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Investment scammer sentenced for contempt of court

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.”


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Whilst I am pleased that he has been held to account – a quick comparison; if I break into someone’s house and steal some cash, I might get a caution the first time, or perhaps 6 months. A second offence the same. Third time, minimum penalty 3 years.

    I’m pretty sure if I stole £14m in my first burglary I’d be a lot closer to the maximum tariff of 14 years.

    But this white collar criminal gets no custodial sentence for stealing the money, and only 6 months for thumbing his nose at authorities.

    With such draconian penalties it is difficult to see why fraudulent investment scams are so popular.

  2. Julian Stevens 4th March 2019 at 4:50 pm

    The question that springs instantly to (my) mind is just who invests (or is persuaded to invest) in schemes like this based in places like Sierra Leone, Brazil and Australia instead of conventional collective investment schemes?

  3. @Julian Stevens

    That is easy; most people will tend to trust what they are told. Regulation isn’t mentioned, so unless people know that investments should be regulated there is no issue there, and the investment will sound thoroughly believable, and will offer ‘guaranteed’ returns equivalent to long term equity returns without the volatility.

    If it existed everyone would want it – which is of course the point.

    There needs to be sufficient disincentive for scammers to scam – you’ll never persuade all of them to go legit, but if we can reduce the number thinking it’s an easy option the world will be a better place.

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