An extraordinary dispute taking place in the Isle of Man, over whether the Securities and Exchange Commission (SEC) or two Cypriots has the right to $250m (£135.4m) of alleged defrauded money, has now widened to include Guernsey.
For three years the SEC’s lawyers, City firm Herbert Smith and leading commercial barrister Murray Rosen QC of 11 Stone Buildings, have been seeking to have the money returned to the US. However, efforts by various parties, including the two Cypriots, to keep the fortune in an Isle of Man trust have so far prevailed.
The money is said to be the proceeds of alleged massive frauds carried out by two former chief executive officers and the former president of US software giant AremisSoft, according to US large-scale civil and criminal investigations. It is said to be the largest ever SEC case to have extended beyond US borders.
Yet the discovery of further cash in bank accounts in Guernsey is expected to delay any return of the money to the US.
The two Cypriots with claims to the fortune are related to one of the former directors of AremisSoft, alleged fraudster and Cypriot software entrepreneur Roys Poyiadjis.
One is his wife, Donna Poyiadjis, the other his father, Spyros Poyiadjis. They are instructing leading London counsel Hodge Malek QC of 4-5 Gray’s Inn Square.
Roys Poyiadjis, who lives in Cyprus, is charged with securities fraud, insider dealing and helping to launder the $250m from the US to the Isle of Man and, as is now claimed, to Guernsey. In mid-March Christopher Cope, Roys Poyiadjis’s lawyer at Isle of Man firm Dickinson Cruickshank & Co, appealed against a decision to uphold a US court decision to freeze the assets in the tiny offshore jurisdiction. Roys Poyiadjis strenuously denies the claims, said Cope.
The case is likely to rumble on for some time, particularly as there are further parties competing for the cash. A large number of investors is also seeking compensation from the $250m, claiming to be victims of the alleged fraud at AremisSoft. Their criminal claim, for the money to be returned to the US, brings them up against the Poyiadjis’s family claims. The investors are represented by Elizabeth Gloster QC of One Essex Court and Richard Millett of Essex Court Chambers.
Another party competing to have the assets sent back to the US is the Attorney-General for the Southern District of New York, who has instructed London fraud barrister David Farrer QC, head of 7 Bedford Row.