Firms behind unauthorised ‘gold mining’ scheme shut down

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Three companies behind a gold mining investment scheme promising investors returns of 12 per cent a year have been shut down following an investigation by the Insolvency Service.

Continental Mining Opportunities, registered in Panama, sold partnerships to investors in a company called Montana Leon. Montana Leon was said to own a 30 per cent stake in a gold mining joint venture in Peru.

Investors in the scheme were given Facebook feeds and news updates with photographs and videos of the supposed activity at the mine.

But investigators found no evidence that Montana Leon or any associated companies had genuine leasehold or ownership rights. The company also did not own any plant or machinery, and did not have government permissions to carry out mining operations.

The FCA investigated the two firms and a related UK company, CMO Administration in early 2015. It posted a warning about Montana Leon in April last year saying the firms behind the scheme were unauthorised and that the investments were high risk.

The regulator also secured agreements from four directors across the companies to stop marketing the investments and liquidate Montana Leon.

But the firms tried to get around the FCA action by trading through a subsidiary company based in Peru.

Investors were told to expect 12 per cent a year over a six-year tem. The Insolvency Service says although some investors were paid minor returns in early 2015 it is not known where the money came from, as returns were paid out before mining operations were due to start.

Over 130 investors paid in over £1.5m to the scheme over a six-month period.

The High Court ordered the firms to be wound up in December.

Insolvency Service senior investigator Irshard Mohammed says: “Thanks to the hard work of investigators, this operation has been effectively curtailed but I would urge investors to be diligent when faced with seemingly tempting investment opportunities.

“The Insolvency Service will act whenever serious failings are discovered and ‘close the lid’ on unscrupulous companies to prevent them from inflicting misery on ordinary people.”