CARL CUSHNIE, the disgraced founder of Versailles, the collapsed trade finance house, has been ordered to pay more than £10 million to his victims.
Cushnie, 54, who faces a string of civil actions from former Versailles “traders” — wealthy individuals who underwrote loan financing — faces a further three years in prison on top of his current six-year sentence if he fails to produce the money.
The former financier, once lauded by Tony Blair as one of Britain’s leading black businessmen, has until April 2007 to release the £10 million, which he says he does not have. He sold Versailles, worth £29 million before the collapse. It has been speculated that millions stolen from the company are now in offshore bank accounts. Cushnie’s lawyer, Matthew Frankland of Byrne and Partners, described the confiscation order as “unfair” but said that an appeal was unlikely.
Cushnie, he said, had been ordered to pay compensation based on the amount paid to Versailles, whereas his coconspirator, Fred Clough, the former Versailles finance director, was assessed on how much he had made personally.
Using the same measure, Cushnie would have been liable for less than £500,000, not £10 million. Mr Frankland said: “We’re disappointed that the Crown took that route but it’s not an order that we think we will appeal. He pretty much faces financial ruin either way.”
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Cushnie and Clough were convicted in May last year of defrauding Versailles investors.
Making the confiscation order yesterday, the trial judge, Mr Justice Jackson, described Cushnie as a “highly sophisticated fraudster” who had lied on two occasions.
Cushnie argued during his trial that he had been taken in by Clough, who inflated Versailles’ finances by concocting false invoices and payments.
The Versailles prosecution was a notable success for the Serious Fraud Office.
Cushnie is serving his sentence at Ford Open Prison in West Sussex. After twice failing to win leave to appeal against his conviction, he is appealing to the European Court of Human Rights in Strasbourg. He has also taken up his case with the Criminal Cases Review Commission.
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Clough, 68, was ordered last July to pay compensation of £14.2 million.
Versailles, one of the highflying stocks of the 1990s, crashed into receivership in January 2000 after investigating accountants uncovered a massive fraud. Pension funds, local authorities and other Versailles shareholders lost more than £100 million in the collapse.
EX-FINANCIER’S £1.7m PENALTY
George Steen, who fled the UK for the Philippines in 2003 while on trial for fraud, only to be brought back for sentencing by the SFO, has been ordered to pay £1.7 million compensation to his victims. Steen, who was jailed for six years in June 2003, ran Corporate Advances, based in Brighton. He held secret bank accounts in Jersey, Liechtenstein, the Philippines and Panama.