Businessman Jailed for Flagrant Contempt of Asset Freezing/Search Orders

Court orders command obedience and defying them can lead to punitive fines or even loss of liberty. In one case, a businessman who flagrantly breached asset freezing and search orders within hours of being served with them received a 12-month term of imprisonment.

A supplier of business machines accused the man of obtaining discounts on goods by fraud and sued him for $17.5 million. The supplier was granted orders enabling a search of the man’s premises and freezing his assets worldwide up to a value of $10 million. He was also required to provide details of all his assets worth more than £1,000.

However, on the very day that the orders were served on him – whilst the supplier’s representatives were in the process of conducting the search – various substantial transfers were made out of the businessman’s bank and PayPal accounts. A judge subsequently found him guilty of those and other breaches of the orders and sentenced him to 18 months’ immediate imprisonment for contempt.

In ruling on his challenge to that decision, the Court of Appeal overturned one of the contempt findings – relating to the man’s alleged attempt to hide a diamond and emerald engagement ring that he had given to his fiancée. However, it found that all his other grounds of appeal were without merit. In the light of the partial success of his appeal, his prison sentence was reduced to 12 months.

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