A top British barrister and his wife have told an American court that they entered a world of multimillion-pound subterfuge after being hired by the Sultan of Brunei’s brother.

In court documents seen by The Times, Thomas Derbyshire describes Prince Jefri as an embezzler of historic proportions who “tells so many lies he has difficulty remembering them all”.

The Prince has accused Mr Derbyshire and his wife, Faith Zaman, also a barrister, of defrauding him of $23 million (£11.7 million). Today a London judge will hear their application to lift a court order freezing their assets. Papers filed in a US court detail their defence.

They claim that the fraud accusation is part of a campaign to discredit them as potential witnesses for the sultanate.

The Sultan believes that his younger brother stole billions of pounds from the South East Asian nation. Brunei has persuaded judges to freeze Prince Jefri’s assets around the world.

The couple have sworn affidavits recounting how Prince Jefri admitted stealing $15 billion from the Brunei Government. They say that in 2000 he promised to return stolen funds in a settlement of an action by the sultanate’s investment wing. According to Mr Derbyshire, $13 billion is still missing.

The Prince has responded by accusing them of breaking their professional duty to respect a client’s confidentiality.

Ms Zaman states: “The transactions that are the subject matter of Prince Jefri’s allegation against my husband and me were conducted on his instructions in order to evade a settlement agreement and worldwide freeze order of the Brunei court against him.”

Prince Jefri’s lawyers have told the court that he will “vigorously contest, oppose and deny such allegations”.

Mr Derbyshire says that he was introduced to the Prince in 2004 by Jay Maggistro, a mutual friend who “serves as Prince Jefri’s hairdresser and confidant”.

Prince Jefri’s lawsuit claims that the couple fraudulently sold his Long Island house at a knockdown price to a company that he believes they were behind. Ms Zaman says that Prince Jefri instucted her to create that company so that he could sell the property to himself without Brunei’s authorities confiscating the proceeds. Mr Derbyshire says that the Prince left in the garage block “life-sized bronze painted statues of himself and his partner” costing $800,000, showing that he still owns it.

Prince Jefri accuses Ms Zaman, as managing director of his New York Palace Hotel in Manhattan, of arranging a $4 million order for plasma TVs from a mysterious London company. None arrived, according to the Prince. Ms Zaman said that he instructed her to buy the TV company “so he could derive personal benefit from the additional commission charged to the hotel”. The televisions were being delivered on schedule, she said.

When a company owned by Prince Jefri received a $5 million cheque, Ms Zaman is alleged to have created an entity with a similar name, paying the money into that. Her response: Prince Jefri’s company was unable to open a bank account because of his “infamy amongst the banking community” so the Prince asked her to create the cloned company.

Prince Jefri has accused the couple of misappropriating $1 million using corporate credit cards he provided. Ms Zaman says that Prince Jefri’s sons Prince Bahar and Prince Hakeem and his “numerous wives” were always asking for items to be bought for them.

The barristers were also permitted to charge their own expenses to the cards. However, in an affidavit, Prince Bahar denies that he instructed Ms Zaman to buy him a $30,000 Cartier watch.

In October Brunei authorities warned Ms Zaman that she would be held liable for any extraordinary payments made by the hotel. She said that Prince Jefri had been pressuring her to pay invoices to a company that he owned. She explained her reluctance to Prince Jefri and Prince Bahar.

She said that the two princes “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. I grew increasingly intimidated.”

Ms Zaman was dismissed in November. Two days later, Prince Jefri alleges, she returned to the hotel at 4am and purloined two boxes believed to hold his private documents. Ms Zaman has provided an inventory of the contents, all personal effects, including an “urn containing the ashes of my son”.

She concludes: “It is at the instruction of Prince Jefri that these horrific allegations were made against me and my family. Our lives have been destroyed by the negative publicity and the perception of us that people now have.”

When the couple learnt of the US lawsuit, Mr Derbyshire sent an e-mail to Prince Jefri’s lawyers, which they interpreted as a threat to expose the Prince’s secrets unless he withdrew the complaint.

Mr Derbyshire’s attorneys say that he was only explaining that, in defending himself, he would disclose damaging information about Prince Jefri, “something that is not particularly hard to do”.

The players

Prince Jefri
Member of Brunei’s ruling royal family. Former playboy, former finance minister, father of 17

Prince Bahar and Prince Hakeem
Two of his sons

Sultan of Brunei
Absolute ruler of the oil-rich nation. Monarch, Prime Minister, Defence Minister, Finance Minister, Supreme Commander of the Armed Forces, Supreme Head of Islam, chief of the Brunei Police, head of the petroleum unit and head of broadcasting services

Thomas Derbyshire
Britain’s eighth highest-earning criminal barrister. Earns £668,000 a year. Specialist in fraud and money-laundering cases Faith Zaman His wife, a non-practising barrister

Jay Maggistro
Sicilian entrepreneur and celebrity hairdresser. Former consort to Cheryl Barrymore. Confidant to Prince Jefri. Introduced the barristers to the prince

Source: Times database

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