Fraudster makes a clean breast of it in US

Under investigation by the SFO, Gerald Smith restarts his career with lingerie retailer. Jason Nissé reports

Gerald Smith, the controversial businessman whose dealings with shell company Izodia have prompted a Serious Fraud Office investigation, is trying to restart his career in New York.

Mr Smith has been appointed by Figleaves.com, a London lingerie retailer, to set up a US office. He has been meeting with potential employees and business contacts and is understood to have told people that he is based in New York.

The former GP, who served 11 months of a two-year sentence for fraud in the mid-1990s, hit the headlines a few months ago when the SFO, aided by Jersey and Thames Valley police, launched a probe into the disappearance of £33m from Izodia, a former e-commerce company which by then was a quoted cash shell.

The money was traced to Orb Estates, a property group, and to Mitre Property Management, an associate company of Orb, which had taken a 30 per cent stake in Izodia and placed two directors on its board. Mr Smith was officially a consultant to Orb but in effect was one of the three people who ran the company.

Izodia and Orb have been locked in a legal battle for nearly a year over the return of the money, which Orb has never disputed belongs to Izodia.

In the meantime, Orb has been selling businesses it controls - primarily a portfolio of freeholds to hotels in the Thistle chain. One of its investments has clearly gone sour after the world-famous Poole Pottery was placed in administration in June.

It has also sold its shareholding in Izodia, which was bought by Andy Ruhan, a Birmingham-based property developer best known for his involvement in Global Switch, the internet hosting company which he owned jointly with Elliot Bernerd's Chelsfield.

Mr Smith was fined £10,000 for failing to comply with a court order to produce documents relating to Izodia's missing funds in April, and then only just met a July deadline to deliver information about the missing money.

He is now trying to set up a business in the US, The Independent on Sunday has learnt. He told people in New York that he was representing Figleaves.com, a successful north London lingerie retailer. This was confirmed by Michael Ross, Figleaves' chief executive. "Gerald Smith is assisting setting up an office for us in New York," he said.

It is understood that Mr Smith has a long-standing relationship with Figleaves. A trust which he controlled in the Channel Islands was a shareholder in the company but is understood to have sold out in recent months.

Figleaves was founded by Mr Ross, who made his money out of pagers, after he bought the UK rights to a US bra retailing business which subsequently went bust.

Figleaves has a novel breast measuring device called a T-Bra, which lets women estimate their bra sizes at home.