There is growing concern about Peter Moat and Sara Moat of Fast Pensions. There have been a number of Pensions Ombudsman’s determinations which expressed concerns about the maladministration of the unlicensed firm owned/run by the Moats.
One of these was reported by FT Adviser on 10th May 2017:
The article stated the Pensions Ombudsman had told Fast Pensions it must pay out a death benefit to the widow of a former client after the company was accused of purposely delaying payments and quoted the Ombudsman as saying: “We have dealt with a number of other cases recently involving Fast Pensions, where there have been continued failures to respond to requests.”
The Ombudsman went on to cite delays and maladministration on the part of Fast Pensions which caused much distress and inconvenience to the complainant. Apparently, Fast Pensions has failed to comment and Karen Johnston, Deputy Pensions Ombudsman, has said: “We have dealt with a number of other cases recently involving Fast Pensions, where there have been continued failures to respond to requests and payment/transfer applications. Fast Pensions has also failed to communicate effectively with this office.”
A number of very distressed and worried members of the Fast Pensions scheme have contacted me and asked me to help them find out why they can’t transfer their pensions out (as is their statutory right). I filled in the contact form on the Fast Pensions website (there was no address, email or contact number on the site) and was contacted by James Porter. He told me that after some administrative problems in 2016, he had been appointed in January 2017 to look after the pension queries for Fast Pensions.
He also said he was dealing with all the members and the Ombudsman. However, the members have claimed Porter takes days to respond and that Fast Pensions have failed to pay compensation they were awarded and to facilitate transfers out.
CONTACT DETAILS
Porter’s email address is james.porter@fastpensions.co.uk and Fast Pensions have just changed their postal address from PO Box 4385 08121954: Companies House Default Address Cardiff CF14 8LH to Crown House 27 Old Gloucester Street London WC1N 3AX on 18 May 2017. This is a virtual office with thousands of companies registered there and nowhere near where Porter appears to be based in Manchester or where Moat is based in Javea, Alicante, Spain. There is nothing wrong with using a virtual address – I use a UK one myself as I am resident in Spain. But then I don’t run a pension scheme and the members suspect – perfectly understandably – there has been a deliberate attempt to make it difficult to contact anyone at Fast Pensions.
When we spoke a week or so ago, Porter – a very personable gentleman – assured me he was dealing with everything assiduously and that there would soon be a contact number and address so that worried members could contact the company. He told me there were about 400 members in total and he reassured me that the assets of the schemes were unregulated long-term loans held within bonds. What I relief! He said he would be sending out a newsletter to update all those who are so anxious to know whether their pensions are safe and are desperate for news as to when they can transfer out. Unsurprisingly, nobody has any confidence in the custodianship of their pensions.
There are a few worrying things about Fast Pensions – apart from the various Ombudsman’s determinations, the numerous worried members and reports of liberation and tax demands – and that is that Sara Moat resigned as a director on 17.3.17 and then a Sara Grace Moat (with the same date of birth) was appointed as a director on 6.4.17. Sara, or Sara Grace, is also director of Fast Enrolment of Gilbert Wakefield House Bewsey Street Warrington WA2 7JQ.
Would you buy a second-hand house from the Moats?
Peter Daniel Moat and Sara Grace Moat have been involved in a string of businesses called Blu somethingsomething… Blu Debt, Blu Property, Blu Property Group, Blu Financial Services of Cinnamon House, Cinnamon Park, Crab Lane, Fearnhead, Warrington WA2 0XP etc. As director of Blu Debt, Peter Moat introduced one victim to Stephen Ward’s Ark pension scam – and charged him £500 for “advice”.
The Moats also have a business in Javea called DEYSE INVESTMENTS SL plus Blu Holding Group, Desinplot, Desysins, Deysecomunic, Deyserents, El Arenal de Deyse, Property Exchange. I feel exhausted just thinking about running so many businesses and think I can understand why Fast Pensions has not received the attention it deserves when the Moats have so many other ventures – all based in Javea, Spain. The address for some of these businesses is Avenida la Llibertat 31, Javea 03730, Alicante. But who knows – it could equally be somewhere in Moraira at Stephen Ward’s office, or at LettersRUs next to Barclays Bank.
I have asked James Porter who the trustees are and for a complete schedule of the scheme assets. Many of the members suspect that Mr. Porter is actually Peter Moat. If this is true, then it is hard to understand why he would hide behind his pregnant wife. When their baby is born – and I do of course wish them well – I hope they will be more decisive about names than Sara Moat is with her directorships on Companies House.
Meanwhile, there are 400 people worried sick about their pensions. And I am concerned that the track record which is in the public domain in both the UK and Spain does not inspire confidence – neither does the Moats’ inability to spell the word “blue”. Further, the fact that the underlying assets of the scheme are unregulated loans and that the trustees are an unknown entity.
Nice as James Porter was when we spoke by phone, and sincere/reassuring as he sounded, I am afraid this has undeniably got all the hallmarks of a typical, bog standard scam. It looks, sounds, feels, smells like a scam. The victims are not stupid. Neither is the Pensions Ombudsman. The jury is out on the Pensions Regulator. I still wish and hope that it is not a scam and that the victims will be able to safely transfer out their pensions and receive their awarded compensation without further delay.
THE PENSION LIFE TICK CAMPAIGN: now that Andrew Warwick-Thompson, Executive Director for Regulatory Policy at the Pensions Regulator is joining LGPS Central as CEO, it is time for him to help us to ensure all negligent ceding providers compensate their victims. No doubt Andrew will engage enthusiastically with this campaign and lead by example.
tPR Chair David Norgrove stated on 13.7.2010:
“Any administrator who simply ticks a box and allows the transfer, post July 2010, is failing in their duty as a trustee and as such are liable to compensate the beneficiary.”
But on 29.12.2010, LGPS simply ticked a box, failed in their duty as a trustee, handed over a nurse’s pension to a bogus occupational scheme operating pension liberation, and is now liable to compensate her for her losses. The victim in question, Mrs. G, will be in the High Court as Representative Beneficiary of the Ark schemes to challenge Dalriada Trustees’ application to recover the loans on 19.6.2017.
Although LGPS did indeed perform badly in the case of Ark – handing over many thousands of pounds’ worth of pensions – the worst performing personal pension provider was Standard Life (by a mile). And Standard Life have rejected all the complaints made by their victims and refused to compensate them for their losses due to Standard Life’s failings.
STANDARD LIFE
The 2016 Report states: “During 2016 we engaged directly with our customers, investors and employees to review our strategy and ensure we continue to focus on the right areas. We asked these stakeholders to provide their views on what is important to them across our four sustainability priorities. This review highlighted a number of areas that matter most to our stakeholders including trust and transparency, governance, sustainable economic growth, cyber-crime, climate change, responsible stewardship, financial inclusion and decent work and pay. This input will also help focus our activity in 2017 and beyond.
If Standard Life are going to claim transparency and want customers to trust them, they have to prove they are capable of responsible stewardship. Handing over millions of pounds worth of pensions to obvious scammers neither inspires trust nor evidences responsible stewardship.
Standard Life declared a profit of £723 million in 2016 – after paying its four directors salaries in excess of £10.8 million – 40% of which was in bonuses. It is ridiculous, offensive and disgusting for Standard Life to fail to compensate the victims of fraud who are facing financial ruin due to Standard Life’s own failings.
There are only three questions to ask about Standard Life’s obligation to compensate its victims:
Did Standard Life simply tick a box and allow a transfer? TICK
Did Standard Life fail in their duty as trustee? TICK
Are Standard Life liable to compensate their beneficiaries? TICK
Don’t use Standard Life until they compensate their victims. Don’t put money in the pockets of these negligent people who pay their directors obscene salaries and lie about their company’s ethics.
Gambling is a very strictly controlled industry – and rightly so. Every individual jurisdiction has its own gambling or casino licenses which are usually very expensive and onerous to obtain and keep. Where large amounts of cash change hands every minute, it is obviously important to impose strict conditions and ensure that regulations are complied with.
The city of Las Vegas sprang up in the middle of a desert in 1905 in the hottest part of the world and has since flourished into a sparkling and magnificent centre for world-class gambling.
In the words of Rudyard Kipling: “If you can make one heap of all your winnings, and risk it on one turn of pitch-and-toss, and lose, and start again at your beginnings, and never breathe a word about your loss…..you’ll be a man my son!”
Kipling’s advice is clearly aimed at someone young; someone who has years ahead of him to get lucky; recoup his losses; start again; do a phoenix; learn from his mistakes and do better next time. But with pensions, a life-time of savings can be wiped out so easily on “one turn of pitch-and-toss” by entrusting an unlicensed adviser.
Here in Spain, the investment regulator – the CNMV – refers to unlicensed pensions and investments advisers as “chiringuitos” (which translates as “bar flies”). The CNMV helpfully publishes a well-written warning booklet to alert the public to the nefarious tactics of these scoundrels – copied below for the information of the gentle reader. However, in Britain we tend to be rather more direct and call them scammers. And Lesley Titcomb of the Pensions Regulator has come right out and said it: “scammers are criminals”.
So, make sure you only use an advisory firm which is licensed to provide pension and investment advice. And avoid the chiringuitos, scammers and criminals. I have no idea who the jolly pair of gamblers are in the photo on this blog, but I am sure no informed person would entrust them with a pension and I reckon Kipling would have had a thing or two to say about them.
Away from the fun fun fun of Vegas, these two amiable-looking scallywags could probably scrub up and look like respectable independent financial advisers with a business-like suit and a leather portfolio full of impressive documentation about funds with imaginative names such as “Symphony” and “Blackmore Global”. But if they did so without a license, they would be criminals.
SPANISH REGULATOR’S (CNMV) GUIDE (translated)
FINANCIAL CHIRINGUITOS (“IFA” FLY BOYS/SCAMMERS)
“CHIRINGUITOS” means entities offering and providing pensions/investment and advisory services without being authorized to do so. They are dangerous because in most cases the apparent provision of such services is just a cover for fooling victims into believing they are making a highly profitable investment. It is important to understand that high yields offered are often too good to be true: the bait to con ill-informed (naïve) investors to hand over their savings or pensions. When exposed, the “CHIRINGUITOS” simply disappear or change their names. They are simply swindlers.
Companies authorized to provide investment services (brokers, portfolio managers, IFAs, banks etc.) are subject to the rules governing the securities markets and strict controls by the supervisory bodies (CNMV and BanK of Spain). Only CNMV-registered companies are authorized to provide pension/investment services, after demonstrating compliance with specific legal requirements and standards.
CHIRINGUITOS are not attached to the Investment Guarantee Fund, so that investors are not protected in the event of insolvency of the entity (authorized entities contribute to these protection funds through compulsory subscriptions).
There is no particular type of victim because often scams are very elaborate. Victims can be small businesses, individuals or professionals who fall for credible-sounding false promises of quick wealth and easy gains.
In short, to trust a CHIRINGUITO is a sure way to lose capital, with no investor protection under the laws. How CHIRINGUITOS work
The channels used by scammers and boiler rooms to contact potential victims are no different from those that can be used legally by legitimate entities i.e. telephone, letters, e-mail, web pages etc. The difference lies in the way the scammers use these channels, the type of messages they convey and the general approach to achieving their goals.
The CHIRINGUITOS use databases (often obtained fraudulently) of people who, for example, have purchased a particular financial product, publication – or on occasion answered a survey about their tastes, interests and financial situation. Phone calls
Cold calling is one of the CHIRINGUITOS’ favourite contact methods. It allows them to directly exercise psychological pressure techniques. Cold calling is by definition unexpected but is legal, and in fact authorized entities often use it as part of their promotional campaigns. However, in the case of authorized entities, it is normal practice to call existing customers, so people know their data has been obtained legitimately. If the answer to what is being offered is “no” this is accepted politely. By contrast, the CHIRINGUITOS do not usually settle for a NO.
Mail
High-quality leaflets which are sophisticated, inviting and promising. These often request the recipients to contact them by filling out a form, calling by phone or by visiting their website. Internet, e-mail
The great success of the Internet as a direct marketing tool allows advertisers to access a wide mass of recipients more cheaply than traditional media (phone, mail). This fact, coupled with the possibility of anonymity, has led to abuse of the medium, such as spam or indiscriminate emailing of unsolicited products bordering on illegality. Recipient lists are often obtained unlawfully, in breach of data protection rules. Also, the address of origin of the messages are usually false, and also the subject headings are deliberately misleading. Spanish law decrees that commercial communications should be identified as such and prohibits sending emails unless they have previously been requested or expressly authorized by the recipient. No serious company would ever spam the public, as that would be invading consumer privacy.
When it comes to financial products and services, we must be very cautious about offers and information received, even if they have been requested or consented to. Financial fraud on the Internet can be carried out by more sophisticated means. Spam is just one of the possible mechanisms, because the Internet offers various tools to disseminate potentially fraudulent or questionable deals: boards, newsgroups, chats, or even sophisticated web pages.
Phishing
Another danger is “phishing”: emails that appear to come from legitimate financial institutions, which request personal passwords. These messages often lead to a website that imitates an authentic entity (although it may have spelling mistakes), which fools people into entering their personal data or passwords.
Pharming
Even more sophisticated is “pharming”: people who visit fraudulently-cloned websites can have their personal, confidential data collected by criminals. Never surrender personal or confidential business information to unknown persons. If a request for personal data appears legitimate, use an established phone number to double check. Also, don’t access websites via links, but type in the full URL and, if possible, install antiphishing and antipharming tools. Adverts
CHIRINGUITOS also advertise in newspapers, magazines or other media (such as television teletext) to offer opportunities which are much more attractive than traditional investments and promising to provide attractive opportunities (which, of course, are not so in reality).
Personal referrals
It is common for people to make their investment decisions based on recommendations from acquaintances or relatives whom they trust. Knowing this, sometimes the CHIRINGUITOS pay great benefits to the first customers, using their own money or from other investors; this is what is called a Ponzi scheme. In fact, those investors who unwittingly act as bait are only going to get limited performance at first and successive investments begin to generate losses. Then, the company will not respond to requests for repayment of capital and finally disappear with all the money invested.
Personalized investment recommendations should always be made by a professional entity authorized to do so, because what is good for one investor may not be for another, depending on their different personal and financial circumstances. Persuasion techniques
The list of boiler-room persuasion techniques cannot be exhaustive, since the arguments and methods are increasingly sophisticated. Therefore it is important to stay alert to any financial offer that is not from a known, registered party. Accurate predictions
A simple but very effective technique – using a large number of calls to impress potential victims with their knowledge of financial markets – half of which confidently predict the rise of a certain investment value and the other half predicting decrease of the same value. In the following days this exercise is repeated several time. Those targets who were given a series of successful predictions are contacted again. Now convinced of the infallibility of a company that has hit all its forecasts for several consecutive days, these people are willing to surrender their savings to the CHIRINGUITOS. Appearance of respectability and success
CHIRINGUITOS know it is essential to look respectable and seem like financial market experts. So they dress smartly and elegantly and rent luxury offices. Sometimes it is difficult to get an appointment to meet them because they want to give the impression of being busy and in high demand. Incomprehensible explanations and use of technical jargon
CHIRINGUITOS promoting fraudulent investments talk with confidence and mastery of technicalities that make them look like experts on the subject. In fact, the aim is that the potential victim does not understand anything and chooses to trust those who seem to be experts who know what they are talking about. Offering large profits with little risk
CHIRINGUITOS promise much higher returns than can be obtained from a conventional investment with minimal risk. A basic principle that all investors should bear in mind is that profitability and risk go together inseparably. The possibility of obtaining high yields always involves taking high risks. Be wary of any offer that ensures high returns without risk. Insistence on an immediate decision
Urgency is a major factor, not only because they want to get their hands on your money asap and with the least possible effort, but because they know that if the investor has time to think properly about the offer, or seeks professional and reliable advice, he will probably reject the offer. So, CHIRINGUITOS use tricks aimed at achieving an immediate decision to try to convince the victim that they are offering a unique opportunity that will expire soon. Investors should be aware that this is not true: there is always time to assess the characteristics of a financial offer and to make sure it is suitable. Psychological pressure
The conversation, either by phone or by any other means, usually begins in a cordial fashion, but if the targeted victim shows some potential resistance the scammer can become more aggressive. This constitutes a fundamental difference between the CHIRINGUITOS and the authorized entities, who always respect a prospect’s right to not be interested.
Although psychological pressure can take many forms, here are some common tricks:
Not taking no for an answer
Being repeatedly insistent
Becoming increasingly aggressive
Questioning the intelligence or ability of the investor to make a decision
Conveying the idea they are doing the victim a big favor by offering exceptional gains
Making it clear it would be absurd to question the promises made
Using warnings such as: “you’ll regret it if you don’t go ahead” or “you’ll never get rich if you ignore my advice”
When to be suspicious of a financial offer
Most of the techniques used by CHIRINGUITOS would not be used by authorized firms, since they are subject to strict rules of conduct. Authorized firms are required to keep customers properly informed and to provide information to investors fairly and clearly. In particular, they must provide information about their services and financial instruments, so that the client knows the nature and risks of the investment service that it is going to provide and the characteristics and risks of financial instruments offered.
It is therefore important to understand the difference between people or entities who are authorized to provide investment services and those who only intend to carry out a scam. When an authorized firm sells a product, the customer must request information on their knowledge and experience in this product, in order to assess for himself whether it is suitable for him. This is called a suitability test.
When a broker is going to provide investment advice or manage an investment portfolio, in addition to asking about the client’s investment knowledge and experience, he should request additional information such as the financial situation and investment objectives of the client (risk profile, time-frame etc.) – as proper financial advice is always personalized.
The boiler room scammers’ only aim is to attract money from their victims, so they do not care about their clients’ expertise in investments and financial circumstances – all they need to know is that they are willing to invest. The contact must have been requested by the prospect
Authorised entities have to work with personal data in a legally-compliant manner, and the client must have given them permission to make commercial offers. But if an entity of which we have never heard contacted us to offer an investment, you have to take extra precautions because this is probably a scam. Authorized entities never pressurise customers
Any investment should be approached with sufficient knowledge of the characteristics and risks of the product. It is important to do thorough research before committing. The investor needs time to decide and get answers to all their questions. However, scammers pressure the victim to get an immediate yes, without giving them a chance to reflect. How to protect yourself against a possible CHIRINGUITO
Promises of exceptional returns without risk should make us suspicious immediately. Never trust an unknown entity until they have been able to verify that they are properly authorized to provide investment services. The investor has available the following protection mechanisms which should always be used before handing over capital:
Request information from the supervisory body, in this case the CNMV
Identify any peculiarities about the investment proposal
Demand concrete answers and make sure they are fully understood
Ask for information from the CNMV
The Investor Assistance Office of the CNMV is at your disposal to inform you whether entities are authorised to provide investment services or not. If you have been advised to deal with a company that has been referred/recommended, you should call the CNMV for assurance that it is an entity which is authorized, registered and supervised. Public records are also available through the website of the CNMV (www.cnmv.es). Investors can also visit the website of the International Organization of Securities Commissions IOSCO, (www.iosco.org) where there are warnings and advice available.
The CNMV regularly issues warnings about entities which are suspected of providing investment services without authorization. These warnings may come from the CNMV (when it is aware of the existence of possible CHIRINGUITOS through inquiries or complaints from investors) or which have been supplied by a foreign regulator (bear in mind that CHIRINGUITOS may operate their fraudulent activities in more than one country).
To make it easier for investors to identify entities operating without authorization, the website of the CNMV provides a search engine that can locate them quickly and easily. Entities that have not been placed on the warning list may not yet have been detected by the supervisory bodies. It is important to remember that although most of the victims of fraud contact the CNMV after losing their money, it is always preferable and much less expensive to conduct this consultation in advance, i.e. before handing any funds over.
Identify the characteristics of the proposal
Sometimes, the activities of the CHIRINGUITOS are masked under the guise of consulting services, in which in the client is charged a high commission on their investment (which also often adds to the total loss of the capital). However, all entities making personalized investment advice must be registered on a public registry, so that potential victims can see whether or not a firm or person is authorized to provide this service.
Generally, CHIRINGUITOS require funds to be transferred to a current account (sometimes abroad) on behalf of a non-Spanish company. In general, any offshore entities are not authorised or regulated. The investments tend to be complex financial products in unknown foreign markets.
There are often entities or websites that offer investors the opportunity to invest in foreign exchange derivative products (CFD, futures, rolling spot contracts etc.). The forex market (foreign exchange) is very complex, so any access to this should only be done by authorized entities.
Scammers are often reluctant to provide updated information or respond to questions from the investor, although they promise that they are offering a relationship based on mutual trust. But remember that trust is something that must be earned, the more so when it comes to giving your money to organizations or persons who have failed to establish their legality, professional integrity or solvency.
Insist that any adviser provides clear answers to questions. The investor not only has the right but also the duty to know in advance all relevant aspects of the proposed investment. One of the main differences between authorized financial institutions and CHIRINGUITOS is that the former invite investors to ask questions and then provide all necessary answers and information, while the scammers try to make their targets feel ignorant, and to trust them blindly.
Below are some questions to ask the advisers to see whether they are CHIRINGUITOS. In fact, many of these questions, particularly those relating to the characteristics and risks of the investment should also be made when dealing with authorized entities. The difference is that scammers will be unwilling to provide clear answers:
How did you get my name and contact details?
Why are you making contact with me?
Is your firm registered with the CNMV and the Bank of Spain?
Is your firm supervised by any public authority?
Are you a member of any investment protection/guarantee scheme?
How long have you been with the firm?
What is your professional experience?
Is there any financial entity which can give you or your firm a reference?
Does the investment you are proposing match my objectives and is it suitable for me?
What are the risks of this investment? How much could I lose and under what circumstances?
How would I profit from this investment?
What has to happen for the value of this investment to increase? (i.e. interest rate or stock market rises?)
For how long do I need to keep the investment?
What is the liquidity of the investment i.e. how and under what conditions can I get my capital back if I need it?
What commissions are payable? How are they calculated? Can I have a copy of the fees/rates?
Can I have a copy of the documents/contracts that I have to sign (to read carefully before signing them)?
Is there any official document regarding the investment at the CNMV regulator? Can I see it?
Can you give me a written detailed explanation of the investment to read/digest carefully and a second opinion?
Can we discuss the proposed investment with my lawyer or with a trusted financial expert?
If anything goes wrong with my investment, what avenues of redress or compensation do I have?
Just asking these questions is not enough. CHIRINGUITOS are expert at being persuasive and evading answering questions with plausible excuses. This is why it is essential to check out any person, firm or investment with the CNMV before handing over any funds.
Steve Pimlott of Windsor Pensions is still scamming people out of their pensions. And seeking new victims on LinkedIn. Inviting people to:
Transfer your frozen UK pensions to a QROPS
Still scamming after all these years
He will charge between 10% and 20% and will use forged documentation from an obscure QROPS such as Danica and BSEC and then fool the ceding provider into transferring a pension into a fraudulently-set-up bank account in a dodgy jurisdiction such as the Isle of Man.
Pimlott – who may also go by the name of Steve Derrick Pimlott – claims to have done many thousands of these transactions and states that only a couple of hundred people have ever got caught by HMRC. And even then, he says, as most of the people live offshore they ignore the tax demands of 55% on the amount liberated. HMRC’s version of events is somewhat different and tell me that in some cases Pimlott made off with the whole transfer and the victim never even got the 80% or 90% that was left.
Pimlott involved a firm allegedly called Insignia Financial Services in some of the cases. Although this gave some of the victims an illusion of respectability, the firm was in fact a clone of an FCA-registered entity.
Dozens of properties as opposed to Ward’s mere six
Pimlott is reportedly in Florida – not too far from Stephen Ward’s Indian Point holiday villa empire. Ward also told his victims to throw the tax demands in the bin. However, Pimlott’s property portfolio is considerably larger than Ward’s. If Pimlott is telling the truth about having done 5,000 liberations, then HMRC will be pretty busy. If we assume the average pension pot size was, say, £50,000 and Windsor Pensions charged 15% fees for each one, then Pimlott earned a cool £37.5 million. And herein lies the problem: while these scammers are earning such huge amounts of money, they are hardly likely to give it all up voluntarily.
I hark back to the Pensions Regulator’s Lesley Titcomb’s statement that “scammers are criminals”. Steve Pimlott and his associates are criminals. They need prosecuting, given maximum jail sentences and their assets confiscating. The industry needs to get behind this and support the pressure that must be put on law enforcement agencies in the UK, USA and beyond.
Ceding Pension Providers ignored warnings about scams
HMRC say there were sufficient warnings about pension scams in the public domain for years. In 2009, the FCA warned about a rogue firm called Cash In Your Pension operating liberation scams; HMRC warned about pension liberation scams involving rogue IFAs. Yet still the ceding pension providers carried out zero due diligence. For years they just kept handing over thousands of pension pots to the scammers without a thought to the financial ruin they were inflicting on the victims.
Hopefully, now the Pensions Regulator’s Andrew Warwick-Thompson is going to work for one of these negligent pension providers – LGPS – he will help bring these companies to justice as well.
Readers may have seen the HMRC News Release on 22 June 2009 which confirmed 11 people, including some independent financial advisers, were arrested following raids in the North West and Midlands. These arrests were linked to an estimated £2.5 million suspected tax relief fraud involving bogus pension schemes. Enquiries are continuing in that case.
Pension Schemes Services (PSS) and other areas of HMRC are continuing to work closely with our regulatory colleagues to ensure that the interests of members are properly protected through bona fide pension schemes and that the generous tax reliefs available through employer/member contributions are not abused. We will vigorously pursue those who deliberately attempt to defraud the public purse.
Shedding a tear or two at the departure of tPR’s Head of Willy Waggling
Bye bye Tinky Winky. Good luck and have fun at LGPS!
His next challenge will be to lead by example and ensure negligent ceding providers compensate their victims whose pensions were transferred into scams. And he can start with LGPS as a shining example so the rest can follow.
As Tinky Winky sails off into the sunset and leaves his regulatory willy waggling duties behind, his first mission is to understand the other side of the coin: the transfer of £millions from secure pensions into the trousers of the scammers. He will now see with a fresh pair of eyes how ineffective tPR has been – and how negligent the ceding providers were.
Winky is going to have quite a mess to clean up when he gets to LGPS – so he had better make sure he takes Noo Noo with him.
Will probably need more than 1 Noo Noo – in different sizes for all the mess at LGPS
And I am sure he is going to be cheerfully looking forward to working even more closely with me from now on.
On June 19th, the Secretary of the Ark Class Action – Mrs. G – will be in the High Court as the Representative Beneficiary for the Ark victims challenging Dalriada Trustees’ Beddoe application. Dalriada, appointed by tPR in May 2011, have already spent around 15% of the £30 million Ark fund. They are now seeking the court’s permission and directions to use even more of the victims’ funds to take legal action against them to recover £11 million worth of liberation loans. This will result in financial ruin for most of the victims – many of whom will lose their homes. HMRC say the loans will remain taxable even if they are repaid so there is the real possibility that members will face two sets of crippling proceedings.
Mrs. G and the other Ark victims – originally 487 of them but now significantly fewer as some have died (some as a result of taking their own lives) – became victims because HMRC and tPR took way too long to take action to suspend the schemes. Also, the schemes were registered negligently in the first place – tPR allowed fourteen occupational Ark schemes to be registered by the same person without there being evidence of any intention or chance of the sponsoring employer being a bona fide employer.
Between August 2010 and August 2011, dozens of personal and occupational pension providers cheerfully handed over £30 million to the scammers with utter incompetence, no due diligence and complete disregard for all the dozens of warnings which had been put out by HMRC and tPR for many years.
In particular, these negligent ceding providers ignored this one issued by tPR Chair David Norgrove on 13.7.2010 just before Ark was launched: “Any administrator who simply ticks a box and allows the transfer, post July 2010, is failing in their duty as a trustee and as such are liable to compensate the beneficiary.”
I shall be looking forward to my next meeting with Tinky Winky because he will be able to bring a wealth of first-hand knowledge and experience to the table. I will probably be bringing Mrs. G to the meeting with me. Because guess who her negligent ceding provider was? Yep, you guessed – LGPS.
BACKGROUND TO THE NEGLIGENCE OF CEDING PROVIDERS SUCH AS LGPS:
The Ark schemes were launched in 2010 by – among others – Stephen Ward of Premier Pension Solutions S.L. and Premier Pension Transfers Ltd. The six Ark schemes had been registered by HMRC and the Pensions Regulator with no due diligence by either to establish whether the schemes had been set up with the specific purpose of operating pension liberation; whether they were bona fide occupational pension schemes set up by a sponsoring employer which intended to trade and provide employment; whether there was a competent trustee and board of trustees in place; whether there was a clear Statement of Investment Principles or whether there was ever any realistic prospect of the schemes providing member benefits.
At around the same time, a multi-million pound occupational pension scam was being vigorously promoted by James Lau of Wightman Fletcher McCabe while the administrators/trustees of the scheme, Andrew Meeson and Peter Bradley, were under criminal investigation for cheating the Public Revenue (and were subsequently jailed). Also, former barrister, solicitor and porn star Paul Baxendale-Walker was promoting a whole series of liberation scams unhindered by the authorities – despite having been firmly in the spotlight since 2007 as a passionate advocate of liberation. And KJK Investments/G Loans was a further liberation scheme flourishing at around the same time, having been started in 2009.
By the time Ark was getting well underway, tPR (formerly OPRA) was fully aware that liberation scams were proliferating and that the feeble warnings they had made back in 2002 about scams which had been operating as far back as 1997 had reached neither the public nor the industry effectively. In 1999, tPR had been investigating two scammers – Stephen Russell and William Ferguson – for a £6m pension fraud. The pair were jailed for five years in 2003.
In fact, tPR were fully aware that since 1999 pension scams were on the increase, and yet did not make it clear to ceding pension trustees what their statutory obligations were in respect of transferring victims into scams. On 13.7.2010, tPR Chair David Norgrove stated that: “Any administrator who simply ticks a box and allows the transfer, post July 2010, is failing in their duty as a trustee and as such are liable to compensate the beneficiary.” But pension trustees claim they never read that message (let alone heeded it) and that it was neither publicised nor distributed. Further, in the same year Tony King, the Pensions Ombudsman, reported that he had “found that pension trustees failed in carrying out serious fiduciary responsibilities to others in circumstances in which the law specifically states that they should not be protected from liability.” And still tPR did nothing. And the Pension Schemes Act 1993 was not amended to reflect the urgent need to protect the public.
The Scorpion Campaign was launched by tPR in 2013 after fifteen years of failing to warn the public sufficiently, and omitting to make it clear to trustees what their statutory obligations were to pension scheme members. During this period, the pension scam industry matured into a deadly serious and well organised large-scale operation in the UK, with many new “players” coming into the arena having been trained by Stephen Ward and other founders and pioneers of early scams.
It was – by the time Scorpion dribbled weakly and ineffectually into the arena – well known to tPR what the typical characteristics of pension scams were and what phrases and claims were habitually being made by the scammers to dupe their victims into signing over their gold-plated pensions into worthless, toxic schemes and being financial ruined. Among the many key phrases (such as “your pension is frozen”; “tax-free loan”; “guaranteed 8% returns” etc.), was the most powerful of all: “the scheme is HMRC approved”. There was, of course, no such thing as HMRC were as guilty of lazy, box-ticking negligence as the culpable ceding provider trustees. But to this day, tPR has done nothing to dispel this myth, and in fact even continues to help the scammers by using the same incorrect phrase on its own website: “If you are required to register a scheme with TPR that does not require HMRC approval, please contact us.”
Even by the time tPR had published the feeble Scorpion campaign in February 2013, the scammers acknowledged this was having a negligible effect on their various scams, and merely moved the goalposts a little to avoid detection. Capita Oak, Henley and Westminster continued to operate successfully beyond February 2013, but only a few ceding pension trustees either noticed Scorpion at all or took any steps to put into practice the minimal due diligence suggested by Scorpion.
In the full knowledge that Stephen Ward was one of the most prolific pension liberation scammers, tPR took no action to suspend any schemes in which he was involved. As a consequence, in August 2014, a Police officer was scammed out of his Police Pension by Ward’s Dorrixo Alliance and into the toxic London Quantum scheme. In fact, far from having any widespread effect, the multitude of scams continue to this day unaffected by tPR’s dismal attempts to protect and inform the public.
PENSIONS REGULATOR’S OBLIGATIONS AND OBJECTIVES:
According to their own website, tPR’s statutory objectives are set out in legislation and include promoting and improving understanding of the good administration of work-based pensions to protect member benefits. These objectives are detailed below with notes in bold.
to protect the benefits of members of occupational pension schemes tPR has failed to do this and as a result of repeated failures over a period of more than fifteen years has facilitated the scamming of thousands of victims out of millions of pounds’ worth of occupational pensions and into millions of pounds’ worth of tax liabilities
to promote, and to improve understanding of the good administration of work-based pension schemes tPR made no effort to work with administrators and trustees of schemes such as Royal Mail; local authorities; the NHS, the Police etc., to help them improve their understanding of how to avoid transferring victims into scams
to reduce the risk of situations arising which may lead to compensation being payable from the Pension Protection Fund (PPF) Through multiple failings over a period of more than fifteen years, tPR has exposed the PPF to huge amounts of compensation claims. This is paid for by the ethical, compliant sector of the financial services industry who are understandably deeply unhappy that they have to bear the cost of tPR’s negligence and omissions
to maximise employer compliance with employer duties and the employment safeguards introduced by the Pensions Act 2008 tPR has done nothing to ensure that occupational pension schemes have a bona fide employer that either trades or employs anybody – or even exists at all
One thing which tPR omits to state as being one of its obligations or objectives, is to take action to prevent pension scams in the first place by carrying out due diligence on the trustees, administrators or sponsors of a scam before registering it. In fact, it is clear from evidenced facts, that what should have been simple common sense in terms of basic, obvious vigilance and diligence, was not done. No questions were asked; no checks were made; no basic suspicions were raised. There is no evidence that anybody at tPR ever had the intelligence to ask questions such as whether schemes repeatedly administered by Stephen Ward or his accomplice Anthony Salih and registered to 31 Memorial Road posed any risks to the public.
Over the past couple of years, numerous “whistle blowing” reports have been made to tPR by members of the Class Action but they have been studiously ignored. At a meeting in April 2015, tPR were invited to work with (rather than against) the Class Action, but this too was ignored. Also at this meeting, the Capita Oak case was discussed. The Insolvency Service subsequently wound up the trustee of Capita Oak, Imperial, but tPR has taken no action to protect the members’ interests and has left 300 victims facing the loss of £10.8 million worth of pension transfers which were 100% invested in Store First store pods (now arguably worthless). The Henley and Westminster victims are facing a similar fate with zero intervention by tPR.
In 2014, evidence of Stephen Ward’s pension scam portfolio was handed to HMRC – including numerous occupational schemes and a pension trustee company: Dorrixo Alliance (registered at 31 Memorial Road, Worsley). However, neither HMRC nor tPR carried out any due diligence to see how many scams were under the trusteeship of Dorrixo and the toxic London Quantum scheme slipped through yet another gaping hole in the net, leading to dozens of victims losing £ millions of pension funds (including final salary ones).
Reverting back to 2010 when the most damning of tPR’s multiple failings started, hundreds of people were left to be scammed into the Salmon Enterprises scheme with no warnings by tPR that the administrators were under investigation for fraud, and thousands of people were left to be scammed into the various Baxendale-Walker and KJK Investments schemes. Along with Ark, 2010/11 alone accounted for well over a quarter of a billion pounds’ worth of pension fund losses and crippling tax liabilities. And this excludes the dozens of scams still being run by Stephen Ward to this day and which tPR continues to ignore. In fact, it has recently been reported that pension scams are by now accounting for over £10 billion worth of losses so the 2010/11 figure may well be substantially higher in reality.
“James Hay was ONLY the pension administrator”. My hat!
JAMES HAY AND ELYSIAN BIOFUELS SCAM
I always say that pension and investment scams happen because people, firms and authorities allow them to happen. This was very true in the Elysian Fuels pension liberation scam. Jack Gilbert of New Model Adviser broke the news today, 9.5.2017, of James Hay’s involvement in this:
Sipp and platform provider James Hay is facing an HM Revenue & Customs tax charge of £1.8 million over the non-standard biofuel investment Elysian Fuels. James Hay today said it has 500 clients who have invested around £55 million in Elysian Fuels and HMRC is investigating this scheme.
And the firm added it is now appealing a tax charge from HMRC over this investment.
‘James Hay did not advise investors in relation to these investments; it acted solely as pension administrator. James Hay has received, in April 2017, assessment notices for sanction charges from HMRC for the tax years 2011/2012 and 2012/2013 in total for £1.8 million. These have been appealed and are the subject of ongoing discussions with HMRC.’
The investors themselves, whose SIPP investments are now worthless, will undoubtedly be interested to know the real story behind this disgraceful scam – which also involved other FCA-regulated SIPP providers such as Suffolk Life:
The arrangement I heard about today works like this as an example ( ignoring fees) and this is the simplistic version
Client borrows 16k or thereabouts (this is available in the package)
He gets a non-recourse loan (which will not be repaid) of £84k
He buys shares in Xco for £100k. These are listed on the CISX (name is Elysian)
Transfers £100k to James Hay SIPP
SIPP pays member £100k for the shares .,,,
Member repays the 16k and trousers £84k
My IFA connection has done 40 of them so far. Advice to transfer to the SIPP is from an FCA regulated IFA. James Hay and Suffolk Life know the full structure and are happy with it ….Fees ….. On transfer to SIPP (need to agree the commercials with the IFA)
Regards
Stephen
The FCA-registered IFA was Angela South’s Magna Wealth. We’ve had quite a good old chin-wag over this and while she said she did suspect I had hacked her emails, she denied she had done 40 of these transactions. In fact, the only hacking I have ever done was plodding round Windsor Great Park on an elderly horse when I was a teenager.
But don’t you just love James Hay’s protestation: “we acted solely as pension administrator”? Solely? Pull the other one. Come on FCA – wake up! Perhaps we could have a competition between tPR and FCA to see which one could start doing some actual regulating first? Tortoise and tortoise race?
The Pensions Regulator’s plans to start regulating
The Pensions Regulator has sent out a clear message in the Johnsons Shoes case where an employer failed to comply with its legal obligations regarding workplace pensions:
This was clearly the right course of action for the regulator to take and will both encourage some employers to be compliant and discourage others to avoid compliance failures.
But here is a curiously anomalous situation: I can find no evidence that the company just fined £40k by the regulator has ever scammed thousands of victims out of millions of pounds’ worth of pensions and left them with crippling tax liabilities. Many of these victims have had heart attacks and strokes as a result of the stress of being scammed. The employer, Johnsons Shoes, sanctioned by tPR, has been in business for 25 years and it is possible that one or two customers might have experienced the odd blister if the hand-made shoes were too tight. But my search for skeletons, scams or scandals came up with nothing more serious than the fact that they can’t spell the word “paid” on their website.
A little birdie has tipped me the wink that LaLa has had a quiet word in TinkyWinky’s shell like and told him that now he has got a taste for a spot of regulating, he really ought to up his game and sanction some of the outright scammers (i.e. criminals). There is a touch of embarrassment now that a long-established family business has received such a high-profile and high-value fine, while the worst sanction that has ever been handed out to criminals is the odd flaccid waggle.
Tinky Winky’s first dilemma is how to catch the scammers. Shoe shops are easy because they don’t tend to fly away to exotic places like Gibraltar and Malta but stay neatly sandwiched between a travel agent and a book store. The Insolvency Service very helpfully named 18 of the scammers in the Capita Oak, Henley and Store First SIPP investment scams which cost over 1,000 victims over £100 million worth of pensions plus tax liabilities. And I am sure all these criminals will be relatively easy to find in their various magnificent country mansions.
Once caught, the next dilemma will be to work out how much to fine them. My suggestion would be to simply divide £100 million by 18 – interestingly that comes out to £5,555,555.55 each. On top of that, the scammers should be made to pay the victims’ tax liabilities.
Speed is now of the essence to avoid the embarrassment that it took the Pensions Regulator more than four years to ban 5G Futures trustees Williams and Huxley and that the only action ever taken against Stephen Ward was a “severe dressing gown”.
If the shoe fits….
Tinky Winky has got to realise why there is the word “Regulator” in the Pensions Regulator – and if the shoe fits, he has got to wear it.
Another reason for the urgency of taking some long-overdue action against the criminals, is the part played in the financial ruin of so many thousands of victims by tPR itself. 14 Ark schemes, now in the hands of Dalriada Trustees, were registered by tPR; Capita Oak now in the hands of Dalriada Trustees, was registered by tPR; Westminster now in the hands of Dalriada Trustees, was registered by tPR (and tPR failed to spot that both Capita and Westminster shared the same non-existent sponsoring employer); London Quantum, now in the hands of Dalriada Trustees, was registered by tPR and its trustee was Stephen Ward who was behind Ark, Capita Oak and Westminster…….etc. etc.
The Pensions Regulator has warned employers not to ignore their automatic enrolment duties. It would be good to see the regulator’s duties clarified and restore some public confidence in the performance of this public body that is supposed to protect workplace pensions so that people can save safely for their retirement.
Pension Life is joining forces with another group action in order to set up the Fraud Victims Task Force. The objective of this initiative is to reinforce the campaign to protect fraud victims. As outlined in Greg Mulholland’s motion before parliament was dissolved, victims want to see prosecutions and sanctions against those who commit fraud. Further, they want to see a workable tax exemption regime for victims who are pursued for tax by HMRC in addition to pension and investment losses they have suffered.
AIMS AND OBJECTIVES OF THE FRAUD VICTIMS TASK FORCE
To unite victims of financial fraud, abuse and mis-selling – and give them an effective voice
To campaign for positive change to defend victims’ rights and interests
To call for a change in the law to introduce an exemption for tax liabilities arising as a direct result of fraud
To investigate, analyse and summarise patterns of financial fraud which result in tax demands
To report on the unjust result of victims rather than criminals being pursued and penalised by HMRC
To calculate the inequitable correlation between tax collected and the long-term cost to the State
To build strong reporting relationships between stakeholders in the industry to expose scams as early possible
To bring to justice negligent parties who facilitate financial crime and ensure they compensate their victims
To expose the failures in regulation and law enforcement which encourage fraud
To recommend improvements in cooperation of government, regulators, ombudsmen and law enforcement agencies internationally
FRAUD VICTIMS TASK FORCE STRUCTURE
The proposed Task Force membership – subject to acceptance by each individual member – is intended to cover all the disciplines required to produce an in-depth analysis and subsequent powerful report which identifies and quantifies the problem and recommends workable solutions for implementation by the government, HMRC, regulators, ombudsmen and police authorities.
The members of the Task Force will include the below functions and invitations for each position are being sent out currently:
Joint Chairs – representing the two Action Groups
Parliamentary Advisers – to be finalised after the election
Criminal Specialist – criminal and sports barrister
Financial Services Specialist (and Treasurer) – Chartered Financial Planner and pension transfer specialist
Mental Health Specialist (to advise on the effects of being a victim of fraud and HMRC simultaneously)
Ambassadors (high-profile celebrities from the world of sports and music)
Victims (members of scams such as Ark, Capita Oak, Salmon Enterprises, London Quantum and Trafalgar etc.
PROPOSED FRAUD VICTIMS TASK FORCE REPORT STRUCTURE – DRAFT
Outline the main types of pension and investment fraud
Describe how each type results in financial loss and tax liabilities
Provide examples of each type identified
Identify the “players” behind each type and example
Explain what regulatory omissions failed to prevent or sanction the individuals and firms
Quantify known losses and tax liabilities
Outline the impact on the victims and their families
Define how the government can lead a strong collection of measures to combat pension and investment fraud
Calculate the financial damage done to the public and the State by the present position and…
Calculate the potential financial advantages to the public and the State achievable through reform
SPOTLIGHT ON THE HIGH COURT ARK/DALRIADA BEDDOE PROCEEDINGS ON 19.6.2017
To highlight the problem, attention is drawn to the impending Beddoe proceedings in respect of the Ark matter. Ark was placed in the hands of Dalriada Trustees on 31.5.2011 and consisted of 487 members; £30 million worth of transfers and £11 million worth of loans. The reciprocal loan structure was judged to be a fraud on the power of investment by the High Court in November 2011 and Justice Bean determined that the loans were not validly made.
In the intervening six years, approaching 15% of the fund value has been spent on trustees’ and solicitors’ fees; Dalriada are now threatening to bankrupt the victims in order to recover the loans; HMRC are threatening to bankrupt the victims in order to collect 55% tax on the loans at both the receiving end and the making end – as well as 40% tax on the scheme itself. The tax will, according to HMRC, remain payable even if the loans are repaid.
Dalriada are asking the High Court for permission and directions to use the victims’ funds to pay for legal action to recover the loans. Few victims have sufficient assets or income to either pay the tax or repay the loans. Some have already died, either through stress-related diseases or suicide; many are very ill – mentally or physically; many will lose their homes. Even those who did not receive loans are being taxed because, according to HMRC, they transferred to Ark with the intention of receiving a loan.
Representative Beneficiary Kim Goldsmith (a community nurse) and her legal team, QC Keith Bryant and solicitor Trowers and Hamlins will be vigorously contesting Dalriada’s application.
Just goes to show that there is no let up in pension scamming
The Tonight programme “How Safe is My Pension” aired on Thursday 4th May. An undercover “sting” exposed the operation of a pension cold calling scam.
IFA Darren Cooke of Red Circle Financial Planning featured in the programme and spoke passionately about the dangers of cold calling. He ran a successful petition to campaign for a ban on cold calling. This attracted thousands of signatures in a short space of time and earned him widespread praise and respect from the financial services industry. Hopefully, after the election, whatever government we end up with will get back to the serious business of cleaning up the pension scamming industry and putting the scammers where they belong – behind bars.
WHAT MORE COULD THE PROGRAMME HAVE TOLD VIEWERS ABOUT PENSION SCAMS?
However, while one victim’s tragic circumstances were highlighted, I think the programme could have done more to feature the extent of pension scams; how many there have been during the past seven years; how much has been lost (many £ billions); how many people’s lives have been ruined; how many scammers there are in the UK and offshore and how many £ millions they have earned out of ruining victims’ lives.
The programme also missed two important regulation failings – cold calls are facilitated by the illegal sale of personal data – almost no victims understand this. Also, the promotion of unregulated investments to ordinary savers is an offence. A country that can’t enforce its own laws is a failing state. And enforcement takes far too long: it took the Pensions Regulator four years to take action to disqualify the shysters behind the 5G Futures pension scam – and there is still no news about them being prosecuted for scamming hundreds of victims out of £16 million worth of pensions which were invested in a plantation in Fiji. This despite the Pensions Regulator’s Lesley Titcomb clearly stating that scammers are criminals.
IFA Darren Cooke from Red Circle Financial Planning
The whole purpose of Darren Cooke’s cold calling ban petition was to draw attention to the enormity of the pension scamming industry and get the government to finally take some action. The regulators and the police have failed dismally to tackle the problem and address the point that the scammers are left free to operate scams over and over again. The public need to know just how prolific the scams and scammers are.
But this is the most tragic issue of all. Serial scammers train and coach the next generation. They teach the new boys the tricks of this filthy trade and then more scams spring up like rabbits on viagra. The regulators and the police stand by and let the scammers just get on with their next lucrative operation. And this is what must change – once and for all. The victims need protection for the damage already done to them. And new victims have to be warned of the dangers posed by the pension cold calling scammers as well as the introducers, administrators, promoters, distributors and trustees of various scams operating in the UK and offshore.
Remarkably similar logos with both Marazion and Perpetual
HMRC are now sending out the tax demands (protected assessments) to victims of the Axiom UPT Pension Loan Scam. And we are busy appealing them.
I have tried to contact Rex Ashcroft of Wealth Protection International to ask him what he intends to do to help the victims who were introduced to this scam by him, but he doesn’t answer the phone and doesn’t return my calls.
I have also emailed him and some of the other parties involved in this scam and we will see whether any of them get back to me. This is how Rex Ashcroft described the liberation mechanism to the victims:
John Vermunt has passed your details to me to provide you with the information you need to understand and proceed with accessing the value of your pension.
This email introduces you to a device called an Umbrella Pension Trust into which your existing pension is transferred, so that pension rules which are outside the scope of the business and commercial model that the day to day providers of pensions use, can be taken advantage of to restructure the way in which the assets within your pension pot are used, invested and managed in the future.
In short, you and the Umbrella Pension Trust’s Trustees are able to make and take decisions about how to use the money in your pot that is no longer subject to the restrictions and penalties imposed by pension regulations applying to the pension in its present format.
This mechanism has been in use now for nearly 20 years in one form or another and has until comparatively recently been reserved for the use of people with pension pots of a value in excess of £250,000 which is the reason why so many accountants and financial advisers have never heard of this way of restructuring pensions; the other reason of course is that 99% of the time financial advisers and the like simply need to provide a tax advantageous savings plan which enables their clients to salt away money that will generate an income for them when they retire, so sophisticated ways of handling such savings plans (pensions) like the umbrella pension trust are simply not required or within the scope of their day to day activities.
As with all financial transactions, the restructuring has to be done by appropriately qualified and regulated individuals but at the end of the day you must be aware that your pension remains a pension – you are not “cashing in”, “selling” or “borrowing against” your pension, you are simply executing transactions with your pension pot using a different set of rules. The umbrella pension trust is most definitely NOT a so-called Pension Liberation Scheme.
Your pension pot, under your control, continues to be maintained as a tax-free investment vehicle but the difference is that such investments are not restricted in any way as they are at the moment; a loan is an investment of course so if your pension lends you some money this is not income and therefore not taxable as income, so using this useful fact you can obtain “lifestyle support” from your pension by having cash in hand via loans to yourself.
Such loans are simply renewed at the end of their term and the original borrowed sum plus the interest that has accrued to it over the term of the loan are recreated as a new loan, and so on until you die. If your estate is valuable to the extent of being liable to inheritance tax then such accumulated loans can be used to reduce your estate value and thus the inheritance tax that might be due. The Trust “sequesters” or takes asset value from your estate in repayment of the debt you have created and this passes that asset value into the protection of the trust for the tax-free use of your beneficiaries; so they do not inherit asset value that then causes them a tax problem, instead they have the use of the asset you would otherwise have bequeathed to them completely tax free through the trust. If there is insufficient value in your estate to repay all the debt you have created then because English Law states that debt cannot be inherited the trustees simply write the debt off.
The Trustees of the Umbrella Pension Trust need to be outside the UK so they have the advantage of the necessary tax exemptions and Bay Trust in Belize is used, a firm that I have coincidentally personally used for a number of years now, they are friendly and efficient even if they are 5 hours behind us and have much better weather than we do!
We will try to jolly things along for you as best we can but because so many different stages of the process rely on so many different people it is most times impossible to actually give an answer to “how is my pension restructuring progressing”.
The fact will be though that it is indeed progressing and will take as long as it needs to take in order for it to be right within the law.
As I have already mentioned above somewhere, because restructuring in this way maintains your pension as a pension this exercise cannot be argued to be a so-called “pension liberation scheme” and nor does it attract a 55% tax bill by creating what is known as an “unauthorised payment”, so if you talk to anyone about what you are doing please do not be put off by negative comments like “that is rubbish you cannot cash in your pension before you are 55”, simply say that you are NOT cashing in your pension, say that your pension remains a pension and its asset value remains intact (which it does because a loan is an asset of the pension) and that you can restructure your pension in this way at any age so long as you are no longer making contributions to that pension.
OK, that’s it. If you have any questions the please call or email me.
Gary Barlow was allowed to keep his OBE after being caught using a tax avoidance scheme
HMRC is reported to have collected a billion quid in APN tax demanded (Accelerated Payment Notice) in the past year. A figure of £2 billion is also reported in other Google searches according to other reports.
We are talking about over 1,000 different types of tax – er – “planning” schemes flogged by accountants and tax advisers. If the gentle reader wants to be picky, the actual number is 1,181. Should the gentle reader still want to be picky, tax planning is another term for tax avoidance. Which is legal – as opposed to evasion which is illegal – but HMRC still doesn’t like it.
When HMRC issues an APN (aka “demand”) the tax must be paid within 90 days without appeal. Challenges and appeals don’t have much effect and HMRC loves APNs because it allows them to collect the tax and ask questions later (or possibly never). APN recipients can get tax demands for crippling amounts and even face bankruptcy.
So how would a person know whether an avoidance scheme was likely to result in an APN tax demand? Most people rely on their accountant to advise them. If an accountant says “here’s a legal way to pay less tax – it will work, trust me I’m an accountant”, the client usually jumps at the opportunity. After all, what could possibly go wrong if one’s own accountant suggests it? The answer is, sadly, everything. Because at the end of the day, if HMRC decides to issue an APN, it is not the accountant who gets clobbered for the tax, it is the client.
How would the client know if his accountant was giving him wrong advice? He could try checking the HMRC website – but all he would get is a bewildering list of numbers rather than the names or descriptions of the avoidance schemes themselves. Sometimes the accountant isn’t even using a named scheme but rather relying on his own experience and expertise to use a strategy he thinks/believes/considers/hopes will work for his client without risk of challenge by HMRC.
So why am I going on about tax avoidance schemes? What has this got to with pension and investment scams? The answer is EVERYTHING. HMRC’s £1 billion (or £2 billion – take your pick) tax take from APNs – at the rate of 3,000 a month – is designed to plug loopholes exploited by taxpayers and their advisers. The “everything” bit is in the word “approved” – which is what the advisers tell their clients the tax avoidance scheme is. Tax avoidance schemes can be registered by HMRC. But that doesn’t make them safe or approved as they can be added to the naughty list at any time without either warning or explanation.
Similarly, many financial advisers (or chiringuitos masquerading as financial advisers) tell their clients that a pension scheme – such as an occupational scheme or a QROPS (or a ROPS, or an OPS, or a PS, or an S) – is HMRC “approved”. Of course, there is no such thing. Just because HMRC registers a scheme doesn’t mean it is safe and not a scam registered by a known serial scammer. In fact, all the big, high-viz pension scams were HMRC registered. It is, indeed, a curious thing that HMRC never thinks to ask any questions about the validity of a scheme – but then they are probably far too busy issuing APNs to do so.
Celebrities are particularly at risk of being sold high-risk – and ultimately highly expensive – tax avoidance schemes:
Michael Caine, George Michael, Anne Robinson and Gary Barlow among 1,600 people who contributed £1.2 billion to the Liberty tax avoidance scheme: artificial losses created to reduce tax liabilities
David Beckham, Wayne Rooney and Andrew Lloyd Webber among a group of people stung with a £520 million tax bill after investing in blockbuster films such as Life of Pi and The Girl with the Pearl Earring
Gary Barlow (again) in the Icebreaker scheme involving intellectual property rights set up to make tax-deductible losses
Chris Moyles and 450 other celebrities in the Working Wheels scheme – a car dealership which cranked up huge losses so the investors could claim tax against them
Sven Goran Erickson and Alex Ferguson in the Eclipse 35 scheme
Jimmy Carr among 1,100 participants in the K2 offshore loans scam run by Roy Lyness of Peak Performance
The term “offshore loans” will, of course, ring some very unpleasant bells for victims of pension scams such as Capita Oak who started receiving their tax demands in March 2017. The pension scheme was 100% invested in Store First store pods and the victims received “loans” (you know – the sort you never have to repay, nudge/wink) from Seychelles-based loan company: Thurlstone.
So, what a murky old World! Seems accountants and tax advisers can be just as bad as the rogue cohort of the financial and pension advice industry. Meanwhile, HMRC continues to crank the tax-take machine while the victims face financial ruin.
In the Capita Oak pension scam, the “Ginger Scammer” – XXXX XXXX – is reported to have earned over £200k in transfer/administration fees alone. It is not known how much he earned in investment introduction commissions.
The Ginger Scammer can afford to stump up some cash for the benefit of the victims of the Capita Oak and Henley Retirement Benefit Scams. Over a thousand victims are facing the partial or total loss of their pensions and are also now being pursued by HMRC for tax liabilities on the Thurlstone liberation “loans” operated by XXXX XXXX
Here is the email sent to the lawyers acting for XXXX:
Dear Dick
I am setting out below the redacted tax appeal in respect of “Mr. X”. He had the largest transfer in Capita Oak – and by definition the largest Thurlstone loan (operated by XXXX XXXX and Tom Biggar) and resulting tax demand.
£128 million worth of pensions investments is an awfully big number and I am sure that after all the money your client earned out of these scams, he can come up with sufficient funds to place in a secure account for the benefit of the victims who are now being pursued by HMRC for tax on the Thurlstone “loans”. Although it is a matter of public record that XXXX earned well in excess of £200k in transfer fees in Capita Oak alone, it is inevitable that he will also have received some introduction commissions.
The Thurlstone loans were operated by XXXX XXXX and therefore he must take responsibility for the tax liabilities on behalf of the victims. Can you please both get back to me by return. Ignoring this situation and turning your back on the Capita Oak victims is not an option.
HMRC Specialist Personal Pension Schemes Services – Attn Lynn Faulkner 11 April 2017
Fitz Roy House
Castle Meadow Road
Nottingham NG2 1BD,
United Kingdom
Dear Ms Faulkner
Ref: Mr. X: UTR: 9227156060 – Amount of Assessment: £31,473.89
Please accept this as the appeal and request for postponement of the tax sought by HMRC on behalf of the above-named taxpayer in respect of the protected assessment issued. The grounds are as follows:
1. Capita Oak was registered by HMRC on 23.7.2012 (PSTR 00785484RM) by Stephen Ward of Premier Pension Transfers of 31 Memorial Road, Worsley and Premier Pension Solutions of Moraira, Spain.
2. Capita Oak was also registered by the Pensions Regulator (PSR12006487) who had placed Ward’s Ark schemes in the hands of Dalriada Trustees – yet allowed him to register a further scheme with no regard to the risk that it might be a scam (as indeed it was).
4. This taxpayer – along with 300 other victims – was given the Thurlstone loan on the basis it was definitely not taxable by an individual who purported to be a financial adviser. Had the victim known this would be treated as an unauthorised payment, he would not have gone ahead with the transfer.
5. The Thurlstone loans were processed by two CII members practising as financial and tax advisors. They would have known there was a risk the loans would constitute unauthorised payments and result in tax assessments by HMRC.
6. Once the transfer request had been signed by the victim, there was nothing further he could have done to influence any further transactions since these would have been outside of his control. The trustees, Imperial, and the Thurlstone loan company were by now in total control of the transfer, investment and loan. The victim had zero input or influence over what happened subsequent to the transfer being executed by the negligent ceding providers.
7. There appears to be no evidence whatsoever that Capita Oak was set up for the purpose of providing an income in retirement for the members. It must be questioned, therefore, whether it even constituted a pension scheme at all – save for the valid HMRC and tPR registration numbers. As supported by the Insolvency Service’s witness statement, the following are compelling reasons why this was a bogus pension scheme from start to finish:
· The trust deed was forged
· The sponsoring employer – R. P. Medplant Ltd was stated to be in Cyprus
· The sponsoring employer – R. P. Medplant Ltd did not exist – although there was a company registered in Cyprus called R. P. Med Plant Ltd (which was also used for the subsequent Westminster scam).
· The scheme was set up purely as the “super fund” of a bunch of known, serial scammers, to earn investment introduction commissions of 46% out of Store First’s store pods
· The scheme’s own bank – Barclays – didn’t know it was a pension scheme – and when Barclays eventually realised this, they blocked the account
· No arrangements were ever made to communicate with the members. Once the various scammers in their respective roles had earned their fees and commissions, they all simply walked away and abandoned the scheme and the members
· The transfer administration was carried out by Stephen Ward, Level 6 qualified CII and author of the Tolleys Pensions Taxation Manual. After the disasters of both Ark and Evergreen, Ward would have known he was condemning all the victims – whether transferring from personal or occupational pensions – to certain financial ruin and potential unauthorised payment charges
· The unauthorised payment charges arose from the Thurlstone loans and the tax should, therefore, be sought direct from the extremely wealthy scammers – not from the victims of the large-scale Capita Oak scam.
Angela Brooks – Chairman, Pension Life Group Action
THE PENSION LIFE 
HMRC are now sending out the tax demands (protected assessments) to victims of the Axiom UPT Pension Loan Scam. And we are busy appealing them.
He could try checking the HMRC website – but all he would get is a bewildering list of numbers rather than the names or descriptions of the avoidance schemes themselves. Sometimes the accountant isn’t even using a named scheme but rather relying on his own experience and expertise to use a strategy he thinks/believes/considers/hopes will work for his client without risk of challenge by HMRC.
In the