The sister of a woman accused of switching £4.2 million of diamonds for a bag of worthless pebbles during a daring heist was wanted for a similar crime in which €400,000 (£342,000) were swapped for a wad of paper, a court has heard.

Lulu Lakatos, 60, is accused of using sleight of hand to steal gems from Boodles, the luxury Mayfair jewellers, in March 2016.

But she insisted it was actually her younger sister, Liliana, who carried out the raid and her arrest is a case of mistaken identity.

Lulu Lakatos claimed Liliana Lakatos confessed to using her passport to travel to the UK from her home in France in order to steal the diamonds, three years before she was killed in a car accident in her native Romania.

In a fresh twist, lawyers for Lulu Lakatos told the jury that her sister was also a “wanted thief of international calibre” who was suspected of stealing an enormous sum of money using the same modus operandi as in the gem heist.

Jurors were told that Liliana Lakatos had nine convictions for theft and money laundering between 2002 and 2012.

Claims made over sister’s previous crime

Ioana Nedelcu, defending, told the court on Friday that an “unknown perpetrator” had secured a €40 million (£34.2 million) loan under “false pretences”, and had set up a meeting to collect a €400,000 (£342,000) advance.

She said a woman, who “could be identified as Liliana Lakatos”, attended a meeting at a Swiss bank on October 15, 2014 with company boss Reto Hartmann.

She told the jury: “Liliana Lakatos had Reto Hartmann open the safe deposit box, take the cash, check it and put it in eight bundles held in rubber bands into an envelope she had brought along with her, which she then wrapped in adhesive tape.

“When Reto Hartmann was distracted by a telephone call, she took advantage of the moment of distraction and exchanged the envelope with the cash wrapped in tape for a suitably prepared envelope containing paper.

“Afterwards, Liliana Lakatos left the bank safe, got into a cab and fled with the stolen goods in an unknown direction.”

Ms Nedelcu said it was the same method as used in the Boodles raid when the suspect, posing as a gemologist, used sleight of hand to surreptitiously swap a bag of diamonds with a bag of pebbles.

“It’s not diamonds, it’s cash, but it’s exactly the same thing,” she told the jury.

‘Avoiding the blame’

Previously, the jury was told that Liliana Lakatos’s DNA, as well as that of Lulu Lakatos, had been identified on the stolen jewels.

A member of staff from Boodles had also picked out Liliana Lakatos in a police identity parade.

But the prosecution claims Lulu Lakatos was behind the raid and is trying to blame her late sister out of convenience.

Philip Stott, prosecuting, said: “What has happened here is very simple: The defendant has taken advantage of the fact that her sister sadly passed away in order to try and avoid the blame for this offence.”

The trial continues on Monday, when the jury is expected to begin its deliberations.