BRITISH LAWYER, WIFE ACCUSED OF DUPING PRINCE JEFRI OUT OF $23 MILLION
In 2006 one of Britain’s highest earning barristers and his wife were accused of cheating Prince Jefri out of millions of dollars. The Times of London reported: Thomas Derbyshire and Faith Zaman are said to have plundered Prince Jefri’s fortune to buy themselves two California beach homes, $30,000 worth of jewellery in a day, $33,000 of furniture and $2,800 of electronic appliances. Derbyshire, aged in his 40s, is an expert specialising in the fields of fraud and money laundering. Court documents, seen by The London Times, accuse the couple of utterly betraying the Prince’s confidence and trust in “wanton, reckless and outrageous ways”. The Prince’s total alleged losses come to $23 million. The pair are understood to be strenuously denying the claims. [Source: James Doran, Dominic Kennedy, The Times of London, December 10, 2006 \^/]
“According to the documents, Prince Jefri first met the couple in 2004. He was embroiled at the time in a long-running feud with the Sultan over $3 billion he was accused of embezzling. The Prince agreed to their proposal that they serve as his legal advisers and gave them power of attorney. But then, he claims, they set about transferring his assets to financial entities linked to themselves. His complaint, filed in New York, blames them for “numerous acts of theft and deception, self-dealing, embezzlement and fraud, all designed to benefit themselves and their family members, to the severe detriment of their clients and employers. The words ‘faithless servants’ do not do justice to the scope of their perfidy.” They are “little more than confidence artists posing as English lawyers”. \^/
“The couple are accused of persuading the Prince to sell his 23-room mansion on the desirable North Shore of Long Island for $12 million, although its true value was $25 million. He believes the couple to have been behind the company buying the property, but says that they omitted to disclose this. Zaman, 30, is said to have directed Prince Jefri’s son, Prince Bahar, to execute a sale deed. No sales proceeds reached Jefri, he says. Another time, receiving a $5 million cheque made out to a company owned by Prince Jefri, Zaman is said to have created a cloned firm with a similar name and paid the money to that. The couple allegedly used the money to buy two properties worth a total of $7.1 million at Manhattan Beach, California. \^/
“Zaman was appointed managing director of the Prince’s 55-storey Palace Hotel in Midtown Manhattan. She hosted the opening of Gilt, its restaurant. At first, the document claims, she occupied a hotel apartment but is said to have told staff that she did not like it and moved into the $10,000-a-night triplex suite complete with private lift and roof garden. Her mother and brother had long free stays, it is claimed. She allegedly hired her brother, Arzi Zamarni, to be “operations manager”, a position with no defined duties but an exorbitant salary. For the first ten months of this year, she is said to have misappropriated $750,000 using a corporate credit card. Derbyshire allegedly charged $280,000 to his card and Zamarni $95,000 to his. \^/
“When the Palace Hotel decided to install plasma televisions, Zaman allegedly insisted that they were bought through a London company. An order for 1,150 TVs and equipment costing $4.1 million was placed. Delivery charges added $230,000. The Prince says no TVs arrived and that the company’s address is a mail box. Zaman was fired around November 7. Two days later, at 4am, she returned to the hotel and allegedly purloined two boxes believed to contain the Prince’s private documents. He is seeking damages and the rescinding of certain transactions. Other individuals and corporations are also being sued, but the suit describes the couple as “principal architects of the fraud”. Derbyshire declined to comment. \^/
“Allegedly charged to corporate credit cards: Faith Zaman: Beauty treatments; cosmetics; vitamin pills; cinema trips; clothes at adidas, Jockey, Vans, French Connection, Polo, Armani, Versace, Roberto Cavalli, Dolce & Gabanna, Hugo Boss and, DKNY, Harley Davidson, Timberland and Footlocker; jewellery; DIY materials; furniture; 30th birthday. Thomas Derbyshire: cosmetics; tattoos; clothes from Reebok, Jockey, Saks, Faconnable, Levi’s, North Face, Dino Baldini, Hot Leathers; jewellery; electronics; sunglasses; charitable donations; motorcycle accessories; house renovations.” \^/
British Lawyer Meets Prince Jefri Through Tony Hairdresser
On how Derbyshire and Prince Jefri began doing business, Mark Seal wrote in Vanity Fair, “It began, as fairy tales often do, with an unforeseen messenger, a London hairdresser named Jay Maggistro, who was something of a celebrity within the London jet set. “From his gold Cartier watch (£35,000, ‘a present from my brother’) to his £1,000 Gucci suit, the 38-year-old entrepreneur’s style is pure Eurocash,” wrote one London newspaper in 2002. He met the prince after answering the phone in his North London salon near closing time one day. “Can you come to cut a boy’s hair on the Bishop’s Avenue?” the caller asked; that was such a tony address that the hairdresser went in person. It was Prince Bahar he had been called about, but within a short time he was styling Prince Jefri too. According to Derbyshire, “Jay became the royal hairdresser when Jefri was Brunei’s minister of finance, and he flew Jay all over the world.” [Source: Mark Seal, Vanity Fair, July 2011=]
“As Prince Bahar grew, he and his hairdresser forged “an unbreakable friendship,” says Derbyshire. They eventually opened a London hotel, restaurant, and club together, No. 5 Cavendish Square. When the partners were sued in a civil matter, they turned to a rising barrister they had met at No. 5, Thomas Derbyshire, who specialized in cases involving money-laundering and fraud and who was then representing Terry Adams, one of Britain’s most notorious gangsters. Derbyshire won the case for Bahar and Maggistro, worth $1.6 million, he says, and they were impressed enough to mention him to the Boss, as intimates call Prince Jefri.=
“Celebrating a court victory with fellow barristers in a private dining room at No. 5 one evening in 2004, Derbyshire was interrupted by a knock on the door. “Prince Jefri would like to meet you,” said Maggistro, and Derbyshire says he entered a dimly lit drawing room where the prince was holding hands with Micha Raines, whom he had met in a Las Vegas hotel, and with whom he would soon have a child. After five minutes of small talk, the meeting was over. “I met Prince Jefri today,” Derbyshire told his 27-year-old fiancée, Faith Zaman, who had recently been laid off from a job at an investment bank. Within a few days a call came from Maggistro: the prince wanted to see Derbyshire. “And bring Faith,” Derbyshire says Maggistro added. The next day the hairdresser picked up the couple in a convertible Bentley Jefri had given him and drove them to St. John’s Lodge, in the Inner Circle of Regent’s Park, which, next to Buckingham Palace, is the grandest residence in London. After clearing intense security, they were escorted into a vast hall and then into a dining room with a table that could seat 50, where a battalion of servants brought out drinks and silver trays of appetizers. Prince Jefri and Micha Raines greeted them. =
Helping Prince Jefri Sell his Undisclosed Assets
“At the first meeting with Mr. Derbyshire and Ms. Zaman at St. John’s Lodge, Jay [Maggistro] and I explained the difficulties I was having with the B.I.A., with Joe Hage [Jefri’s previous attorney] and The New York Palace Hotel,” Jefri wrote in an affidavit. [Source: Mark Seal, Vanity Fair, July 2011=]
Mark Seal wrote in Vanity Fair, “Derbyshire, Zaman, and Richard Chalk agree on Jefri’s situation at the time of his initial meeting with the couple. Frustrated over still being unable to get full disclosure of his assets, the B.I.A. was reviving proceedings against the prince, refreezing assets in his name, leaving him “without access to monies that were in his direct accounts,” says Chalk. “So that starts the process,” he continues, meaning Jefri’s by then well-known habit of accessing undisclosed accounts in companies that weren’t under his name but were under his control. He had to sell real estate, art, diamonds, cars, and other possessions that hadn’t been disclosed to the B.I.A. and the sultan and place the funds in his secret accounts in order to support his exorbitant lifestyle and pay his far-flung lawyers. It was an intricate game that involved moving billions of dollars among individuals, accounts, and companies around the world—a game that, Jefri’s attorney Geoffrey Stewart insists, Zaman and Derbyshire would come to orchestrate. According to Stewart, any financial trickery Jefri was charged with, the barrister couple “were at the center of it.”
“Several more meetings ensued, which Jefri always insisted be “four-eyes meetings,” meaning face-to-face. Eventually he was ready to engage the couple. His life, he said, was run by a tangle of teams of lawyers around the world, defending him against the B.I.A. and the sultan’s ongoing campaign to “crush” him. Because there was no coordination among these legal teams, he was concerned that he was paying too much for duplicated work. He wanted Derbyshire to act as his lead attorney, liaise with his other lawyers, and coordinate his defense against his brother and the B.I.A. As for Zaman, Jefri would later insist that he didn’t initially intend for her to be part of his legal team at all, but he named her a director of some of his companies, responsible for everything from hiring to paying the bills. In short, the couple’s mandate, they claim, was to streamline and obtain an accounting of Jefri’s empire of businesses—a difficult process, since most of them were registered in the names of persons or companies acting on his behalf, “barriers of protection that would make it hard for his brother to seek to take the assets from him,” Derbyshire alleges. =
“Prince Jefri was incapable of doing any of this himself,” says Chalk. “It was all done through his legal advisers. They’re the ones who came up with the ideas and schemes. I mean, that’s basically what Tom and Faith were doing for him. They were helping to try and see which assets could be utilized for the purpose of raising funds—which weren’t caught by the freezing injunction.” =
Working for Prince Jefri
Mark Seal wrote in Vanity Fair, Derbyshire’s and Zaman’s “first assignment was to fly to New York and review the books of Jefri’s most important asset, the New York Palace hotel, which was then turning an annual profit of $50 million, and determine why the invoices to the hotel from a company they would later learn Jefri controlled—averaging between $550,000 and $1.5 million a month—had suddenly stopped being paid. Jefri had registered the hotel in a limited partnership in New York owned by two Delaware corporations, which in turn were owned by a third Delaware corporation, followed by two shell corporations in Labuan, the tax haven off the coast of Malaysia, and finally ending in a Malaysian trust company. But now the hotel was under siege, as Jefri outlined in his affidavit: its directors had passed an order preventing their removal by him, and a former director had filed suit challenging Jefri’s very ownership of the New York Palace and Hotel Bel-Air. “I thought there was no time to lose,” Jefri wrote of sending Derbyshire, Zaman, and Jay Maggistro to the New York Palace.[Source: Mark Seal, Vanity Fair, July 2011=]
“The day the couple left for New York, they and Maggistro signed a letter that would later be repeatedly shown in the New York courtroom. In order to give them full and absolute authority to act on his behalf, the prince granted them power of attorney. “Looking back at it now, I think he gave us power of attorney so that at some stage in the future he would be able to turn around and deny knowledge and involvement in things he’d done,” says Derbyshire. (Prince Jefri’s lawsuit claimed that it was Zaman and Derbyshire, not he, who suggested they be given power of attorney in order to work most effectively on his behalf. Maggistro declined to respond concerning specific issues of the case.) =
“Meanwhile, Derbyshire often met with Jefri’s legal teams. “I was effectively a conduit of information between the different lawyers in all the different jurisdictions around the world,” he testified in New York, adding that because this information frequently had to do with the prince’s frozen and hidden assets, it was necessary to deal with those lawyers in person. When asked on the witness stand how many lawyers he had met or retained for the prince, Derbyshire disgorged a startling list of attorneys in every conceivable corner of the globe. =
“Derbyshire would routinely rush to the airport, where a private plane would fly him off to wherever Jefri had a lawyer, in order to sign papers, retrieve documents, or receive further instructions. Many of Jefri’s lawyers refused him further service, saying they had not been paid or they had been paid with tainted funds—proceeds from the sale of assets that the sultan and the B.I.A. had not seized. (According to Stewart, “Some attorneys claimed that they suddenly realized that funds they had been receiving and depositing for years were under injunction by the freezing order—but wouldn’t return any of the money.”)=
“Next assignment: representing the prince before the Brunei supreme court. Their first visit was in late 2004. The B.I.A. had filed a motion to force Jefri to comply with the settlement agreement he had signed back in 2000 and return all property. Because only a member of the British Queen’s Counsel can be heard in Brunei courts, and because the Derbyshires contend that by then many of Jefri’s lawyers refused to work for him, owing to not being paid, the couple enlisted Sir John Nutting, a friend of Prince Charles’s, to travel with them to Brunei. Nutting won an adjournment of the sultan’s case against Jefri until the following February. (In 2006, the case was decided against Jefri and in favor of the B.I.A.) “The family had a rule: ‘We don’t come to you, you come to us, however inconvenient that may be,’ ” wrote Zaman in an affidavit. She and her husband were soon living out of suitcases, flying to wherever the prince, his sons, or his lawyers ordered them. By February 2005, Jefri had regained full control of his biggest asset, the New York Palace, and installed Zaman to represent his interests there. =
“Did their duties include devising ideas to help Jefri evade freezing orders and manufacture cash? “No,” says Zaman. “Our job was to work with a group of Jefri’s advisers and carry out Jefri’s instructions We consulted with 50 to 70 independent advisers in various jurisdictions over the years.” Zaman’s job as managing director included dealing with the prince’s family—four wives and 18 children—and their friends, few of whom carried cash or credit cards and, even if they did, often preferred that their charges go on the company’s or Zaman’s credit cards. Zaman goes through a list of costly items: $140,000 in flights Princes Hakeem and Bahar charged on her credit card after getting it from her assistant without her knowledge (according to Stewart, Hakeen and Bahar “didn’t know Faith had a credit card. Prince Jefri never knew she had a credit card, either”); a $28,000 Cartier watch Zaman bought for one of Bahar’s girlfriends; a $200,000 diamond-encrusted watch from Jacob & Co. (“My wives and children do not require such items to be purchased by either Ms. Zaman or Mr. Derbyshire,” Jefri wrote in an affidavit.) =
Working for Prince Jefri Without Pay
“We agreed that we would work for the same basic retainer that he paid his previous legal adviser, a British barrister, which he calculated would be around $8 million a year, plus expenses,” says Derbyshire, adding, “He got two people for the same price, and he was delighted with it.” (Geoffrey Stewart’s response according to Vanity Fair: Prince Jefri insists that the payment was $2 million apiece for the two lawyers, including expenses, and that it was Derbyshire’s idea to include Zaman, who Jefri claims was not a practicing barrister at the time—“she was a legal advisor to me more than anything else.”) [Source: Mark Seal, Vanity Fair, July 2011=]
“He told us he could not pay us immediately, because he didn’t have a bank account that wasn’t frozen,” says Derbyshire. “He had no access to money himself. He had no credit card, no checkbook, no liquid assets, and he said he relied upon the generosity of family members and friends who supported him financially. I just thought, This is the most ludicrous thing I have ever heard. Because he was living a billionaire’s lifestyle. The staff alone would be a quarter-million dollars a month.”=
Mark Seal wrote in Vanity Fair, “Zaman claimed in an affidavit she worked a full year without receiving any of her $4 million annual salary, although Jefri would write in an affidavit that he believed both Derbyshires had received payment for services. Derbyshire contended that he worked for more than seven months before receiving his first payment, which was $660,000 in expenses instead of $4 million in salary, and by then, he claims, he had spent approximately $600,000 of his own on travel expenses for himself and lawyers he had recruited to travel with him to Brunei. At one point, according to Derbyshire, when Jefri said he was desperate for untainted funds, Derbyshire even returned $600,000 that the prince had reimbursed him for expenses, so that Jefri could pay other lawyers who were threatening to stop their work in defending him against the sultan and the B.I.A. (Jefri disputed this in his affidavit. “I have no idea about how many law firms [Derbyshire] contacted,” he wrote. “I do not recall him mentioning having any difficulties in retaining solicitors or any problem with clean funds.”) =
“Why did Derbyshire and Zaman continue to work without payment, as they claim? First, they say, because they felt sure payment would eventually come. Second, they say, because they believed what Jefri told them: the sultan had reneged on the lifestyle agreement, and the properties were rightfully his. =
Running the New York Palace Hotel for Prince Jefri
Mark Seal wrote in Vanity Fair, :In November 2005, as part of Zaman’s contract with the New York Palace, she claimed in her affidavit, Jefri gave them a 17-year lease on a 2,800-square-foot apartment on the third floor of the hotel, which rented as a suite for $20,000 a night. The prince gave the apartment to them rent-free for the first five years, they say. After that, the charge would be $500 a month, with an option to renew for 51 years. Should the sultan ever be successful in taking over the hotel, he would have to deal with them for the rest of his life. They also contended that the prince gave them a second lease, also at a low price, for the Maloney & Porcelli steak house on the hotel’s ground floor, on East 50th Street. (Prince Jefri flatly denied giving the Derbyshires the two leases. “I never even knew of the existence of the third-floor apartment at The New York Palace Hotel,” he wrote in an affidavit. Of the couple’s contention that Prince Bahar signed both leases, Jefri insisted that Bahar didn’t recall signing either one. “Although I understand that he often signed whatever was put in front of him by Ms. Zaman,” he wrote in an affidavit.) [Source: Mark Seal, Vanity Fair, July 2011=]
“In February 2006, John Segreti, the managing director of the Palace, dropped dead of a pulmonary embolism. “I need someone who is loyal,” Zaman recalls Jefri saying. According to Jefri’s lawsuit, “Even though she had no experience in managing hotels or business operations, after interviewing a few candidates, [Zaman] informed Prince Jefri and Prince Bahar that there were no candidates as qualified as she was and recommended that she be appointed the hotel’s managing director.” (Zaman’s response: “Prince Jefri never let any person dictate to him how he should manage his assets. He’s a prince in a dictatorship, used to getting his own way. He made me the general manager because he wanted someone he could trust who wouldn’t kick him out of the hotel, as had happened to him before.”) =
“Relying on Zaman’s position as a fiduciary to him, Prince Bahar appointed her as Managing Director of the Palace Hotel in late March 2006,” according to Jefri’s lawsuit. She claimed her annual salary included 5 percent of the hotel’s gross operating profit, a car allowance of $100,000 per year, and free use of the company credit card for personal expenses, and she showed Prince Bahar’s signature on her employee agreement. (“Ms. Zaman did not inform [Prince Bahar] that she was to receive 5 percent of GOP,” Jefri later wrote in an affidavit, insisting that Bahar didn’t fully read the agreement before signing it.)=
“Zaman handled her duties well, by many accounts, maximizing occupancy, improving profits, and, most important, approving invoices for “consulting fees” of approximately $1.3 million a month submitted by a company called Argent International, which she was told was owned by Prince Bahar. She claims in an affidavit that she paid consulting fees to Princes Hakeem and Bahar of between $500,000 and $1.5 million a month. (Stewart’s response: “Much less. I want to say it was more like $100,000 a month. It only happened for two months. The reason was there was no money.”) =
How Prince Jefri Gained Access to Undisclosed Assets
Mark Seal wrote in Vanity Fair, “In repossessing the Brunei properties of Jefri and his family, the sultan had finally gotten the upper hand. According to Derbyshire, Jefri felt he had to strike back, hard, by cashing in his biggest assets, the New York Palace and Hotel Bel-Air. Geoffrey Stewart says Zaman and Derbyshire pushed Jefri to sell the hotels and set up “dummy corporations” to hold the money, from which Zaman would receive a commission. Jefri acquiesced to selling the hotels, although he believed the freezing order would prevent it. (Zaman denies that she would have received a commission, saying that any commissions on the sale would have gone to members of Jefri’s family.) [Source: Mark Seal, Vanity Fair, July 2011=]
As Zaman and Derbyshire pushed forward, they say, little by little the prince showed them his hand. “He was [Brunei’s] finance minister for a reason: he is a very, very smart man,” says Zaman. “And he had hidden assets so well that the sultan, with all of his resources and all of his private investigators, couldn’t find [them].” The assets were registered in layer upon layer of “bearer shares,” according to Derbyshire, with “nominee directors” in jurisdictions around the world. Derbyshire adds, “Eventually we gained his trust, and then he opened up and we got to know everything: the art vaults full of paintings, the jewelry, gold, diamonds, bullion, and secret bank accounts.” =
“In the New York court, Derbyshire testified on Jefri’s plan to sell the hotels. The prospective buyer was Ty Warner, the Beanie Babies billionaire. Warner particularly wanted Hotel Bel-Air, but it was a trinket in Jefri’s world, priced at only $200 million (and returning only $3 million in annual profit), whereas the Palace was priced at $600 million and had a $50 million profit. (Through an executive at his company, Warner declined to comment.) Warner agreed to Jefri’s $800 million asking price for the two properties, which would have netted the prince $575 million after taxes. But one hurdle remained: where to bank the money? The sale would be a breach of the Brunei freezing order, which Derbyshire says he explicitly explained to Jefri, thinking that the deal would be off. (Stewart says that Jefri received no explanation from Derbyshire: “Prince Jefri was of the view that selling it would be tough, but if Derbyshire could close such a deal then Jefri was fine with it.”) =
“In September 2006, however, the prince summoned Derbyshire and Zaman to a four-eyes meeting in his Place Vendôme residence. They were joined by two bankers from UBS Zurich. It was agreed that one of them should “open an account at UBS Zurich to receive the $575 million, the sale proceeds, but [the banker] wasn’t confident that UBS wouldn’t treat those funds as being captured by the Brunei freezing order,” Derbyshire testified. “And they wanted a written opinion from me.” (Stewart says the UBS Zurich account had been disclosed to the B.I.A., and the B.I.A. had also heard rumors of the impending sale of the hotels. According to Richard Chalk, “We wrote a warning letter [to Ty Warner] that you ought to be aware that this is beneficially owned by the B.I.A. and there’s a freezing order in place. And that really put the kibosh on it.”) Derbyshire continued: “So I was asked to give a written opinion indicating that there were no court orders in existence anywhere in the world which affected Prince Jefri or the sale proceeds. And I refused to do it.” (According to Stewart, “No such request was ever made.”) Why didn’t they inform the court or anyone else about what they saw as Jefri’s alleged duplicity? They say they still felt they were under attorney-client privilege. So they pressed on to see his case through before the Privy Council in Great Britain, which would rule against Jefri in November 2006 on the various allegations the sultan and the B.I.A. had leveled against him. =
“In September 2006, the B.I.A. obtained from the Brunei court transfer orders for the remainder of Jefri’s major assets, including the New York Palace. On October 23, the B.I.A. sent a letter to Zaman informing her that the B.I.A. was now the hotel’s legal owner and that any member of management would be held liable for any payments made outside the ordinary course of business. That month, Zaman claims, she was presented with three invoices for “consultancy fees” from what she says she now knew was Jefri’s company, Argent International, for a total of $3.6 million. In the past, Argent invoices had been paid “immediately,” says Zaman. But now, she adds, concerned that Jefri would attempt to “asset-strip” the hotel before the B.I.A. could actually take over, she refused to pay the invoices and says she told Jefri and Prince Bahar why. “They were livid with me and told me that unless I acted in accordance with their instructions, I would not only lose my job, but they would ruin me by destroying my reputation so that I would ‘never work again,’ ” she wrote in an affidavit. Prince Bahar eventually authorized the payment. (Stewart denies that Jefri and his son threatened to ruin Zaman: “That’s a total fabrication that they were livid with her.”) =
Getting Fired and Sued by Prince Jefri
Mark Seal wrote in Vanity Fair, “On November 7, 2006, Zaman and Derbyshire were summoned to Paris, where Jefri said he was “terminating” them, effective immediately. Derbyshire testified that Jefri had said it was nothing personal. He just wanted new representation. “It was very nice to know you,” he said. “I hope you intend to pay me the fees we’ve agreed,” replied Derbyshire. By then, he claims, his outstanding fees exceeded $10 million, and he and Zaman were owed hundreds of thousands of dollars in expenses. According to Derbyshire, Jefri said he intended to pay in full, as soon as “funds become available.” They signed the termination documents, after which, Derbyshire told the court, “we were politely asked to leave.” [Source: Mark Seal, Vanity Fair, July 2011=]
“Derbyshire claimed in his affidavit that, prior to their dismissal, “we were very concerned about what we had gotten ourselves into. It dawned on me that I had worked for the Prince for over two years for very substantially less than I had been promised, while Prince Jefri was telling me he had no money to pay me and yet all along he had been sitting on an illicit fortune.” ‘I realized I may not have been told the whole truth about certain things by Ms. Zaman and Mr. Derbyshire,” Jefri claimed in an affidavit. Still, he didn’t think “anything very serious was wrong,” and the termination was amicable. Later that same November, though, after the couple’s departure, Jefri claimed in an affidavit, he discovered that two payments totaling $1.4 million had been transferred from the New York Palace to a Wachovia Bank account, which neither hotel officers nor Prince Bahar knew anything about. Jefri was soon told by the assistant to the managing director that “Ms. Zaman had asked her to research banks with a branch in the Cayman Islands,” where the funds were banked in Zaman’s name. The prince also soon discovered that his Long Island estate “had been sold to a company which appeared to have been linked to Ms. Zaman,” as well as “misuse of credit cards” and other financial machinations. All of these accusations, Derbyshire and Zaman contended, were the prince’s own maneuverings to pay his lawyers and his lifestyle expenses. =
“If Jefri was going to blame Derbyshire and Zaman for mismanagement, which now they say they both felt likely, they would need proof that Jefri had approved the documents concerning the deals they had orchestrated on his behalf, all of which bore his signature or Prince Bahar’s. “In particular, we were concerned that documents which might exculpate us from any future allegations of wrongdoing … might simply disappear,” Derbyshire wrote in an affidavit. Zaman flew to New York, and Derbyshire flew to Los Angeles. Landing at midnight, Zaman went straight to the Palace and collected her belongings, even though hotel officials had called her to say she couldn’t remove anything from her office unless Jefri’s London attorney was present. A hotel video of Zaman rolling out two boxes at four A.M. was shown at the trial. In his affidavit, Prince Jefri maintained that it showed Zaman “tricking her way into the New York Palace,” retrieving the boxes of prohibited material. Zaman, meanwhile, claimed that the two boxes contained personal effects, most notably an urn holding the ashes of her unborn son, whom she had lost to a miscarriage during her time in the prince’s employ. =
“Derbyshire and Zaman were eventually able to produce documents with the signatures of Prince Jefri or Prince Bahar on them that seemed, to some extent, to exonerate the couple. Zaman alerted the hotel’s bankers about her concerns that Jefri would asset-strip the hotel before the B.I.A. could fully take over. The B.I.A. obtained a temporary restraining order against the prince in a New York court. On December 1, 2006, Jefri filed a complaint in New York charging the Derbyshires with “pervasive fraud, breach of contract, conspiracy, and criminal enterprise.” He launched a simultaneous assault in the international media, hiring a London public-relations firm to publicize his lawsuit.” =
Trial of Lawyer, Wife Accused of Duping Prince Jefri Out of $23 Million
Mark Seal wrote in Vanity Fair, For six weeks, starting November 8, 2010 in the Supreme Court of the State of New York, in Manhattan, the two sides in a most unusual trial presented equally outlandish stories. The plaintiff, Prince Jefri, who has probably gone through more cash than any other human being on earth, tried to convince the jury that he was extremely naïve when it came to financial matters. He claimed that he never signed checks and that his business affairs had been managed entirely by four private secretaries and a coterie of advisers and attorneys, who ran his estimated 250 companies and all his other concerns. By casting himself in that light, Prince Jefri, 56, hoped to make the jury believe that two of his own lawyers, Zaman and Derbyshire, the attractive British husband-and-wife team sitting at the defense table, had ripped him off to the tune of a reported $23 million. This wasn’t necessarily a bad strategy, because soon it seemed that only a simpleton would not have noticed the blatant chicanery he was accusing these attorneys of committing. [Source: Mark Seal, Vanity Fair, July 2011=]
“Numerous acts of theft and deception, self-dealing, embezzlement and fraud, all designed to benefit themselves and their family members,” read the prince’s original complaint, filed in federal court in December 2006. He charged the couple with arranging a fraudulent sale of his mansion on Long Island’s exclusive North Shore at a cut-rate price, with depositing a $5 million check paid to one of his companies into the account of a “cloned” company under their control in the Cayman Islands, and with putting improper personal expenses—totaling more than $650,000—on company credit cards. After the prince installed the then 29-year-old Zaman as managing director of one of his hotels, the New York Palace, in 2006, she proceeded, according to him, to award herself an exorbitant contract ($2.5 million a year), sign herself to dirt-cheap, long-term leases on a luxury apartment in the hotel and the steak house on the ground floor, and hire her inexperienced brother as a systems analyst. “The words ‘Faithless servants’ do not do justice to the scope of their perfidy,” read Prince Jefri’s complaint. =
“The lawyers for the defendants attempted in turn to show the jury that Jefri was not a financial simpleton at all but “an unabashed and unreformed serial liar,” charged with stealing $14.8 billion from Brunei when he served as its finance minister, from the mid-1980s to the mid-1990s. The defendants claimed that he had used his stolen billions to finance a 10-year orgy of extravagance and deceit, which culminated only when his brother the Sultan of Brunei set out to recover the fortune Jefri had supposedly hidden. The lawyers argued that Zaman and Derbyshire had stolen nothing, and that the prince’s charges against them were part of an elaborate scheme to funnel money through them in all manner of nefarious ways to fuel his insatiable need for cash. The defense lawyers also claimed that Jefri had stiffed Zaman and Derbyshire for millions in salaries and travel expenses, then fired them when they finally refused to comply with his increasing illegal demands.” =
“His modus operandi has been to try to ‘salt away’ or realize assets which are frozen, then try to blame his advisors if he is caught out,” Thomas Derbyshire wrote in an affidavit in December 2006 in response to a supplemental U.K. lawsuit Jefri filed to freeze the couple’s assets. “I regret to say that my wife and I have been drawn into this web of deceit.” The federal suit was dismissed, but Jefri immediately refiled in New York State. Four years passed, with detours through courts in London and Delaware, before a jury heard the case in New York City. Order in the Court.” =
Details of Prince Jefri’s New York Trial
Mark Seal wrote in Vanity Fair, “When the trial began, in Courtroom 242 of New York Supreme Court, those in the know assumed that the louche secrets of Prince Jefri’s boundless excesses would finally come to light. However, Judge Ira Gammerman soon decreed that the case was not about the prince or his extravagant lifestyle but strictly about whether Zaman and Derbyshire had stolen money from their client. The 81-year-old judge was a well-known veteran of the courts. He had presided over Woody Allen’s 2002 civil case against his former producer Jean Doumanian, and when Allen attempted to respond to a question with a rambling answer, Gammerman interrupted him midsentence, barking, “Stop talking I’m the director here.” Now, slouched behind the bench, he surveyed a surfeit of lawyers in his courtroom: nine attorneys from blue-chip firms on each side, getting hourly fees of up to $1,000 apiece, all paid by the Sultan of Brunei. The sultan was picking up not only his brother’s legal fees but also the Derbyshires’, owing to their role as officers of Prince Jefri’s Delaware-based entities, which provided indemnities and paid legal fees in work-related claims. “It’s a lawyer’s dream, but not good for the system,” one attorney told me, adding that the legal fees on the case were then up to $100 million. [Source: Mark Seal, Vanity Fair, July 2011=]
“Why Prince Jefri’s family would spend $100 million to sue two lawyers for taking $23 million in graft—“chump change for the sultan,” as Gammerman put it from the bench—was a mystery in itself. Most people believed that the sultan was running the show, and that Jefri had been forced to testify as punishment for dragging his family through years of embarrassment. However, Richard Chalk, the B.I.A. lawyer who attended the trial, said that it was all about recovering assets. “There are three things of significant value,” he said, enumerating back salaries (which, in Zaman’s case, included 5 percent of the gross operating profit of the New York Palace during her year as managing director) and the couple’s leases on the hotel’s private apartment and steak house, which all together Chalk valued at almost $50 million. If Jefri were to win, Chalk said, the B.I.A. would “go after [Derbyshire and Zaman] for everything, and we’ll be entitled to reimbursement of legal fees.” (Zaman’s and Derbyshire’s legal costs alone would exceed $30 million.) =
“Before the trial began, the defense had released photographs to the press of sculptures Prince Jefri had commissioned from J. Seward Johnson for $800,000, allegedly portraying the prince and his fiancée at the time, Micha Royale Raines, in the throes of sex. (One of the prince’s lawyers insists that the statues were meant to depict an anonymous couple, not Jefri and Raines.) An infuriated Judge Gammerman promptly issued a gag order, forbidding attorneys and witnesses to speak to reporters. Worse still for the defense, the judge pronounced that “this case is not about the relative wealth of the people. It’s not about lifestyle, it’s not about sex. It’s about the claim that the two lawyers breached their fiduciary obligations … and I’m going to limit the evidence to that issue.” =
On the sex statue and lifestyle issues, the Daily Mail reported” “In court filings lawyers for Jefri asked the judge to bar photos of the X-rated statues from the jury. 'Jurors easily could be offended by [their] erotic nature' and 'express their anger as prejudice against Prince Jefri,' his lawyers claim in the filing. In addition to photos of the statues, the playboy prince wants details about his private life barred from the courtrom, including his many wives, estates, his harem and more. 'As a Moslem, Prince Jefri was entitled to have multiple wives and families, and he did so,' his filing says. 'However, polygamy is offensive to many Americans, and trial testimony about Prince Jefri’s personal life may be prejudicial to him.' On Thursday a Judge Ira Gammerman issued a gag order to everyone involved in the real estate trial. The prince's lawyer, Jeff Stewart, had complained about his opposing lawyer, Mark Cymrot, the New York Daily News reports. 'He passed out photographs [of the erotic statues] in the hallway,' Stewart alleged. [Source: Daily Mail, November 6, 2010]
Seal wrote: “Gammerman kept a tight rein on the proceedings, blaring at attorneys and witnesses whenever they tried to introduce personal evidence about the prince, “Stop talking! When I talk, nobody else does!” He interrupted witness after witness if they attempted to elaborate after a mere yes or no, shouting, “That’s the answer!” In the end, what had been expected to be a trial of shocking revelations devolved into a dry procedural, its 22 witnesses reduced mostly to short answers. “How do you greet your father when you see him?,” Jefri’s youngest son by his first wife, the portly Prince Bahar, 29, was asked. “Kiss his hand,” he replied. Although Bahar had the title of president of the New York Palace hotel and had signed off on many of the contracts and leases the defendants were accused of wresting from his father, he testified that he had only “skimmed” the documents and would sign whatever Zaman placed in front of him. “Shopping, restaurants, enjoyed life,” he replied when asked how he had spent his time while performing his seemingly minimal duties in New York. During his two days on the witness stand, he answered “I don’t remember” to an estimated 285 questions. =
“When defense attorney Mark Cymrot attempted to discredit the characterization of Jefri as a business neophyte by showing a slide of a diagram he claimed documented Jefri’s blinding constellation of holdings—including 250 companies, seven hotels, and 150 residential properties in 12 countries—the judge went ballistic. “Turn that off!” he boomed. “That’s a complete violation of my instructions!” The defense finally reached its limit when attorney Peder Garske, questioning Zaman, was repeatedly interrupted and muzzled while asking about her personal background. When Garske dared to shoot back, “May I represent my client?,” Gammerman exploded. He instructed the jury to leave the room and threatened to place a court officer behind Garske in order to restrain him if he didn’t toe the line...The trial dragged on for six weeks, giving rise to more questions than answers. =
Prince Jefri Appears in a New York Courtroom But The Decision Goes Against Him
Prince Jefri appeared briefly on the witness stand in the New York trial. Mark Seal wrote in Vanity Fair, “I studied the diminutive prince on the witness stand, with his dark business suit, swept-back hair, and copper complexion. As he testified—for the first time in a courtroom—there was no hint of the high-flying Jefri whose well-publicized expenses had once been estimated at $50 million a month. In his place was a rather ordinary man, shy and uncomfortable, reduced to sharing courthouse hallways with reporters and being chaperoned by a representative of the sultan. “Good morning, Prince Jefri,” I said to him every day. “Good morning,” he always replied. Once, he asked me about the Macy’s Thanksgiving Day parade. [Source: Mark Seal, Vanity Fair, July 2011=]
“In his testimony, he gave only the briefest answers. “I think so,” he responded in a falsetto voice when asked if he had attorneys spread all over the world. “Just visit there,” he said to describe his duties at a Hong Kong shipping company, one of the many concerns from which he received a salary. “There is a lot,” he answered when asked how many companies were in his name. “I own them; I do not run them,” he added. “So who ran the companies?” he was asked. “Professional lawyers that I appointed.” =
“In stark contrast to the subdued prince were the defendants: Zaman, a 34-year-old, effervescent beauty, her fine figure packed into smart business outfits, and her husband, 43, who spoke with a Liverpool accent and appeared almost every day in a different bespoke suit and silk pocket foulard. Losing this case would bankrupt them and destroy their reputations. If the jury found for the prince, the attorneys representing him would seize everything they owned. Nevertheless, they smiled, laughed, shook their heads at things they didn’t agree with, and seemed ready and eager to get on the stand and tell their story. Someone had to be lying, and for weeks the jury tried to decide who that was. “In its way, this case begins like a fairy tale,” Jefri’s lawyer Linda Goldstein, a fast-talking whippet of a New York City litigator, told the jury in her opening argument. “Once upon a time there was a prince. His name was Prince Jefri Bolkiah.” =
“Once this convoluted case was handed over to the jury, in October 2010, they returned after a scant three hours, surprising everyone not only by the brevity of their deliberations but also by their verdict: they found for Zaman and Derbyshire on all charges. “I don’t think any of the parties are really innocent, actually,” one juror told me. “I think everybody was lying to some extent.” But the jury didn’t buy Prince Jefri’s depiction of himself as a financial neophyte. “There was no real proof that he didn’t know what was going on and he didn’t approve these dealings,” the juror said. Another juror remarked of Jefri and Prince Bahar, “To me they looked like Hollywood actors, trying to show us that by being royals they were fooled.” The jury awarded Zaman and Derbyshire $21 million in back wages and damages and allowed the couple to walk away not only with their money but also with their reputations intact. However, the case is far from over. According to Geoffrey Stewart, Prince Jefri is appealing. =
Prince Jefri as a Man in Debt
Mark Seal wrote in Vanity Fair, “In late April 2008, a New York court officially transferred control of what was believed to be Prince Jefri’s last major asset, the New York Palace, to the B.I.A. After Jefri surrendered what he contended were the rest of his diamonds—five stones worth approximately $200 million—and a hundred paintings, his 10-year odyssey had finally come to an end. (According to Stewart, “He’s a proud man, and he was reduced later on to borrowing a lot from old friends. He borrowed £2 million from [his first wife,] Jefrida. He borrowed money from his daughter Hamida He’s been living on borrowed money for a long time.”) [Source: Mark Seal, Vanity Fair, July 2011=]
“In the court case regarding the sultan’s attempt to seize the Palace hotel, Jefri’s attorney argued that the sultan had taken the prince’s two Brunei palaces without cause and that Jefri should be entitled to the value of at least one of the homes or “an equivalent palace somewhere else.” (“Buckingham is not for sale?” deadpanned the judge. “Maybe Windsor.”) The attorney added that the sultan and the B.I.A. were about to evict Jefri from St. John’s Lodge, in London, and the Place Vendôme property, in Paris, leaving him without a residence or suitable income, other than the paltry $20,000 a month he receives for life as a member of the Brunei royal family. “The idea of Prince Jefri working for a living is on a level of when during the Russian Revolution they put the aristocrats in the streets of St. Petersburg in the middle of the winter without any clothes to sweep,” Jefri’s lawyer told the court. “Unimaginable wealth all his life. He’s 55 or so. Now he’s going to go and bus tables?” =
In October 2009, Jefri returned to Brunei, staying in a hotel until his residence was ready. The sultan and the B.I.A. were apparently at last satisfied that the prince had revealed and turned over everything. “Insofar as we’re able to tell,” Richard Chalk replied when I asked him if his client, the B.I.A., was sure that Prince Jefri didn’t have another billion somewhere. “Objectively, you can say there’s been a history of concealing assets. So you can never be satisfied that this is right. But we’ve gotten to the position where he’s sort of said, ‘Well, I’ve told you everything, and if unbeknownst to me I become aware of something else I will of course hand it over.’ Because this is a man who in many respects is not completely aware of everything he had.” =
Image Sources:
Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Fortune magazine, Vanity Fair magazine, Brunei Tourism, Prime Minister's Office, Brunei Darussalam, Government of Brunei Darussalam, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.
Last updated June 2015