Mourant du Feu & Jeune has recently made a successful
application on behalf of its client, Mr Gary Kaplan, to secure the
discharge of a saisie judiciaire obtained at the United States'
behest freezing all his realisable property situate in Jersey.
In 2007 US businessman Mr Kaplan was arrested in the Dominican
Republic in connection with charges brought in Missouri by the
United States in relation to his former internet gambling business,
BetonSports Plc. Whilst BetonSports had been based outside the USA,
the majority of its 1.2 million customers had been US citizens. The
US Department of Justice viewed its activities as illegal and Mr
Kaplan, having been placed on a rendition flight from the Dominican
Republic to Puerto Rico, was placed in custody in Missouri.
Betonsports Plc had been floated on AIM in 2004 and the profits
from the sale of its shares had found their way into two Jersey
trusts whose sole trustee at the time was a Jersey trustee. The
principal assets of the Jersey trusts were an estate in Costa Rica
and cash held in Swiss bank accounts.
Several months after Mr Kaplan's arrest, the Attorney
General made an application to the Jersey court at the behest of
the US Department of Justice for a saisie judiciaire under the
Proceeds of Crime (Jersey) Law 1999 (the '1999 Law') in
respect of Mr Kaplan's property in Jersey. The court granted
the application and authorised the Viscount to take possession of
the property and manage or otherwise deal with it in accordance
with the directions of the court.
At the beginning of 2008, at the request of the US Department of
Justice, a Seizure Order was granted by the Département
Fédèrale de Justice et Police in Berne freezing bank
accounts in Switzerland. Mr Kaplan then launched his application to
discharge the saisie judiciaire in Jersey in the summer of
Not the world's policeman
Whilst the court found that the saisie judiciaire had been
properly obtained by the Attorney General in 2007, it decided to
exercise its discretion to discharge the saisie. It did so on the
The continuation of the saisie placed the Viscount in an
impossible position: the Viscount's duty to "take
possession of and to manage or otherwise deal with any realisable
property" could not be fulfilled in this scenario because,
first, the assets in Switzerland had been frozen as a result of
action taken by the US and, secondly, the assets in Costa Rica were
principally immoveable property which was beyond his reach.
Continuation of the saisie would be unfair to the trustee: the
court stated that the trustee of the Jersey trusts should not be
condemned to 'some form of legal purgatory' for an
indefinite period. The Trustee had resigned during the continuation
of the saisie but the assets it held remained vested in the
No role as the world's policeman: the court referred and
relied on the recent House of Lords case of King v Serious Fraud
Office  UKHL 17, which held that requests to countries for
assistance in preserving and recovering property that is related to
criminal activity should be restricted to provision of assistance
in relation to property located within that country's own
jurisdiction. If each country were requested to take steps to
procure the preservation or recovery of property on a worldwide
basis, this would lead to confusing and possibly conflicting
overlap of international requests for assistance. The court stated
that, in this case, the US Department of Justice clearly wanted
assistance from Jersey in relation to property situate outside the
jurisdiction. It held that, generally, assistance to countries
applying to the Jersey court for enforcement of an external
confiscation order should be confined to property within the
Conflicting judgments: the real risk of conflicting orders by
the Jersey court and the courts in Switzerland would place any
trustee or person in the saisie judiciaire in a very difficult
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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