The royal family has welcomed its newest addition, after Princess Eugenie gave birth to a healthy baby boy. Video / Getty
Princesses Beatrice and Eugenie have been dragged into a multimillion-pound fraud case that has embroiled their father, amid claims they also received money.
The Telegraph can reveal a £750,000 (NZ$1.4 million) payment transferred into the Duke of York's account on the orders of an alleged Turkish fraudster was described to bankers as a wedding gift for his eldest daughter, Princess Beatrice.
Princess Eugenie was also paid £25,0000 (NZ$47,000) on the orders of Selman Turk, a former Goldman Sachs banker accused of stealing £40 million (NZ$75m) from Nebahat Evyap Isbilen, a 77-year-old Turkish millionairess.
The York family have all been named in a High Court battle by Isbilen to retrieve her missing millions from Turk.
In proceedings revealed by The Telegraph, the Duke is alleged to have received a total of £1.1m (NZ$2m) from Isbilen's funds, while his ex-wife Sarah, Duchess of York received £225,000 (NZ$425,000).
Neither Princess Beatrice nor Princess Eugenie are believed to have had any knowledge of their parents' dealings with Turk, nor knowingly corresponded with him in any way.
The Duchess is understood to be distraught at the thought of her daughters being unwittingly dragged into the case, particularly as a result of their parents' actions.
However, The Telegraph understands she does not plan to hand back the money she received, because she believes it was paid to her legitimately and that a company she was acting for as a brand ambassador is responsible for any debt.
Turk is accused of taking the money from Isbilen, who was fleeing political persecution in her homeland and put her trust in him as her financial adviser.
Court documents obtained by The Telegraph show the first payment to the Yorks, which could have come from Isbilen's missing millions, may have been made to the Duchess in August 2019.
A series of payments were made through a third party, Alphabet Capital, limited to the family over the course of the next few months. It is alleged the payments were made from Isbilen's funds.
Jonathan Tickner, the head of fraud and commercial disputes at Peters & Peters, representing Isbilen, has told the court that bank statements obtained by his legal team show Princess Eugenie was paid £25,000 (NZ$47,000) over the course of two days.
The first £10,000 (NZ$18,000) transfer was made on October 9 through the Alphabet account. The next day, a payment of £15,066.05 (NZ$28,500) was made from Turk's account to "EUGENIE YORK" under the reference "BIRTHDAY GIFT".
Sources close to the family say the payment of more than £15,000 listed as a birthday gift to Princess Eugenie made on October 10, 2019 was in fact to pay for a surprise birthday party for the Duchess. Princess Eugenie's birthday is on March 23, whilst the Duchess' is on October 15.
Isbilen did make a direct payment of £750,000 (NZ$1.4m) to the Duke in November 2019, which she believed was for help obtaining a new Turkish passport after she fled her homeland.
"Mr Turk told me that he received help from the Duke of York to show or send the picture of my old passport to Turkey and that this service would normally be worth £2 million (NZ$3.7 million) but it would cost less if we made the payment by way of a gift," she told the High Court.
However, when he contacted her bank, Turk told them this money was in fact for a wedding gift for Princess Beatrice, who had got engaged two months earlier.
Tickner said transcripts had since been obtained "of telephone conversations between Turk, Hampden Bank and Prince Andrew's private office, in which this representation was repeated".
Isbilen added: "I have seen an email from Mr Turk to Hampden Bank explaining that this transfer was a wedding gift to Princess Beatrice owing to the close connection between our families. This email is entirely false."
There is no suggestion in court documents that Princess Beatrice was aware of the conversations.
The £750,000 was transferred to the Duke just days after he handed Turk an award at the Duke's Dragons Den-style competition, known as Pitch@Palace, at St James's Palace.
Isbilen has told the High Court she now believes the payment was connected to Turk's appearance at the event.
Tickner wrote to the Duke of York in March last year, but "declined" to respond to questions or give any account of his relationship with Turk. He has repaid the £750,000.
Money given as gifts is not liable for tax, experts have pointed out.
Richard Murphy, professor of accounting practice at Sheffield University Management School, said if the money had been received as part of a commercial transaction, tax would be due on the sums received.
Murphy said: "It would seem that it would be worth HMRC asking the Prince some questions in regard to his business affairs and in the context of these payments.
"The question to be asked is whether there was a payment received for services supplied. Was there some conditionality to his gift? Was there some agreement for an exchange by which both sides benefitted? If it was a commercial transaction, it would appear to be taxable."
Princess Beatrice and Princess Eugenie both received money from a fraudster linked to Prince Andrew. Photo / Getty Images
Murphy said the sum might be taxable at 45 per cent, the top rate of income tax. The tax specialist also pointed out that by returning the money, that implied the cash might not have been a gift.
Turk, who has a worldwide freezing order on his assets and has surrendered his passport, denies the allegations against him. He is being pursued by Isbilen through the High Court for the return of her money.
A spokesman for the Duke of York said they could not comment on ongoing court proceedings.
A spokesman for the Duchess of York said: "The Duchess was completely unaware of the allegations that have since emerged against Mr Turk. She is naturally concerned by what has been alleged against him."
On Friday, those close to her claimed she believes she has done nothing wrong.
She was introduced to Turk through the Duke of York, her ex-husband, with whom she still lives.
The Duchess claims she was owed £225,000 (NZ$425,000) by renewable energy company Pegasus Group Holdings for her role as brand ambassador, a job she was appointed to in July 2019.
She said at the time she hoped to be involved in a project to install Pegasus' mobile solar power units in Africa.
She was due to be paid in installments by Pegasus, according to those familiar with the deal, but Turk was approached - by the Duke and the Duchess - with a request he pay her the full amount she was owed and that he then reclaim the money from Pegasus.
The Duchess has stressed she had no idea the money from Turk was anything other than "entirely respectable", since at the time Turk was heading up Heyman AI, a digital banking firm that has since gone into liquidation.
In a statement on Friday evening, Princess Eugenie said: "On 31 March 2022 I received a letter from solicitors Peters & Peters representing their client Nebahat Evyap Isbilen in her claim against a Mr Selman Turk, and various companies. I know neither Mrs Isbilen nor Mr Turk (nor any other details of the claim) and I was surprised to receive this letter, which asked me to explain two payments made to my bank account in October 2019, which I understood to be gifts from a long-standing family friend to assist with the cost of a surprise party for my mother, Sarah, Duchess of York's sixtieth birthday.
"In early October 2019 I had received a call from our family friend saying that he wanted to make a financial contribution towards my mother's birthday party to assist with the catering costs. I suggested that any contribution could be made directly to the caterers, but in the event provided my account details to which two payments were made totalling £25,000, which I then transferred on to the company organising my mother's party.
"I am now consulting with my lawyers who I have asked to respond to Peters & Peters on my behalf to assist in their inquiries."
