IFAs “unwitting pawns” in offshore investment scam

Five men have been jailed for an investment scam, which defrauded British ex-pats of £1.93m using overseas IFAs as “unwitting pawns”.

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.

Recommended

Acuity links environmental VCTs

Smaller companies specialist Acuity Capital is aiming to raise up to £20m through a linked share offer for the Acuity environmental VCT and environmental VCT 2.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 17 comments at the moment, we would love to hear your opinion too.

  1. In my opinion there is no such thing as “unwitting IFA’s” just lazy ones who prefer easy sales with little research.

  2. Ironic timing that the real Prudential are running a pop up advert for advisers in the middle of this story about the fake Prudential Commercial investments!!!!
    Absolutley hilarious.

  3. Headline should read:

    IFAs “witless pawns” in offshore investment scam..

  4. FSA embarassment team 23rd December 2009 at 12:18 pm

    I happen to know one of these guys and met him about 20 years ago. He got kicked out of Singapore for dodgy dealing.

    Where were the FSA in all this then eh? Nowhere of course just picking up their fat salaries and pensions as usual whilst being asleep on the job.

    WE HAVE THE WRONG REGULATIONS AND THAT’S THE PROBLEM.

  5. FSA embarassment team 23rd December 2009 at 12:19 pm

    Evan Owen – Have you been knoblled by the FSA and working for them now?

  6. Can we please have the names of the guilty IFAs involved and which firm/ network supervises their activities

  7. No sensible qualified IFA would sell a fund before he/she has done their due dilligence on the fund and their Directors including all neccessary references – this one is shades of the infamous Imperial Fund of 10 years ago – same story – you would have thought advisers would know better. Unfortuantely there is no need for qualifcations offshore or in many areas any regultory issues – ah well watch this space for the next scam

  8. There seems to be a similar scam going on at the moment in relation to another Midlands based company called Greenfield. Investors have been invested into a fund (called Greenfield International Property Fund Plc which is based in the IOM (these investments were made through Skandia’s offshore bond) and also invested into Greenfield International Ltd (which is the Midlands based company). Both of these companies have then lent the money to a couple called Intellectual Property UK Ltd. This company invests in property and has gone into administration. None of the investors appear to be aware that their money is at risk (or is potentially lost – the amount is £1.3m). There are two things that make this even more worrying, first, the director of all 3 companies is a practicing IFA and, second, the FSA seem to know about this but aren’t doing anything about it. If you come acros clients with Greenfield investments, you need to let them know that they may have lost their money. Get them to look up Intellectual Property UK Ltd on Companies House website and they’ll see that the company is in administration and that their is around £1.3m owing to the two Greenfield companies and that the liabilities exceed the assets by a similar amount. Unless these people are tracked down, they may have no idea that their money may be lost. If you know anyone who is invested in these funds, please post their details here so they can be contacted.

  9. Where was the FSA’s due dilligence when it came to Northern Rock, Equitable Life, Lehman Brothers etc etc and all of this onshore and under the nose of one the the worlds most invasive regulators. I don’t know the full facts of this case but neither do some of the above commentators. What I do know is that I hate these “holier than thou” types who rush to claim this has to do with being offshore and unqualified! If these IFA’s were in part to blame then the courts would have acted, but of course unlike the UK FSA Star Chamber they do need evidence of guilt!

  10. No Mr P S, I am not working for the FSA but if I was I would be pying you a special visit.

  11. Did the IFA ask any questions or did they just take the money ? These schemes cant operate without the support of “reputable” marketing, lawyers, and IFA. UK Land banking plot scams continue to be promoted across Asia because everyone involved turns a blind eye an pretends its all OK

  12. TONY MARSTON-SMITH 4th January 2010 at 10:13 am

    If the IFAs were fee charging rather than commission earning, I wonder how many clients would have been duped?

  13. If these IFAs had been charging fees (there is nothing saying they were not) the result would have been the same. There is no evidence whatsoever that suggests fee charging IFAs are more ethical. I have just taken on a new client from a fee charging IFA, he kept moving the clients fund internally and charge £250 a time for his research but gained nothing for the client. If fee charging prevented bad practice then all are solicitors are saints. IFAs are held in higher esteem than solicitors.

  14. http://www.healthcentral.com/sexual-health/c/410862/profile&t8=1 [url=http://www.healthcentral.com/sexual-health/c/372810/profile&t8=1]cialis[/url] diazepam online generic cialis [url=”http://www.healthcentral.com/sexual-health/c/712539/profile&t8=1″]cheap levitra[/url] [LINK http://www.healthcentral.com/sexual-health/c/283306/profile&t8=1%5Dcheap viagra[/LINK] dflr

  15. http://www.livescribe.com/forums/member.php?u=8060&t8=2 [url=http://www.livescribe.com/forums/member.php?u=8055&t8=2]buy diazepam[/url] levitra viagra [url=”http://www.livescribe.com/forums/member.php?u=8056&t8=2″]buy tramadol[/url] [LINK http://www.livescribe.com/forums/member.php?u=8058&t8=2%5Dfree viagra[/LINK] zyqw

  16. http://forums.bleachexile.com/member.php?u=55577&t8=4 [url=http://forums.bleachexile.com/member.php?u=55585&t8=4]acomplia[/url] viagra professional discount viagra [url=”http://forums.bleachexile.com/member.php?u=55582&t8=4″]buy levitra[/url] [LINK http://forums.bleachexile.com/member.php?u=55584&t8=4%5Dgeneric cialis[/LINK] sbod

  17. y7u2xY wjzdbumonsie, [url=http://miutuvhnhkla.com/]miutuvhnhkla[/url], [link=http://vnvhqkkjnkgc.com/]vnvhqkkjnkgc[/link], http://zymkkvlpagsm.com/

Leave a comment