A man behind a land investment scam has been sentenced to serve six months in prison for breaching a court order intended to recoup more than £14m lost by his fraud victims.
The FCA flagged up the ruling in an update published today about Robert McKendrick who breached freezing injunctions by diverting funds and failing to disclose information about his assets.
Between 2009 and 2013, consumers were persuaded to invest in rice farm harvests in Sierra Leone and in carbon credits intended to be generated from land in Sierra Leone, Brazil and Australia.
The FCA launched legal action in July 2013 in respect of the operation and promotion of the four schemes and also in respect of the false and misleading statements made to consumers by individuals involved with the schemes.
Last year the High Court ruled Capital Alternatives Limited, Renwick Haddow, Marcia Hargous, Robert McKendrick and others should pay a total of £16.9m in for their roles in four unauthorised collective investment schemes.
These were unlawfully promoted to the public by false, misleading and deceptive statements.
Then McKendrick was ordered to pay more than £14m in compensation.
He was the main director and sole shareholder of African Land which was the scheme that unlawfully promoted and operated without authorisation from the FCA.
McKendrick was also knowingly concerned in the Capital Carbon Credits scheme in Sierra Leone, which was also operated and promoted unlawfully.
Now High Court Judge Marcus Smith has sentenced Robert McKendrick to six-months in prison for breaching a court order meant to recoup money for investors.
Judge Smith rejected arguments from McKendrick’s lawyer Adam Tear who says his client was only guilty of mismanaging the financial affairs related to his rental property business.
Tear argued McKendrick was not purposefully trying to hide his assets, but rather was out of his depth in managing paperwork.
McKendrick apologised and conceded that payments supposed to go into a Barclays account ended up being sent to an account managed by his wife.
He also acknowledged that he did not notify the FCA after a freeze was put on the Barclays account.
But Judge Smith said monies were paid away and used by McKendrick for his own benefit.
The court indicated that McKendrick would have received a 12 month sentence but for his admissions and his genuine attempt to remedy his failures to provide full and accurate information.
FCA executive director of enforcement and market oversight Mark Steward says: “In this case, Mr McKendrick misled investors and then, in contempt of court, failed to comply with court orders requiring him to properly account for the losses. The FCA will ensure that defendants who mislead investors are held to account to the fullest extent possible.”