The High Court has ruled four people who ran a series of scam pension schemes must pay back £13.7m they took from victims.
David Austin, Susan Dalton, Alan Barratt and Julian Hanson tricked hundreds of people over a two-year period to part with their savings and then squandered the money.
The Pensions Regulator asked the High Court to order the defendants to repay the funds they stole – the first time such an order has been obtained.
Up to 245 members of the public were persuaded via cold-calling and similar techniques to transfer their pension savings into one of 11 scam schemes operated by Friendly Pensions.
Victims were told that if they transferred their pension pots to the schemes they would receive a tax-free payment commonly described as a “commission rebate” from investments made by the pension scheme – a form of pension scam.
Austin laundered funds from the schemes into his bank account and the accounts of family members in the UK, Switzerland and Andorra through a number of businesses that he had set up in the UK, Cyprus and the Caribbean, including Friendly Pensions.
TPR showed the High Court evidence of how members of Austin’s family had lived a life of luxury using the money – including showing off their spending on expensive goods, ski holidays and trips to Dubai and the Mediterranean on social media sites.
Dalriada, the independent trustee appointed by TPR to take over the running of the schemes, will now be able to seek the confiscation of the scammers’ assets for the benefit of their victims.
TPR’s executive director of frontline regulation Nicola Parish says: “The defendants siphoned off millions of pounds from the schemes on what they falsely claimed were fees and commissions.
“While Austin was the mastermind, they all took part in stripping the schemes almost bare. This left hardly anything behind from the savings their victims had set aside over decades of work to pay for their retirements.
“The High Court’s ruling means that Dalriada can now go after the assets and investments of those involved to try to recover at least some of the money that these corrupt people took. This case sends a clear message that we will take tough action against pension scammers.”
In his judgment, Judge Mark Pelling ruled that Austin had been the “mastermind” behind the scam but that all four of the defendants had acted dishonestly.
He ruled that Austin and Barratt were jointly and severally liable to pay £7.7m plus interest; that Austin and Dalton were jointly and severally liable for £5.9m plus interest and that Austin and Hanson were jointly and severally liable to pay £122,900 plus interest.
The judge also ordered that they pay costs to TPR and Dalriada.
TPR used Section 16 of the Pensions Act 2004 which allows it to apply to the High Court for a restitution order, requiring those who have been involved in the misuse and misappropriation of pension scheme assets to compensate for the losses suffered.