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Ex-Burns Anderson IFA pleads guilty to £12m fraud

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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Comments

There are 18 comments at the moment, we would love to hear your opinion too.

  1. Very sad for the innocent people involved.

    he should be shot.

  2. Remind me why we have the FSA???????

  3. 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

  4. 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.

  5. What will be interesting is what sentence he gets (my guess through personal experience is 5 years) 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.

  6. 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

  7. 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.

  8. This makes a mockery of the headline on Goggle
    Welcome to Burns-Anderson Your Trusted Adviser

  9. So CS demand he stops using thir name in 2008 but nothing happened until 2009.

  10. 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.

  11. 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.

  12. Lets see what Margaret Cole says about this one!

  13. i hope he gets anally raped in prison

  14. This disgusts me, and I hope it disgusts the rest of you hard working professionals who are reading this. But how did this individual manage to conduct himself in this manner for so long ? Where were the compliance checks, both near (Burns Anderson) and further afield (the FSA) ? Why didn’t Credit Suisse report this sooner ? Many clients reading about this may think “if this network member can act like this for so long, how many more network members have been doing the same ?”. It does the IFA community no favours at all.

  15. I don’t think he would have detailed the transactions in his new business register, so not sure how BA or the FSA could uncover this until a client complains. When CS knew their logo was being used their first call should have been to the police, not him. He’s off to prison and fully deserves his stretch – why do some people actually think they can get away with this?

  16. Not sure I understand some of the comments – if he was conducting unauthorised business through an unauthorised firm then by very definition he wouldn’t have been regulated by the FSA, would he?

  17. The FSA should just investigate every financial services firm as they will always find something!!

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