Ex-Burns Anderson IFA pleads guilty to £12m fraud
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Former Burns Anderson IFA Grahame Whitehead has pleaded guilty to defrauding investors out of almost £12m.
Whitehead pleaded guilty to 49 counts of fraud and obtaining money by deception when he appeared at Chelmsford Crown Court today. In total, investors put £11.95m into what the prosecution described as a pyramid fraud scheme.
Between 2004 until his arrest in early 2009, Whitehead duped 46 victims into two fake schemes. Clients thought their money was being investing in high interest bearing loans with Credit Suisse or short-term bridging loans for the Salvation Army.
Whitehead operated his pyramid scheme through two companies, Woodbridge Financial Services Limited and Woodbridge FS. The first was put into liquidation in 2007 and the then launched the second firm.
Two of the victims of Whitehead’s scam suffer from multiple sclerosis and one couple was advised to remotgage their house and invest the lump sum realised with Whitehead.
The money was in fact being paid into Whitehead’s own bank account or the bank account of a family member which was being used for his own interest.
To ensure the 46 victims kept their money with Whitehead, he provided interest statements bearing the Credit Suisse logo.
Despite Credit Suisse contacting Whitehead in 2008 to demand he cease using the Credit Suisse name, he continued using the brand.
Prosecutor Anthony Abell said: “This was a massive and highly sophisticated fraud. It was executed confidently and with determination. A large number of vulnerable individuals were deliberately targeted. The effects of this fraud have been devastating on them.”
In total, the fraud brought in £11.95m, but the court heard that Whitehead paid out £4.7m in interest to the duped investors leaving £7.2m outside.
One victim, who invested her entire pension with Whitehead, said: “I have known him for 20 years and trusted him, we all did. It is a total abuse of our trust. I just hope I can get some of my money back, but I am not holding my breath.”
The smallest loss suffered by an investor was £7,000 and the largest loss was £2.5m.
The trial continues.
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Readers' comments (15)
CMIT | 15 Apr 2010 2:15 pm
Disgusting
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Dave Walton | 15 Apr 2010 2:19 pm
Remind me why we have the FSA???????
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M Coffer | 15 Apr 2010 2:43 pm
On the current basis of reward for wrongdoing, he should at least be up for a peerage in GB's honours list. Those at the FSA who suffered acute myopia for years will of course merit a huge bonus and IFAs will foot the bill
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Anonymous | 15 Apr 2010 2:50 pm
Excuse if I seem thick, but when Credit Suisse discovered that this guy was using their logo, should they have not reported it to the FSA who should have taken action straight away rather then let him go on into 2009 before he was arrested.
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Anonymous | 15 Apr 2010 2:50 pm
What will be interesting is what sentence he gets and whether the court orders him to pay back the money.
Or maybe the FSA can use their shiny new powers and simply fine him to get redress for the customers.
Or maybe they can fine his Principal firm as they are liable......oh no, that would be Money Portal!
So he'll get a short sentence and walk away with the money, the police and CPS will get lots of plaudits for a conviction and the victims will be forgotten.
Laughable.
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joe soap | 15 Apr 2010 2:53 pm
In answer to Dave Walton at 2.19 we have the fsa to catch all the criminals including intermediaries/IFA's.
Just goes to show though that despite Intermedairies always complaining about the FSA and that they target them unfairly you can't stop a good crook who just ignores the rules
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Duncan Philp | 15 Apr 2010 2:54 pm
How on earth can someone like him get away with this for so long. Were there no compliance check within Burns Anderson, Why did Credit Suisse not report him, why did the FSA not find out about this. It is retrobates like him that give honest hard working IFA's a bad reputation. Hope he gets at least 10 years and they take away all his assets to refund something back to the victims.
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Richard Jacobs | 15 Apr 2010 2:57 pm
So CS demand he stops using thir name in 2008 but nothing happened until 2009.
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John Harding | 15 Apr 2010 3:02 pm
Dave Walton.
FSA seems notable by its absence, but thats probably because they are looking for some much smaller 'rule' breakers. IFA's and brokers who haven't ticked all the right boxes but who's clients haven't lost a penny!
I think the clue is in the prosecutors comment that this was a 'massive and highly sophisticated fraud'. Obviously way beyond the FSA's capabilities then.
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michael brayne | 15 Apr 2010 3:09 pm
What get me is that he is obviously a very talents and persuasive salesman, if he was straight and just sold regular investment bond and trust he could have made a fortune legitimately.
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