Israeli fraudster fights UK attempt to seize assets

British police want to confiscate the property of a lawyer who swindled Israeli pensioners

David Connett
Sunday 18 March 2012 01:00 GMT

A jailed lawyer who defrauded Israeli pensioners out of tens of millions of pounds will ask the Supreme Court tomorrow to block an attempt by British police to seize his multimillion-pound assets. In a landmark case, the convicted fraudster Israel Perry is claiming the Serious and Organised Crime Agency (Soca) has no powers to confiscate his luxury homes and valuable art collection in the UK and elsewhere in the world.

Soca has frozen two UK bank accounts linked to Perry containing £14m, as well as an expensive property in Mayfair, London. Controversially, the High Court in London also gave the agency permission to freeze properties in Tel Aviv and Jerusalem, in New York and on the French Riviera, as well as art and antiques, including works by Chagall, Anthony Caro and Léger.

According to court documents seen by The Independent on Sunday, Perry, his wife and their two daughters have two London accounts – at Hoare & Co and Bank J Safra – containing £14m in three different currencies.

Perry is serving a 10-year jail sentence in Israel after being convicted of theft, fraud, obstruction of justice and withholding information. He was also fined more than £3m.

A Tel Aviv court heard how he embezzled more than £110m from a pension and insurance scheme that he set up in Israel in 1983. The scheme was designed to exploit a deal between the then West Germany and Israel to permit eligible Israelis to receive a German state pension. Some 30,000 people signed up to it, including many who survived Holocaust death camps such as Auschwitz.

Perry siphoned off millions of pounds by getting his victims to pay via shell companies in the Isle of Man and Cayman Islands. In his defence, Perry said: "Although I haven't always been acting with full transparency, I don't think my conduct constitutes a criminal offence." His trial judges described his actions as a "systematic, well-planned fraud".

Perry's UK legal team has challenged a High Court order that Perry disclose his UK assets, arguing that the law does not cover someone who is not "present, resident or domiciled" in the UK. It has also contested whether the 2002 Proceeds of Crime Act allows British detectives to freeze and seize overseas assets.

Trevor Asserson, Perry's solicitor, has criticised the legal moves against his client. "The present judgment allows the English court to make an order against citizens of Israel and of any other country, whether or not they have any responsibility for any criminal conduct. It threatens them with imprisonment in the UK if they do not provide what might be highly sensitive and confidential information about suspected assets, even though they may in the event prove to be unrelated to any criminal activity.

The case is being seen as an important test of British police and other law enforcement agencies' powers to seize and confiscate assets that they believe are the result of crime. "If the Supreme Court upholds [Perry's] arguments, then Soca and every other law enforcement body in the UK will be fighting international crime with one hand tied behind their back," said one lawyer familiar with the case.

The case is unusual because the Israeli authorities have not taken steps to freeze or recover any of Perry's assets in or outside the country.

* Mr Perry has asked us to point out that although he was convicted of embezzling tens of millions from a pension and insurance scheme and that whilst some of his victims were Holocaust survivors, the pension scheme did not target Holocaust survivors.

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