SUNDAY BIG READ: Informant Paul Blanchard's relief after extradition fight win against Spain over Tenerife multi-million pound fraud - now he vows to overturn UK fraud conviction

A BRITISH accountant turned 'spy for Spanish Police' who was investigated over alleged timeshare frauds has avoided extradition after Spain withdrew the request just days before a crucial appeal.

Grandad Paul Blanchard, 81, was wanted in Spain to face money laundering charges alongside others including Mohamed Jamil Derbah, the former head of security for the late British gangster John 'Goldfinger' Palmer (below in his latter years) on Tenerife.

It was in connection with an alleged multi-million pound timeshare scam Mr Derbah, 62, was alleged to have run after he parted company with Palmer.

Palmer was jailed for eight years at the Old Bailey in May 2001 for masterminding a massive £30 million timeshare fraud that scammed 16,000 to 20,000 victims.

Mr Blanchard was facing up to 15 years in a Spanish jail before the dramatic U-turn from Spain last month.

Over two days from May 12 Mr Blanchard was due to appeal at the High Court against an earlier extradition order made at Westminster Magistrates' Court on October 18 2024.

The Spanish authorities withdrew the warrant for Mr Blanchard’s arrest just ahead of the hearing, confirming this to the CPS which had been due to represent the country.

The CPS confirmed that it informed the High Court of the withdrawal of the warrant, upon which an order by the Honourable Mr Justice Gavin Mansfield dated 11 May 2026 was issued quashing the extradition order made at Westminster Magistrates’ Court and discharging Mr Blanchard from extradition proceedings.

In a skeleton argument prepared for the appeal, Mr Blanchard's barrister Edward Fitzgerald KC set out an argument that there had been 'prosecutorial misconduct' and an 'abuse of process' by Spanish prosecutors and the CPS in connection with alleged disclosure failings in relation to withheld material that Mr Blanchard (pictured below left with Mr Derbah) argued would have proved his role as a 'participating informant.'

It is the second time he has defeated an extradition request from Spain since it first issued a warrant for his arrest in 2018.

The earlier request was defeated in 2021, due to technical deficiencies with the warrant, before the latest was issued.

Mr Blanchard, from Fulford near York, told UK News and Investigations that the outcome was a vindication of his claims made over the eight-year legal battle and that he now plans to appeal a UK fraud conviction received in connection with his work as an informant that Spanish prosecutors refused to confirm.

His claims included that after providing a dossier of evidence that led to Mr Derbah's arrest in 2001, he went on to provide information to the Spanish police's General Intelligence Unit about financiers involved with terrorists from Al Qaeda and the IRA and members of the Russian mafia.

He even claimed to have passed on the names of Mohamed Siddique Khan and Shehzad Tanweer, two of the 7/7 bombers a year before the Tube attacks after coming across them while acting undercover for Spanish police.

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.

Mr Blanchard's involvement in the shady world of criminal and terrorist financing began in 1999 when he set up as an 'offshore' tax adviser on Tenerife.

His clients included Lord Glenconnor (pictured right with Mr Blanchard below), who was linked to British royalty and once owned Mustique.

He was helping people set up offshore businesses and bank accounts for avoiding tax, but not for illegal or fraudulent reasons.

His extradition case heard he was approached by Lebanese-born Mr Derbah to set up companies for the timeshare operation he was running after splitting from Palmer.

Palmer, who was murdered in June 2015, made millions through his Tenerife timeshare scam and was even once on the Sunday Times Rich List.

The original 2018 Spanish warrant for Mr Blanchard's arrest stated that in 1998: 'The (Spanish) police investigation begins at the request of the British authorities in connection with John Palmer.'

Mark Summers KC, who represented Mr Blanchard  during the first extradition case, told Westminster Magistrates' Court that about five months after his client began assisting the Spanish authorities, Mr Derbah and a number of his associates, including a senior police officer from the island, were arrested in November 2001 on suspicion of drug trafficking, money laundering, document forgery, and bribery.

Media reports from the time said police had 'smashed a gang suspected of financing militant group Hezbollah and the Syrian-backed Amal movement with £7million made from timeshare sales'.

Eleven people, including Derbah (below in police mugshot from the time) were arrested after raids in Madrid and Tenerife.

While Palmer was in jail in the UK, Spanish police and judicial authorities continued to investigate his extensive network of companies in Tenerife.

He had been due to stand trial in connection with Spanish timeshare fraud charges later in 2015 when he was assassinated at his home in Brentwood, Essex.

His murder remains unsolved.

Mr Blanchard said his own relationship with Derbah had soured in 2001 after he discovered he was involved in unlawful fraudulent activities, so he went to police and was introduced to Spanish intelligence officers Enrique Estaban and Chief Inspector Fernandos Munoz in Madrid.

Mr Blanchard told earlier hearings he agreed to be a witness and provide evidence for their investigation into Derbah (below).

Due to fears over what he was getting embroiled in, Mr Blanchard secretly recorded all meetings and phone calls with his handlers, who he said promised him 'protected witness' status due to fears 'of getting assassinated by Derbah's henchmen'.

Mr Blanchard (below in his younger years) claimed throughout proceedings that while a case was built against Mr Derbah, his handlers encouraged him to act as an informer against other clients or people he came in to contact with as he left Tenerife to work from the Costa del Sol.

He claims to have become a secret undercover informant for Spanish police who was codenamed "Isabella."

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 Khan and Tanweer 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 at the time 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 in the UK.

In a legal argument filed in 2020 for Mr Blanchard (above) during the first extradition battle, it said: '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.

'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 code name 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.'

Mr Derbah has always denied any wrongdoing and went on to become a successful businessman on Tenerife, who also dabbled in its politics.

He even published a book about his time with Palmer in 2018.

Soon after, in April 2018 Mr Blanchard was held in the UK on a European Arrest Warrant for allegations in Spain.

Mr Blanchard insisted throughout his extradition battle that one of the motivations for getting him to Spain was to get him to testify against Mr Derbah at any trial.

But, in April this year Spain’s National Court dropped all charges against Mr Derbah in connection with the 2001 arrest, citing a lack of evidence and passage of time in its ruling.

During Mr Blanchard's first extradition battle, 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.

Mr Blanchard, who went on to pen the book Secrets of a Mafia Whistleblower (above) , maintains the Spanish extradition request was also to silence him to cover up its alleged inaction over his intelligence about jihadists that went on to be involved in the terror attacks in London and also the March 2024 Madrid train bombings.

After the extradition request was finally dropped he said: 'This is total vindication of everything I have said. 'I was working as an informant, but they completely dropped me and then refused to confirm my status which is the only reason why I was convicted in the UK. I am going to use this to now appeal my UK fraud conviction.'

Karen Todner, Mr Blanchard's solicitor, posted on Linkedin: 'The High Court has allowed the appeal of Paul Blanchard. The appeal against extradition to Spain was pursued in respect of offences alleged to have taken place 25 years ago which we said was unjust and oppressive due to passage of time. 'We also asserted a failure to disclose the cooperation given to the Spanish authorities. The Spanish withdrew the warrant on Friday. Victory for proportionality and justice.'

A CPS source denied that the warrant being withdrawn was linked to Mr Blanchard's appeal grounds and said it was due to the case collapsing against Mr Derbah.