Derick Smith, who previously served a prison sentence for a bizarre blackmail plot involving the priceless artefact – brought to Britain by a Sunderland soldier – said it causes him nothing but trouble.

The 58-year-old made the comments after he was fined at Newcastle Crown Court for a fraud involving taking two cheques from interior designer Lesley Shaw, from Cleadon, after a business deal went sour.

When the venture fell through he was arrested after taking two cheques totalling £335 without her permission. He claimed they were expenses for collecting business debts.

Smith, of Elliot Street, County Durham, admitted fraud yesterday and was ordered to pay £335 compensation and fined £200 by Judge Richard Lowden.

After the hearing he told how he had suffered a run of bad luck since getting his hands on the chalice.

Smith said: "The chalice will stay in the bank, for now at least.
"It seems every time it rears its head I end up in trouble. I'm happy to have it put away in the bank for the time being.

"I have no immediate plans to sell it, but I am currenly writing a book which may be called The Unholy Grail, about my experience."

The chalice bears a simple inscription, translated roughly into English as "In memory of the great time", with the date 7.3.36 and the name Hermann Goering.

But by May 1945, with the Nazi high command in disarray, Goering packed off most of his art treasures to a salt mine in Austria and ordered the destruction of his magnificent home Carinhall.

But before the orders could be carried out, Carinhall was occupied by a unit of the British Army, including Sunderland-born private George Armstrong who acquired the chalice.

During the fraud case at Newcastle Crown Court yesterday, prosecutor, Tom Moran told how Smith had got in touch with old schoolmate Lesley Shaw, 56, in 2007, after both their marriages broke down and he soon moved in as her lodger at her home in Cleadon.

Instead of paying rent, Smith would do odd-jobs around her home and at her interior design business, in Boldon.

Mr Moran said Smith and Ms Shaw were just friends, but Andrew Finlay, defnding, said the couple had a "full relationship".

It was on May 1 last year Ms Shaw reported Smith to the police after she realised two cheques were missing.

Mr Moran said; "She discovered the defendant had taken from the back of two cheque books a single cheque and made them payable to himself for £135 and £200 respectively.

"He did that without her permission and must have copied her signature in doing so."

Mr Finlay said: "When the relationship came to an end he helped himself to two cheques thinking this would compensate him as a result of work he had done for her. He accepts she would not have agreed she owed him that money."

Bizarre dispute over the cup

The artefact has already been at the centre of the most unlikely of court cases – two former lovers locked in a dispute about a family pet and the solid silver chalice created for the morphine-addled head of Hitler's airforce.

The bizarre tale was played out at Newcastle Crown Court in 2002, when Smith admitted blackmailing his former partner. The court heard the woman, who cannot be named for legal reasons, claimed Smith gave her the chalice as security after she lent him £40,000 to start a business, a claim Smith denied.

He snatched the woman's boxer dog from its owner's home while she was in hospital, then issued "sinister veiled threats" to force her to hand over the chalice.

Smith was jailed for nine months but the "manifestly excessive" sentence was cut to six weeks by the Court of Appeal.

A separate court hearing, after a four-year legal wrangle, determined Smith is the legal owner of the chalice, now under heavy security in a bank vault.