in four years.