CODENAME ISABELLA: Judgement due in extraordinary case of accountant turned 'supergrass' wan
A JUDGEMENT is due in an extraordinary extradition case concerning an accountant from North Yorkshire wanted in Spain to face money laundering charges that link back to murdered British gangster John 'Goldfinger' Palmer.
Paul Blanchard, 74, (above) could be facing up to 15 years in a Spanish prison following accusations from Spanish prosecutors that are connected to money launderers, international terrorists and a timeshare fraud linked to the former right hand man of late British gangster John "Goldfinger" Palmer.
Blanchard is fighting extradition to Spain to face charges that he conspired with Palmer's former right-hand man, Mohamed Jamil Derbah, 55, to defraud timeshare customers in a multi-million pound scam.
But he counter claims to have been a secret undercover informant for Spanish police who was codenamed "Isabella."
He says the prosecution is a punishment after his relationship soured with his handlers after he accidentally blew his own cover and then lodged a series of complaints about no longer being given protection.
A defence document filed with the court states: "In July 2001, Mr Blanchard provided statements as a prosecution witness in the matter.
"For the next two years, despite the risks to himself, he actively cooperated with the Spanish investigators, including in their building of a case for Spain against Derbah’ associates.
MURDERED: Paul Blanchard was accountant to Derbah, former henchman of John Palmer
"He was provided with police protection. In fact, Mr Blanchard’s cooperation expanded. The nature, degree and value of his Derbah cooperation was such that, in 2003, he was asked and agreed to assist the Spanish police and investigating judge infiltrate other crimes and other British criminal groups operating in Spain.
"He became a participating undercover state agent. His codename was ‘Isabella’.
"In March 2004, Mr Blanchard’s cover was blown. The Spanish authorities attributed blame for that to him. The relationship soured and Mr Blanchard was abandoned.
"Mr Blanchard was then arrested in the UK in respect of his involvement in those other matters.
"Despite being debriefed by Special Branch and MI5, Spain dishonestly denied his status."
During evidence, Blanchard produced documents which suggested he even passed on the names of the 7/7 bombers a year before the Tube attacks after coming across them in a separate fraud, he claimed.
The bombings were a series of co-ordinated Islamist terrorist suicide attacks in 2005 that targeted commuters travelling by bus and Underground during the morning rush hour in London, killing 52 and injuring 700.
Westminster Magistrates Court heard how Blanchard's involvement began in 1999 when he set up as an "offshore" tax adviser on Tenerife.
He admits he was helping "businessmen" set up offshore businesses and bank accounts for the purposes of avoiding tax, but denies this was for illegal or fraudulent reasons. The court heard he was approached by Lebanese-born Derbah to set up companies for the timeshare operation Derbah was running after splitting from Palmer.
Palmer, who was murdered in June 2015, made millions through a timeshare scam and was even once on the Sunday Times Rich List.
Blanchard, who lives in Fulford, near York, said his own relationship with Derbah soured in 2001 after he "discovered he was involved in unlawful fraudulent activities."
He went to police and claims he was introduced to Spanish intelligence officers Enrique Estaban and Chief Inspector Fernandos Munoz in Madrid.
CLAIM: Blanchard claims he informed on Derbah who has not been charged (Mohamed Derbah/Twitter)
He said he agreed to be a witness and provide evidence for their investigation into Derbah.
While he recorded evidence he said he was promised "protected witness" status due to fears "of getting assassinated by Derbah's henchmen".
Blanchard said his handlers encouraged him to act as an informer against other clients or people he came in to contact with as he continued to work from the Costa del Sol. He said that in 2003 he became aware of two British fraudsters moving money for the IRA, and fed this back to police.
He said: "This involved a very large US conglomerate.
"The IRA had someone inside the company's bank who transferred £4.3 million to Spain." He told how he accompanied someone involved to a bank in Torremolinos to see the transfer completed, and ended up being arrested. But after making a phone call to Mr Munoz he was immediately released, he said.
Blanchard claimed his relationship with the Spanish police deteriorated in April 2004 after he was undercover on another fraud connected to a Birmingham Al-Qaeda cell.
He said he told his handlers about the British fraudsters ripping off two of his clients in the US for 100,000 euros.
One of the men was arrested and Blanchard claimed Mr Munoz obtained authorisation for him to look through his papers and phone records, which he claimed revealed details of the Birmingham terror cell and a scam to send £375,000 to Dubai and on to Spain. It was within these papers that he saw details of the two 7/7 bombers among several names and cash being moved from the UK to Spain, he claimed.
But, it was also at this time that he claims to have blown his cover by telling the local police he was assisting the intelligence service on terrorism matters.
He said that his handlers subsequently refused to give him the promised protection.
He said: "Within 10 days it had completely destroyed everything because I had broken my cover."
Blanchard claimed that not only was he cut off by his Spanish handlers, but they refused to confirm his alleged role with them when his name came up during a British police investigation into the £4.3million and £375,000 frauds.
His lawyer made repeated requests to Judge Baltazar Garzon, who was investigating Derbah and Palmer, for confirmation of his work with Spanish police and payment of expenses incurred.
He said: "I thought they'd be bound to confirm everything I was saying and what I provided, but they never responded or gave any information." In 2006, he was arrested in the UK for his alleged involvement in the frauds.
He said that with his covert recordings stuck in a lawyer's office in Spain, on legal advice in February 2008, he pleaded guilty to a number of fraud and money laundering charges and was jailed for six and a half years.
Despite the outstanding charges against him, Derbah remained on Tenerife as a businessman and well-known philanthropist. He even published a book about his time with Palmer in 2018.
Soon after, in April 2018 Blanchard was held in the UK on a European Arrest Warrant for allegations in Spain.
The Spanish warrant for Blanchard's arrest states that in 1998: "The (Spanish) police investigation begins at the request of the British authorities in connection with John Palmer."
Mark Summers, representing Blanchard, said about five months after his client began assisting the authorities, Derbah and a number of his associates, including a senior police officer from the island, were arrested in November 2001.
Palmer was arrested in 2002. He was about to stand trial over the case in 2015 when he was assassinated at his home in Brentwood, Essex.
At first his death was not regarded as suspicious but later it was discovered that he had several bullet wounds.
The murder remains unsolved. Daniel Sturnberg, representing Spain, said it was accepted Blanchard started out as a prosecution witness, but claimed that he later became a suspect due to incriminating comments made in his own statements.
He said there was no evidence he was ever guaranteed to be a protected witness.
He said despite allegedly recovering his tape recordings in 2011, Blanchard had not tried to overturn his British conviction. Blanchard claims he will do this if he successfully fights extradition.
Judgement has been adjourned a number of times due to coronavirus, but is now due to be handed down.