Cushnie ordered to pay back £10m

Click to follow
The Independent Online

Carl Cushnie, the Labour party donor serving imprisonment for his involvement with the failed loans group Versailles, risks having his six-year jail sentence extended unless he comes up with more than £10m compensation.

The former chairman of Versailles, who is one year into his sentence at Ford open prison, was yesterday ordered to pay the compensation to defrauded City investors who lost £23m in the scandal.

If Mr Cushnie, 54, does not pay up by April 2007, he faces an additional three years in jail according to a confiscation order brought by the Serious Fraud Office. His right-hand man Frederick Clough, Versailles' former finance director who is also serving a six-year sentence, was ordered to pay back £14.2m last year.

Justice Rupert Jackson, who presided over three days of confiscation hearings at Southwark Crown Court, called Mr Cushnie a "highly sophisticated fraudster" who had lied on two occasions.

The former FTSE 250 company boss also faces further calls for cash from the investors he defrauded, who are still free to pursue civil actions for damages. At the time, Mr Cushnie promised interest of 17 per cent. He was convicted last year of defrauding wealthy private investors who backed Versailles Traders, his trade loans business, although he escaped conviction for a much larger fraud at the sister company Versailles Group.

Yesterday's confiscation order comes after Mr Cushnie's lawyers failed to get the hearing postponed to give them more time to deal with SFO allegations that he had been hiding assets. He owns a large villa in Ramatuelle, near St Tropez, and a big property in Kingston, Surrey.

Versailles, which lent money to small businesses, collapsed in late 1999 after it emerged that most of its reported turnover of £600m had been fabricated. Before the company collapsed, Mr Cushnie sold shares worth £29m, while Mr Clough transferred more than £19m to his offshore accounts, the jury heard in last year's five-month trial. Mr Cushnie has been banned as a director for ten years and Mr Clough for 15 years.