A tycoon who claimed it was wrong to seize his opulent Surrey property during a fraud prosecution that later collapsed has lost his bid for £66 million in damages yesterday after a judge declared that it was built using the proceeds of crime.
Baljit Singh Bhandal sued Revenue & Customs for damages after Updown Court, a 103-room mansion in Windlesham, was raided by the Revenue in 2001 when he was charged with involvement in a scam to divert alcohol from a bonded warehouse.
The property, which lies in 58 acres, was sold by receivers the following year for £14.2 million.
Mr Bhandal, who had been accused of money laundering after one of the largest investigations ever carried out by the tax authorities, was alleged to be the mastermind behind the bonded warehouse fraud. However, the case collapsed in 2005.
He claimed that had it not been for the failed prosecution he would have been able to develop and sell Updown Court for £80 million, and that he was £66 million out of pocket.
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Mr Justice Collins, sitting in the High Court, dismissed his argument, saying that he was in no doubt that Mr Bhandal was guilty of the crimes he had been accused of and the property had been developed using proceeds from crime.
“I regarded him as a thoroughly unsatisfactory witness,” he said. “I am satisfied beyond any reasonable doubt . . . that he is guilty of the criminal conduct alleged against him and that Updown Court was acquired from the proceeds of crime.”
Lawyers for HMRC had told the court that the house was bought and developed using criminal proceeds. “There was no acquittal on the merits and it was clear that massive fraud had been committed,” said the HMRC team. Mr Bhandal bought the Queen Anne-style Updown Court in the 1990s after it was gutted by the storm of 1987, and rebuilt the interiors.
During the fraud trial he jumped bail and left the country under a false passport. When he returned to Britain in 2005, he was given an eight-year jail sentence for attempted kidnap.
Updown Court, which has six swimming pools, a 50-seat cinema and gold mosaics, was said to be the most expensive home for sale in the world when it was offered for £70 million in 2005.