IFAs "unwitting pawns" in offshore investment scam

22 December 2009 1:37 pm | By Leah Milner

Operating under the name Prudential Commercial Investments – which is unconnected to the stock market-listed life insurer – the scheme defrauded 56 investors of £1.93m.

The Serious Fraud Office says investors were predominantly British ex-pats retired or living abroad, who believed on the basis of advice from their IFAs that their funds would be channelled into a lending scheme for commercial property buyers in the UK secured by mortgages and would reap high returns.

Instead the fraudsters diverted investors’ funds to offshore accounts for their personal benefit.

PCI did not market directly to investors but specifically targeted IFAs with an established base of ex-pat clients.

The SFO describe the IFAs caught up in the scheme as “unwitting pawns” in the fraud.

These IFAs were incentivised with 4–6 per cent commission rates from PCI and were told that the company had a five year trading record and a portfolio of $20m.

The SFO says not all IFAs were convinced by PCI’s sales pitch, but some were taken in by the company.

It says: “Ultimately some were brought down when the fraud was discovered and lost the trust of their clients.”

Two of the defendants pleaded guilty, while verdicts on the other three were returned at Worcester Crown Court yesterday and recorder of Worcester HHJ McCreath, passed sentenced on all
five.

The PCI group companies were incorporated in Belize, the Seychelles and the UK.

The two men who pleaded guilty to conspiracy to defraud were Peter Roope (born 14/04/57), and Gareth Matthews (born 19/06/57).

Both men lived in Prague and were extradited in order to stand trial.

Roope used the alias Paul Reid and Mathews used the alias James Williams in order to disguise their true identities.

The SFO says they were respectively the number one and two in the fraud and played a key role in persuading the IFAs that this was a genuine investment product.

Both men had previously worked in the financial services industry and used their experience and knowledge to help them dupe the IFAs into believing that this was a legitimate scheme.

The three found guilty of conspiracy to defraud were Charles Frisby (born 12/03/44), Douglas Miller (born 07/08/59) and John Roope, the twin brother of Peter Roope (born 14/04/57).

The jury were unable to reach a verdict in relation to a sixth defendant, David Usher (born 02/05/57), and were therefore discharged.

Frisby, based in Yorkshire, helped to set up the PCI business, drafting its business documents and marketing literature. Miller of Nottinghamshire worked with Frisby and produced the PCI website and literature. John Roope (who used the alias John Rogers), lived in Australia and, along with Gareth Matthews, promoted PCI in South East Asia.

He too was extradited to face trial. Usher ran the administration office in Ludlow and looked after the bank accounts.

Four other persons were named on the indictment but not proceeded against (either deceased, not extraditable or played a junior role).

Peter Roope was sentenced to seven years in jail reduced to four years and eight months due to his early plea, Gareth Matthews to six years reduced to four years due to his early plea, Charles Frisby to four years and six months, Douglas Miller to three years and six months and John Roope to two years.

 

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