Jersey: Saisies Judiciaires: The Lifting Of Freezing Orders


On 29 April 2009, the Bailiff issued a judgment (the effect of which was stayed for one month) in relation to an application by Gary Stephen Kaplan ("Mr Kaplan") to discharge a saisie judiciaire which was granted in relation to his realisable property in May 2007 pursuant to the Proceeds of Crime (Jersey) Law 1999 ("the 1999 Law"). Mr Kaplan was an internet gambling entrepreneur who had built up his business over a period of some 10 years before finally floating it on the Alternative Investment Market in 2004. Mr Kaplan made a great deal of money from the flotation. The money was ultimately settled into two Jersey trusts administered by a Jersey trust company.

The gambling business was operated from outside the US but most of its customers were in the US. As is widely known, gambling in the US is strictly regulated and telephone or internet betting is unlawful in nearly all US States. In common with other actions taken against telephone and internet betting concerns operating within the US, the US Department of Justice ("US DoJ") got involved. The US DoJ charged Mr Kaplan in July 2006. He was arrested in the Dominican Republic in March 2007, extradited to the US and has been in custody since then.

In May 2007 a saisie judiciaire was granted on the application of the Attorney General on behalf of the US DoJ.

In February 2008, the US DoJ applied for, and was successful in obtaining, a Swiss order freezing the local assets. The majority of the assets, by way of value, are liquid assets held in Swiss financial institutions and real estate located in Costa Rica.


The Attorney General won all the main legal arguments on the construction of the 1999 Law and the interpretation of the various provisions contained therein. However, the judgment ultimately came out in favour of Mr Kaplan as the court found that in exercising its discretion it could not maintain the saisie judiciaire principally due to events which had occurred since the original granting. These events had made the effective operation, management and control of the assets subject to the saisie judiciaire impossible, on the part of the Viscount, the continuing trustees and the former trustee.


One of the distinguishing features of this case is the extent to which parallel civil trust proceedings have had an effect on the judgment in relation to the saisie judiciaire. These parallel trust proceedings culminated in a judgment delivered by the Deputy Bailiff on 28 January 2008.

As a consequence of the indictment laid against Mr Kaplan in July 2006, the inevitable Suspicious Activity Report made by the Jersey trust company, and the consequent breakdown in communication for fear of committing a tipping off offence, Mr Kaplan, as the then Protector of the two Jersey trusts, decided to remove the Jersey trust company. This was effected through the appointment of a corporate Protector who, in turn, ultimately appointed two non-Jersey based trustees. This was in order to facilitate the ongoing effective exercise of the Protector powers due to the fact that he was incarcerated in Missouri.

The Jersey trust company brought the civil proceedings before the granting of the saisie judiciaire on the grounds of alleged technical deficiencies in the appointments and of a fraud on a power. The granting of the saisie judiciaire by the Bailiff in May 2007, some eight months before the delivery of the judgment referred to above, clearly brought the gate down on the vesting of the assets in the additional trustees.

As we shall see later, the appointment of additional trustees has had a direct impact on the exercise of the discretion of the court in April 2009.


1. Burden Of Proof

The Attorney General and Mr Kaplan each maintained that the burden of proof for discharging or maintaining, respectively, the saisie judiciaire was on the other. The court found that it was inappropriate to talk of "placing a burden of proof" in the context of the policy objectives of the 1999 Law. The court concluded that the more appropriate test would be to consider whether it would be fair, reasonable and proportionate to maintain the saisie judiciaire, balancing all relevant considerations.

2. Construction Of The 1999 Law

A theme which ran through the proceedings was the extent to which the 1999 Law should benefit from a wide and flexible interpretation, especially where detailed points of law, which could never be expected to be covered in 'all crimes' money laundering legislation, were under consideration. The court's finding, supported by earlier findings, was that the 1999 Law should "be construed in such a way as to accommodate the widely different procedures in other jurisdictions designed to penalise the concealing or laundering of the proceeds of serious crime."

The message would appear simple – if assets look like criminally sourced funds, then they will be treated like criminally sourced funds, at least for the purposes of granting and maintaining a saisie judiciaire.


1. No Reasonable Expectation Of An External Confiscation Order Being Made

One of the requirements for a saisie judiciaire to be granted is that there are reasonable grounds for believing that an external confiscation order will be made. The prime reason for this is to ensure that a defendant's assets are not needlessly tied up in lengthy and potentially costly proceedings if the policy objective of the 1999 Law, namely to deprive criminals of their ill-gotten gains, will not be achieved.

In order to do so, the Attorney General relied on the fact that Mr Kaplan had been the subject of an indictment filed by a grand jury (an impartial panel of ordinary citizens) in the US. The indictment identified the property that the grand jury believed was subject to forfeiture – being the assets in the two Jersey trusts. Further, it was contended that he was entitled to rely on the correctness of the information set out in the letter of request and that "the presumption of regularity" under the Investigation of Fraud (Jersey) Law 1991 was equally applicable to saisies judiciaires obtained for foreign prosecuting authorities under the 1999 Law.

The court disagreed and drew a distinction between circumstances where the Attorney General himself was investigating serious or complex fraud and where assets had been frozen at the request of a foreign government. The court reviewed the indictment in detail and concluded that notwithstanding the Attorney General's apparent lack of detailed analysis as to whether there were reasonable grounds for believing that an external confiscation might be made, there were sufficient grounds.

2. The Dual Criminality Test

In broad terms, for a saisie judiciaire to be granted, the crime upon which the application is made must not only be a crime in the home jurisdiction, but also be an offence in Jersey for which a person is liable on conviction to imprisonment for a term of one or more years.

Gambling in Jersey is covered by the Gambling (Jersey) Law 1964 which clearly predates the internet. Under that law it is only in the case of a second or subsequent offence that a term of imprisonment not exceeding twelve months can be imposed. Mr Kaplan's previous conviction in 1993 and the fact that the indictment alleged more than one count involving unlawful gambling led the court to conclude that this would constitute a second offence and hence potentially lead to a term of imprisonment of twelve months.

Having established this, the court then grappled with the complexities of the indictment which was broken into three main areas:

  • RICO (Racketeer Influenced and Corrupt Organisations) offences;
  • Predicate offences of mail and wire fraud and transportation of gambling equipment; and
  • Forfeiture counts

The court, having heard at length about the intricacies of US federal law, decided to construe the 1999 Law broadly. The logic applied was that Mr Kaplan conspired with others to conduct an unlawful internet gambling business – internet gambling being unlawful by virtue of the fact that it has not been made lawful. It was not so much the offences under the gambling law which were at issue, but the allegations of a conspiracy to commit a criminal offence. The punishment for such an offence is imprisonment for more than one year.

The dual criminality test is one which has often been discussed in Jersey with much head scratching as to whether some offences which do not exist per se in Jersey (e.g. RICO offences) or which are subject to different standards of proof (e.g. the test for fraud in Jersey is different to that applied in the US version of mail fraud) would meet the test. This judgment assists in understanding the court's thinking. The court will be minded to draw a wide net when considering whether an offence in another jurisdiction meets the dual criminality test and it would be advisable to think more widely than the narrow predicate offences.

3. No Realisable Property In Jersey

The vast majority of the assets of the two Jersey trusts are located in Switzerland and Costa Rica.

Mr Kaplan argued that there was no realisable property in Jersey on which the saisie judiciaire could bite. The court, in analysing the relevant provisions of the 1999 Law, concluded that "realisable property" covered property held outside the island. Further,

the trust property was legally held by the Jersey trust company's two nominee companies, both of which are Jersey registered. The fact that underlying assets may be held outside the jurisdiction is no bar to the granting and maintaining of a saisie judiciaire.

As an interesting side note, the court agreed that the Viscount would have the ability under the 1999 Law to a) require the repatriation to Jersey of any realisable property (assuming the individual was within the jurisdiction) and b) compel a defendant to disclose his assets.

Having established there was realisable property, the Bailiff found that this was vested in the Viscount on the basis that Mr Kaplan had gifted the assets into the trust.

With respect to submissions by the Attorney General concerning Mr Kaplan's beneficial entitlement, the evidence all pointed towards the fact that Mr Kaplan was not merely the object of a discretionary power under the trust – his role was far more involved.

However, the existence of other family members as discretionary beneficiaries and the fact that there was no suggestion that the trusts were shams, made it difficult for the court to conclude that the phrase "beneficially entitled" should have a different meaning other than the ordinary trust law meaning.

A number of other grounds for setting aside the saisie judiciaire were raised including material non-disclosure and a supposed flawed warrant obtained by the US authorities.


Since the original granting of the saisie judiciaire in May 2007, a number of events took place which transformed the matrix of facts upon which it was originally based, namely:

  • The parallel civil trust proceedings which resulted in the appointment of two non- Jersey based trustees;
  • The retirement in December 2008 of the original, sole Jersey trustee
  • The resignation of the Jersey trust company directors from the underlying companies of the Jersey trusts; and
  • The freezing orders over the liquid assets in Switzerland.

The above state of affairs led the court to conclude that in maintaining the saisie judiciaire:

  1. The costs would have to be met from the public purse;
  2. There would continue to be paralysis in the management of the underlying assets;
  3. The new trustees would be unable to fulfil their fiduciary duties;
  4. The original trustee would be left in a legal no-man's land, unable to transfer the trust assets by virtue of the saisie judiciaire; and
  5. The Viscount would be powerless to exercise effective control – having the responsibility but no power under the 1999 Law.

The only downside would be that the US would lose control of the nominee companies indirectly holding the property in Costa Rica – as no proceedings had been instituted there in any event, there appeared little practical downside, even constructing the 1999 Law broadly.

Consequently, the court decided to lift the saisie judiciaire, but has stayed its decision for one month pending a possible appeal by the Attorney General.


In broad terms, the court was reluctant to allow Jersey to act as the world's policeman in providing assistance to foreign prosecuting authorities where there were significant difficulties in exercising these powers. This is even more so where there are reasonable prospects that foreign governments could take their own action in the jurisdictions in which the assets are located. Whilst there have been instances in the past where Jersey has fulfilled this role, the costs and practical implications of dealing with worldwide portfolios of assets should not be underestimated.

The case also demonstrates the increased willingness of the US authorities to pursue individuals' assets across the world. It also highlights the focus on a more profit based regime as opposed to a predominantly conviction based one. For trust and company businesses exposed to the US in sensitive activity industries (such as gambling), the risks are also elevated on a commercial and personal basis for those involved in establishing and administering such entities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.