Key Points:

A convicted fraudster, who gained notoriety in Auckland in 1990, is back in the news as a lawyer defending one of the men accused of blackmailing a member of the British royal family.

Giovanni di Stefano, who caught the attention of the Serious Fraud Office and media after making multimillion-dollar property bids in Auckland, is representing Ian Strachan in the London court case that came to light at the weekend.

Strachan and Sean McGuigan are accused of demanding £50,000 ($135,830) in return for not publicising tapes they claimed indicated the royal had engaged in a sex act with an aide.

Mr di Stefano told British media that no tape existed.

"What there is in existence are tapes both audio and visual of an assistant to a member of the royal family boasting of how he received a sex act from this royal family member. Whether that act took place I do not know."

Mr di Stefano said Strachan denied asking for any money.

Mr di Stefano arrived in New Zealand in 1990 giving the impression that he was an Italian lawyer from Beverly Hills with up to $100 million to invest, and he sought to buy $59 million of Auckland property. He and his then wife, Tanja, born in Kawerau, took on a high profile when they paraded around Auckland in May 1990.

After arousing the suspicions of people including the SFO and broadcaster Paul Holmes it emerged that Mr di Stefano had in 1986 been convicted and jailed in Britain for five years on fraud charges worth $75 million.

He denied the conviction, saying the "John di Stefano" convicted of bank fraud was his cousin. But a fingerprint check proved this was a lie.

He left New Zealand and was subsequently refused re-entry, on the grounds he had not disclosed his conviction. Holmes reportedly became suspicious of Mr di Stefano after noticing that his expensive clothes did not seem to be his own - the trouser cuffs dragged on the ground.

In 2004, he was back in the news as one of 20 defence lawyers for former Iraqi dictator Saddam Hussein, who was subsequently executed.