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Criminal loses €93m claim on Irish Nationwide-backed home


Matt Damon in Green Zone

Matt Damon in Green Zone

Matt Damon in Green Zone

A criminal businessman who once owned what was one of the world's most expensive homes has lost a court battle for £66m (€93m) in compensation after collapsed building society Irish Nationwide had a receiver appointed to the British property in 2001.

Irish Nationwide, then run by chief executive Michael Fingleton, had helped to finance the redevelopment of Updown Court in Surrey with a £14m mortgage provided to a company which was ultimately controlled by Baljit Singh Bhandal.

But Mr Bhandal, also known as Barry Bhandal, had bought the property and funded its redevelopment using illicit cash generated from evading excise duty and VAT in a massive £300m fraud related to alcohol sales. He was late jailed for other crimes. Irish Nationwide was duped into providing the mortgage in 2000 by a Jersey-based accountant working on behalf of Mr Bhandal.

As the alcohol excise and VAT fraud came to light in the late 1990s, the UK's Revenue and Customs agency initiated investigations into a number of individuals, including Mr Bhandal.

He absconded from the UK in 1998 and returned in 2005.

The fraud case in which Mr Bhandal would have stood as a co-accused was abandoned in 2003 because the precise role of a Revenue and Customs informant had not been properly disclosed.

As part of its earlier investigation, Revenue and Customs had carried out a raid on Updown Court in 2001. Mr Bhandal was developing the huge residence at the time, with a view to selling it for £80m.

It has since been used to depict a war-torn Baghdad palace in the Matt Damon movie 'Green Zone'.

In September 2001, Irish Nationwide had an administrative receiver appointed to the property because of a loan default. The property was sold by Irish Nationwide in 2002 for £14.2m.

It provided a mortgage to the new buyer and retained a charge over the home until it was sold again by Nama, this time in 2011, for about £35m. Mr Bhandal claimed that had the receiver not been appointed in 2001, he could have sold the property for £80m and so was entitled to £66m compensation from Revenue and Customs. A London court has dismissed his claim.

"I am satisfied beyond any reasonable doubt… that the claimant is guilty of the criminal conduct alleged against him and that Updown Court was acquired from the proceeds of crime," said the High Court.

Irish Independent