Tag: Pension Scams

Pension liberation scammers of Successful Pensions JAILED

Two pension liberation scammers have been sentenced to time behind bars AND a recovery of funds after creating an elaborate pension liberation scam, involving around 23 victims and nearly 1 million pounds of pension funds. Successful Pensions sure was unsuccessful for all involved.

Anthony Locke, 33, from Christchurch in the UK, was sentenced to a five-year jail term, after being found guilty of 23 counts of fraud by false representation and three counts of money laundering.

Ray King, 54, who was employed by Lock, was also found guilty at the trial of 14 counts of fraud by false representation and given a three-year jail sentence.

FT Adviser reported:

“According to investigating officer Paul Sullivan, of Dorset Police, between September 2013 and April 2014 Mr Locke obtained almost £1m from various pension companies, which represented the ‘pension pots’ of the victims in this case”.

A timetable was set out for Proceeds of Crime Act proceedings in relation to the recovery of funds from the defendants.

Successful Pensions, Lock’s company, allegedly created an ‘elaborate façade’ comprising of hundreds of documents to convince genuine companies, including Friends Life and Virgin Money, that they were operating a genuine occupational pension scheme.

Successful Pensions, set up a website to attract people who were interested in pension liberation. The victims were given a 50% cash payout on their funds’ total worth, with the other half to be re-invested – reportedly in eco-friendly investment schemes.

Unfortunately, there were no investments. Rather than cream large commissions by reinvesting the funds into high-risk toxic assets (which most scammers do), they instead laundered the money into offshore accounts including Lock’s Mum’s account and his ex-partner’s!

The scammers then went on to live the life of Riley with the victims’ money. They treated themselves to an Aston Martin Vantage, Porsche 911 and Mercedes B180, along with lots of other luxury items and nice holidays.

Paul Sullivan also stated:

“Not only have the victims lost half their pensions but now may face financial penalties from HMRC (Her Majesty’s Revenue and Customs) who will want to recover the lost tax (on the pension liberation).

The sentences imposed send out a clear message to fraudsters who perpetrate these types of offences.”

This is indeed positive news. But the message it sends out isn’t good enough. These fraudsters were clearly not very bright and made no attempt at smoke and mirrors. They scammed 23 people out of nearly £1 million. What about those in other schemes that scammed hundreds and sometimes even thousands of victims out of many £ millions? And did so repeatedly.

To my mind, the message sent out is that only the stupid scammers who don’t aim high get caught and punished. The more clever and cunning ones get away unscathed time and time again. And are left free and unfettered to enjoy their expensive lifestyles at the expense of their victims.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme, get all the information in writing and get a third party to check the details.

If you have been the victim of a scam hear how Pension Life member Jessica M.J. who lost two thirds of her pension to Continental Wealth Management, talks about dealing with stress.

May 1, 2018
Maltese QROPS regulations to change
Malta has announced changes to the way their QROPS funds will be regulated. The changes will come into effect from 2^nd July 2018, meaning that clients introduced by an adviser regulated only for insurance business will not be accepted as an investment adviser.

A letter this week from STM Malta reads:

“We are writing to inform you of some changes to Malta regulations which we believe will have a significant impact on the way that you conduct your pensions business in Malta. Whilst the final guidelines have yet to be published, it is anticipated that the changes will be brought into effect from 2^nd July 2018. With these changes in mind, we felt it is a good idea that we commence discussions regarding how this will impact on some of our processes going forward.

In particular, the changes will require:
- An expectation of further oversight from pension trustees in relation to investment selections by members as recommended by advisers;
- A mandated restriction on investment in structured notes to 30% of a member’s portfolio with a maximum of 20% per issuer;
- A restriction on those permitted to give advice in relation to investment selection to advisers authorised to give investment advice via MIFID or equivalent regime. For clarity and from discussions with the regulator, we understand that a licence to advise on insurance products will not be considered an equivalent regime; and
- A requirement that Pension Trustees obtain and maintain information about the fitness and propriety of investment advisers selected by clients.
From the consultation process, we understand that the Regulator has experienced a number of complaints in relation to pensions and these changes are intended to address these issues.”

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Whilst this is an enormous step in the right direction for Malta, they are not the only country offering QROPS and therefore here at Pension Life we are calling for these regulations to be applied worldwide.

The lists here show that there are 28 other countries offering QROPS schemes. I can’t help but feel that unregulated (for investments) advisory firms will just change countries and continue to offer unregulated investment advice to innocent victims – but using QROPS in other jurisdictions.

Furthermore the decision has been made and announced, but will not come into place until 2nd July. That is nine weeks away. That’s 45 working days, 63 if they work weekends, that the unregulated advisers have to slog their guts out and get as many new “clients” to transfer their hard-earned funds – and invest them into unregulated, high risk, toxic investments. This may be the last opportunity to earn huge commissions in Malta. Then I guess these firms can have a wee holiday until they decide how best to alter the way they work.

STM’s letter goes on to state:

“Going forward we will need to fill the advice gap that is created and it occurs to us that there are two possible options for advisers going forward:

a) The adviser upgrades the license to become a regulated Investment Adviser; or

b) The investment is selected through a Discretionary Fund Manager which is a regulated Investment Manager”

What worries me is that the advisers with only an insurance license will be able to go on to become regulated, “upgraded” as the letter states, to fill the gap, so the process may be made easier for them.
- In response to the four changes reported by STM, I can see no mention of their past failures on a grand scale to carry out even the most basic due diligence on advisers or investments. STM has said nothing about the disastrous consequences of its own negligence – particularly in the case of the Trafalgar Multi Asset Fund;
- A restriction on investment in structured notes to 30% of a member’s portfolio with a maximum of 20% per issuer is still way too high – about 30% too high (and what about UCIS funds?);
- Restrictions on those permitted to give investment advice will need to be firmly policed. Firms with only an insurance license will inevitably try to continue as before. How will this be reported? And what action will be taken if trustees continue to accept dealing instructions from firms with no investment license? (A slap on the wrist with a soggy kipper?); and
- How will Pension Trustees decide whether investment advisers are fit and proper? One man’s fit and proper could be another man’s dodgy dealer.
One Pension Trustee in Malta told me recently that a grave concern of the industry is that firms who abide by the letter of the changes will lose out to firms that ignore them. This will set up an unequal competitive edge for those who interpret the new regulations more “loosely”. So, to make sure this new regime doesn’t end up as a bag of chocolate balls, the Maltese regulator has got to keep on his toes.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate regulated scheme. Get all the information in writing and get a third party to double check the details.

FOLLOW PENSION LIFE ON TWITTER TO KEEP UP WITH ALL THINGS PENSION RELATED, GOOD AND BAD.
May 1, 2018
Celtic Wealth Management BRIBED British Steelworkers

Just a few weeks ago we reported on Mike Pickett, the first British Steelworker – SIPPS pension scam victim. But now there is more shocking news on Celtic Wealth Management – the culprits behind this toxic transfer which found victims’ pension funds put in danger in February of this year.

It would seem Celtic “advisers” were so desperate to nab victims that they bribed them with sporting event tickets.

New Model Adviser revealed one victim showed them a text message that Celtic Wealth had sent him:

The text, which appears to be sent from Celtic Wealth representative Liam Powell and is dated 7 November 2017, states: ‘Hope you’re keeping well, wondering if you would like 2 complimentary tickets for Ospreys home match this Friday evening. If you’d be kind enough to let me know that would be great. Regards Liam Celtic.’

The victim then informed them that other colleagues had been offered tickets to see football team Swansea City play in the Premier League.

I guess Celtic Wealth was aiming at covering both sporting sides to ensure they had a wider range of victims to bribe. This tactic may also have distracted victims from the fact that they were an unregulated company meaning they were not authorised to provide investment advice to anyone – ever. Even with free sporting tickets!

Active Wealth, which WAS an authorised company, was also involved in this SIPPS scandal with Celtic Wealth Management. Celtic acted as “introducers” and gave talks to the British Steelworkers – and the bribes – which I’m also informed included plates of sausage and chips. Active Wealth, an authorised firm, completed the pension transfers.

Active Wealth has now surrendered it’s pension transfer permissions following FCA action in relation to the advice given to these steelworkers.

Malta has just announced that they will be changing their regulations surrounding pension advisers, stating that NO unauthorised advisory firms will be able to introduce investors to regulated trustee firms. Isn’t it a shame that this is all a little too late for the victims of unregulated introducers. Furthermore, this only applies to Malta – for the time being. The British regulator would do well to bring in similar rules – as well as 28 further countries on HMRC’s QROPS list. Firmer regulation like this would stop unregulated firms like Celtic Wealth Management from up-selling toxic pension advice.

We will be waiting in the stands, wringing our hands anxiously, waiting for any more fall out from the British Steel case. British Steelworkers were, sadly, sitting ducks for these unregulated foxes like Celtic Wealth.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme, get all the information in writing and get a third party to check the details.

If you have been the victim of a scam hear how Pension Life member Jessica M.J. who lost two thirds of her pension to Continental Wealth Management, talks about dealing with stress.

FOLLOW PENSION LIFE ON TWITTER TO KEEP UP WITH ALL THINGS PENSION RELATED, GOOD AND BAD.

April 30, 2018
OMI AND IOM DEFEATED BY SPANISH COURT

One small stumble for the Isle of Man – one giant leap for victims of OMI and CWM.

We never thought the litigation against the scourge of financial services – the insurance giant Old Mutual International – was going to be easy. And we knew these negligent and greedy firms would try every trick in the book to get off the hook for betraying so many innocent victims.

In the case of a claim by two victims of Abbey Financial Solutions (based in Spain) and OMI, represented by Antonio Flores of Lawbird, OMI tried to contest the established jurisdiction of Spain on the basis that it should be the Isle of Man. A judge in the IoM ruled that jurisdiction should indeed be IoM (I’m in danger of getting my acronyms muddled up if I don’t concentrate hard while writing this). This judge also threatened the claimants and Antonio Flores with prison if they tried to bring the case in any other jurisdiction other than IoM.

However, undeterred and not prepared to bow to bullying by either the IoM court or the giant insurance scammer OMI, Antonio Flores went ahead and referred the jurisdiction matter to a Spanish court. And now jurisdiction is established, by an EU State (which IoM is not), that jurisdiction should be Spain.

This is a major victory not only for the two claimants who were victims of financial loss at the hands of Abbey Financial Solutions and OMI, but also for Lawbird – as a firm which is prepared to stand up for justice and decency. This also signals an important precedent for the hundreds of victims of Continental Wealth Management (CWM) who have, between them, lost many £ millions of their retirement savings.

This legal precedent will also work for the other two insurance giants who were equally culpable: SEB and Generali. And also means that the CWM victims now have an even greater chance of success.

OMI might, of course, appeal this decision and throw more money from their deep pockets at trying to wriggle out of their clear and indisputable negligence and culpability. And I would not be surprised if they did so. The reason they are so desperate to get these proceedings out of Spain is that the Spanish Supreme Court has ruled that life assurance policies should not be used to hold investments. The reason given by the court was that this practice goes against the actuarial nature of insurance. However, natural justice will also support the fact that these life assurance policies – or wrappers – have for many years routinely been used and abused by scammers across the globe to give unlicensed investment advice, sell unsuitable investments and earn huge commissions.

If OMI does try to appeal against the Spanish court’s ruling that jurisdiction should be Spain, there will obviously be a public outcry. OMI has already acknowledged publicly that the CWM scam was exacerbated by the Leonteq structured note scam.

OMI cannot now try to cherry pick which bits of the scam should be brought to justice and which should be let off. OMI was in it with Leonteq – and idly sat by as the Leonteq notes failed and victims lost anything up to 100% of their funds due to the very high-risk nature of these toxic derivative investment products (which, in reality amount to nothing more than gambling).

The World will now be watching OMI’s every move. I doubt that either the public, the regulators or the industry will tolerate any hypocrisy on the part of OMI. Further, I doubt that the IoM’s reputation as a global financial centre will ever recover from this astonishing and indefensible conduct. The IoM is already ranked 57 in the World (well over halfway down) as a “safe” financial jurisdiction – after Mauritius, Monaco and Bahrain (and only just ahead of the Bahamas and the British Virgin Islands). But now, I reckon it will continue its inexorable downward trend and end up at the bottom of the charts below Almaty, Baku and Dalian.

Or maybe it will disappear altogether – and some good Samaritan will tow it out into the Atlantic for hosting and harbouring so many scams and scammers in recent years.

The details of the case are set out below – translated from the original court rulings in Spanish.

REPORT AND BACKGROUND TO THE APPEAL BY OMI TO HAVE JURISDICTION ESTABLISHED AS IoM (comments in brackets are mine)

A judge threatens to imprison an expatriate couple who are suing on the Costa del Sol to recover a failed investment (with Abbey Financial Solutions and Old Mutual International). The threat may extend to associated lawyers and court personnel

The Isle of Man is a small offshore territory between Ireland and England (and with which, now, neither will want to be associated). It does not belong to the EU (phew), but it does belong to the United Kingdom (not for long, hopefully), which provides it with a defense and foreign policy (but no guidance on avoiding scams and scammers). Despite having only 75,000 inhabitants, it has shown pride (in hosting so many financial scammers?).

One IoM judge has threatened a group of British pensioners who are suing in Marbella against one of its companies, Old Mutual Isle of Man, which they accuse of cheating them out of a complex financial product – (yet another one) – sold to British pensioners on the Costa del Sol. According to the judge, if the claimants continue to move forward in Spain, they face prison terms or the seizure of their property in the UK, as do their lawyers, “helpers” and even court staff.

The Costa del Sol is a British scam paradise. Tens of thousands of expatriates live in this “bubble”, without knowing the Spanish language or laws, and often trust their compatriots and their financial products (fearing that Spanish advisers might, somehow, “mislead them” because of the language barrier?). Some have suffered the rigours of the Spanish picket fence, others took out reverse mortgages with Rothschild who ended up in court and others left their savings in the hands of Naughty Nigel, a rogue poker player who claimed to invest in the stock market. There are countless examples.

Others invested in Old Mutual, Isle of Man, (now known as “Quilter” an insurance company that sold them a complex financial product from IoM, an offshore territory with thousands of advisory companies (selling the company’s pointless insurance bonds). When the investments went wrong, they turned to the Spanish courts, which have condemned rogue banks and financial scammers to pay redress for the money lost.

This was done by a couple of expatriates, a journalist and a physiotherapist, based in Marbella. On July 31st 2017, they filed a lawsuit against Old Mutual for the annulment of their life insurance policy in a court of law in Marbella. Their lawyer, Juan Martínez Soler, of Lawbird in Marbella, argued that the Isle of Man is not an EU territory and that although the contract stipulated that the differences would be settled there, this clause is null and void, as are so many such abusive contracts (of insurance policies used to hold investments invalidly).

In the complaint, the two claimants argued that Old Mutual was never authorised to operate as an insurance agent in Spain despite the fact that it offered their insurance products from an office in Marbella through (unlicensed) intermediaries such as the AFS (Abbey Financial Solutions) Europe Alliance. According to the claim: ‘the information available to the public concerning the authorisation to operate in Spain is false’. The AFS Europe Alliance “advisory” firm, which marketed the insurance products, is registered as an advertising company (on the Spanish Mercantile Registry), but neither the CNMV (investment regulator in Spain) nor the Directorate General for Insurance (insurance regulator in Spain) was aware of them.

In 2011 the claimants had taken out a policy called an ‘executive investment bond’: a life policy in which, upon the death of the insureds, the beneficiaries of the insurance receive the investment plus 1%. In total, they invested £688,000 (about 780,000 euros), out of which they lost £198,000 (207,000 euros). In the lawsuit, the investors argued that it was irrelevant how Old Mutual lost the money – as that would be “like trying to establish the malpractice of a fake surgeon” – but that OMI did not have any license to operate in Spain. They claim that the contract was abusive by imposing a judge on the Isle of Man and not in Marbella (Spain) to settle disputes.

In addition, Spanish insurance law establishes that “contracts made by unregistered entities, such as Old Mutual in Spain, shall be null and void”. The Marbella courthouse admitted the claim and began the slow process of these proceedings. So far, it would be just (yet) another case of British people claiming money lost on the Costa del Sol in strange ‘offshore’ investments (there are Danish banks and Gibraltar-based companies in similar lawsuits).

Insurance law in Spain provides that ‘contracts made by unlicensed entities shall be null and void’.

But last January there was an unexpected turn of events. Old Mutual filed its own motion in an Isle of Man court to stay the proceedings in Spain. And the IoM court found in OMI’s favour (surprise surprise!). On 31 January 2018, the Isle of Man High Court issued a criminal notice warning the couple (claimants) that if they pursued their case in Spain, they could be convicted of “contempt”, and risk imprisonment, fines or having their property seized.

Not only that, but the judge warned that the same could happen to “anyone else who knows about this order and helps the plaintiffs”. Ultimately, this even applied to Spanish justice personnel. “It’s absurd, the Isle of Man threatening the Spanish court with criminal prosecution. It’s unprecedented,” explained Antonio Flores, director of Lawbird. The court in Marbella is now analysing the jurisdiction of the case.

A spokesman for Old Mutual said by email that they are not trying to dissuade anyone from the lawsuit, but that it should take place in the Isle of Man: “Old Mutual International is not trying to stop the lawsuits from going on. The trial only affects where the lawsuit should be heard, and the Isle of Man high court has ordered it to be on the Isle of Man. Any further issue arises from the continued refusal to comply with a Supreme Court order. This rejection is regrettable, but it has nothing to do with Old Mutual International.”

But then, on 23^rd April 2018, the news was announced of a Spanish Court’s contrary ruling that the jurisdiction should, indeed, be Spain:

COURT OF FIRST INSTANCE NO. 8 OF MARBELLA
5 DOHA STREET
Tlf.: 952913282-952913278. Fax: 951891378
NIG: 2906942C20170005505
Procedure: Ordinary Procedure 624/2017. Negotiated: 06
From: D/ña. XXXXXXXXXX and XXXXXXXXXX
Procurator Sr./a.JUAN CARLOS PALMA DIAZ
Counsel Mr./A.ANTONIO FLORES VILA

Against D/ña.AFS EUROPE ALLIANCE SL and OLD MUTUAL INTERNATIONAL ISLE
OF MAN LIMITED
Procurator Sr./a.DAVID SARRIA RODRIGUEZ and JOSE MANUEL ROSA SANCHEZ
Counsel Mr./A.ENRIQUE RAMON BARRERA GOMEZ and FRANCISCO MANUEL
OSOBLIWA

In MARBELLA, on April 17, 2.018
FACTUAL BACKGROUND
FIRST: For the procedural representation of the defendant entity Old Mutual International Isle of Man Limited has filed a pleading of objection to jurisdiction on the understanding that knowledge of the case is within the jurisdiction of the Tribunals of the Isle of Man.

SECOND: The objection was accepted for processing and was deferred for a period of five days – after which the plaintiff’s case was upheld and the jurisdiction of the Spanish courts was established.

LEGAL GROUNDS

FIRST: one of the defendants, AFS Europe Alliance, S.L., has its address and social security in Spain, so that Article 22b(1) of the LOPJ would apply, and which would apply to all grants of jurisdiction to the Spanish courts when the defendant is domiciled in Spain. For this reason, there being a co-defendant, the Organic Law of The Judicial Branch grants jurisdiction to the Spanish courts, and the plaintiff may choose, in the case of several co-defendants, the jurisdiction of any one of them.

With regard to the express submission invoked by the co-defendant to the courts – Isle of Man General Consumer Protection Act, Section 90.3 – the clauses that establish the express submission to judge or court were ruled as being abusive.

A copy of this ruling can be viewed online: https://ws121.juntadeandalucia.es/verifirmav2/

This document incorporates a recognized electronic signature in accordance with Law 59/2003, of 19 December, on electronic signatures.

SIGNED BY ROSA MARIA FERNANDEZ LABELLA 18/04/2018 10:03:06

SIGNED BY DIONISIO CARRILLO FUILLERAT 18/04/2018 14:11:55
The place of domicile of the claimants or the place of performance of the obligation is an
invalid clause in application of consumer law and cannot therefore be regarded as
needing to be taken into account in determining the jurisdiction of the Isle of Man courts.

There is no need to adjudicate on the application for costs as soon as the articles governing the dismissal (of OMI’s case) do not provide for a decision on costs.

RULING:

The court declares the jurisdiction of the Spanish Courts to hear the case of the present suit.
An appeal for reversal may be brought against this order.

Rosa Fernández Labella, Magistrate Judge of the Court of Justice of the Court of First Instance No. 8 in Marbella.

April 24, 2018
Holborn Assets – What a cheek!

Seems we can´t get enough of Holborn Assets’ cheek this week. CEO Bob Parker has sent out a Q1 2018 newsletter and included on his mailing list a very unsatisfied and traumatised client who, through Holborn Assets’ negligence, has suffered a significant loss to her pension fund, with no compensation – or even apology.

Glynis Broadfoot was a victim of Holborn Assets’ rotten advice and service in 2011 and which resulted in her losing a significant portion of what had originally been a final-salary pension which should never have been transferred in the first place. Holborn Assets refused to help her, and simply kept taking their extortionate fees from her ever-shrinking pension pot. They had invested her in high-risk, professional-investor-only structured notes which were totally inappropriate for a low-risk investor.

You can imagine Mrs. Broadfoot’s fury and disgust when this message popped up in her inbox.

In summary, despite the expensive advice given to Mrs. Broadfoot by Holborn Assets, and assurances that her pension would grow at 8% per annum, she ended up losing nearly a third of her fund. Despite the fund’s losses, Holborn Assets continued to apply their fees to the fund, totaling somewhere in the region of £11k!

Holborn Assets informed her, at the height of her distress over her losses, that they “had closed the case, and would not enter into any further correspondence”. Yet now, several years on, it appears she’s still on their mailing list – despite knowing full well they have left this victim’s retirement prospects in tatters.

Mrs. Broadfoot’s case was typical of “fractional scams“: expensive and unnecessary insurance bond (only purpose was to pay a fat commission to the scammers); expensive, high-risk, professional-investor-only structured notes (again, high commissions for the scammers and heavy losses for the victim); hefty advisor fees. This was a very obvious scam which caused great suffering for the victim who is resident in Spain – but Holborn Assets was not licensed to provide investment advice in Spain.

In the years since Mrs. Broadfoot was scammed, Bob Parker did start to engage half-heartedly with a process of negotiating compensation for her losses. But so far she has not received one penny. Her local government final salary pension scheme – which she was conned into sacrificing by these unlicensed scammers – would have provided her with a guaranteed, index-linked pension for life and she could have retired comfortably. Instead, she has a seriously damaged fund which is unlikely to ever recover and provide her with the retirement income she needed and deserved.

So, far from getting the “best level of service and advice available” as boasted by Bob Parker, Mrs. Broadfoot was conned, scammed, fleeced and then dumped by Holborn Assets.

Which brings me on to the Trust Pilot reviews. Only 2% scored Holborn Assets as average or poor. Which is very surprising – given the number of people who report similar stories to Mrs. Broadfoot’s. But I think it is likely that those who gave four or five stars, haven’t yet found out what their losses are. In fact, some of these reviewers admit they were cold called by Holborn Assets. We know for sure Claudia Shaw was flogging the high-risk Premier New Earth Recycling UCIS fund to her victims and that there have been heavy investment losses.

One person who has given Holborn Assets a “poor” rating on Trust Pilot is a Mr. Norton who writes:

Not very impressed

I don’t believe anyone from Holborn has contacted me since September last year. In August 2016 I was contacted and advised to switch my policy which seemed ridiculous considering the additional charges I would incur, the fact it was even suggested causes me concern.

Then in September 2016, I was contacted to recommend my wealth manager for an award, again the audacity of this makes me wonder.

I have no idea on what your investment performance to date is over the past 12 months and I have not been given any confidence how my investments will be managed going forward now that I have finished paying your fees and I actually begin to get money invested.

I do plan to visit within the next month and hopefully by that stage you in a position to assure me I did not make a big mistake investing my money with you.
Regards
Ian Norton

Another victim has complained directly to Pension Life about the appalling treatment he has had at the hands of Holborn Assets:

“Since 2013, the fund has not done anything at all. The fees are much too high, excessive transactions have been made to earn themselves money on my account and the investments went down in value. There is no communication with Holborn Assets and they are unwilling to discuss this matter with me or to do anything about it.”

So, as the cheeky Bob Parker is aiming to infiltrate South Africa with his new weapon – the bright-eyed and bushy-chinned Lourens Reichert – I thought now would be a good time to make friends with Reichert and see if he can put some pressure on Uncle Bob. Reichert will, no doubt, be very pleased to help me sort these victims out – as he has a big bulging lump in his trousers courtesy of Bob’s golden handshake.

I might even nip down to Johannesburg and have a cup of tea and a cheeky biscuit with him. No doubt, he won’t want the sordid details of Holborn Assets’ scams to compromise his quest to conquer South Africa. If the natives find out just what his colleagues have been up to, he might find himself on the wrong end of a Zulu spear.

April 19, 2018
Fractional scamming – The trending pension scam

Having read Henry Tapper’s A Master Class in Fractional Scamming, here at Pension Life we feel we should share some facts with our readers about the “trending” investment and pension scam of 2018 – fractional scamming.

First of all here´s a bit about the fractional scam:

Today with new regulations, pension liberation has pretty much gone out of the window. Instead, victims are being offered to transfer their pension fund into a “new” scheme and invest in funds with promises of high returns and low risks. What is hidden in the small print is that whilst there MIGHT be high returns (possibly, if the wind is blowing in the right direction for long enough), the fund has to work its way through the hands of many parasitic introducers and advisers – each one taking their own fraction of the fund.

Henry Tapper uses a Pizza as a great example. Say you ordered a pizza which has been cut into eight slices. On its way to you, the pizza goes past 6 people, and each one takes a slice. Therefore 3/4 of the pizza has already been eaten by the time it gets to you. That does not leave much for you, the person whose pizza it was supposed to be.

This is what is happening to pension funds subjected to fractional scamming, they are being passed from one adviser to another and each one takes their slice.

So whilst the pension fund may well be going into a high-return investment, (when they finally arrive there), the fund has to recover from the percentage slices taken before any profit can be made. Using the pizza as an example, 75% of it was eaten before it arrived at its promised destination. 75% is a pretty high figure – even if the investment interest is 6.5%/7.5% – it is going to take another lifetime to get it back to its original value. Something the victims of fractional scamming don´t have.

The trending pension scam, fractional scamming – this image shows how the scammers skim their slice of the victims’ pension fund in this new wave of pension scam. Chip, chip, chipping away until the original pot is but a fragment of its original state.

What is most frustrating about the situation is that many of the people benefiting from the fractional scam are unregulated advisers. They are the unauthorised introducers who work with unauthorised – as well as authorised – IFAS who worked with Pension Trustees to transfer money into overseas funds. Each one taking their fraction of the fund.

$Pension Life blog - Fractional Scamming - The trending pension scam - don´t let your pension pot fall victim to fractional scamming$

Ways to avoid falling victim to fractional scamming are to ensure that the adviser you are proposing to use is fully authorised by the FCA in the UK. Or by the appropriate regulator in whichever jurisdiction you are resident. Do your own due diligence to ensure that you know all the facts about the transfer of your pension fund. What are the fees – as in ALL THE FEES – relating to the transfer; where will the fund be going and what exactly will it be invested in.

If you are cold called – HANG UP IMMEDIATELY

Do the adviser’s promises sound too good to be true? IF THEY DO, THEY PROBABLY ARE

High return/low risk investment – NO SUCH THING

The illustration on the left is based on the Continental Wealth Management scam which saw nearly 1,000 people have around £100 million worth of retirement savings put at risk. The first year would have cost the victim at least 16% of the fund, and thereafter around 8% a year. So it never had any chance of growing – while the “advisers”, bond provider and structured note providers got fat and rich.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

FOLLOW PENSION LIFE ON TWITTER TO KEEP UP WITH ALL THINGS PENSION RELATED, GOOD AND BAD.

April 19, 2018
Holborn Assets Johannesburg – Damaging more life savings?

EXCLUSIVE: Holborn Assets opens new office in South Africa. Oh, how wonderful for them! However, not so wonderful for the new victims Holborn will obviously be trying to scam into losing large percentages of their pension funds.

None of the existing victims have received compensation yet for their crippling losses due to expensive insurance bonds, high-risk, professional-investor-only structured notes, and even higher-risk UCIS funds such as New Earth Recycling. And yet Holborn Assets appear to have plenty of spare cash to open a new office in Johannesburg. This new venture will be led by Lourens Reichert and will apparently employ an eight-strong team of advisers. Seems Holborn Assets is now set to exploit this new market and will, of course, have no trouble finding plenty of new victims and relieving them of their pension savings.

Bob Parker, Holborn Assets’ CEO and founder, said: “South Africa is full of potential. There’s an enormous amount of capital held by residents outside of the country and Lourens and his team are experts in advising clients on how to manage that for maximum growth and efficiency.”

You can almost hear Bob Parker smacking his lips and rubbing his hands with glee as he is already counting the enormous amount of money he is going to make out of scamming more victims.

If you are new to Holborn Assets here is a bit of background information on them. The outfit is based in various locations including Dubai, Saudi and Kuala Lumpur, as well as the UK and run by various Parkers: Simon, Bob, James etc. They have used mass cold-calling techniques to lure in victims and place their pension funds into high-risk, toxic investments – that pay maximum commissions.

Holborn Assets’ past victims have seen heavy losses to their pensions due to negligent, unregulated, unqualified advice into entirely inappropriate, high-risk, illiquid assets. This includes one victim’s $600k life savings – half of which were invested in New Earth Recycling (which, of course, was paying the best investment introduction commissions at the time).

Not only is Holborn Assets in the habit of destroying pension funds, the firm also has no shame in who they stick on their payroll. Take Paul Reynolds, who was banned by the FCA and fined nearly £300,000 for giving unsuitable and misleading financial advice, yet Bob Parker of Holborn Assets Dubai welcomed him with open arms. Holborn Assets also employed Darin Brownlee-Jones: the “Champagne Killer“. A drunk hit-and-run driver who killed an innocent man then walked away to drink champagne.

Bob Parker is clearly a man whose conscience bothers him not one bit after failing to compensate victims. He has the astonishing audacity to have his own page on his website to warn people about scammers!

And now Holborn Assets has employed Lourens Reichert, to be the face of Holborn Assets Johannesburg. Reichert has reportedly said “Holborn has a great reputation for its integrity, professionalism and for supporting its staff and investing in them and the business. It is also going in a really exciting direction and it’s great to join the company when it is on such a growth track.”

He obviously hasn’t done much research on the company he now works for and represents. Or did the whopping “golden handshake” he received from Bob Parker make him turn a blind eye to the grubby goings on inside Holborn Assets?

Reichert has apparently stated:

“Coming to Holborn gives my team and I the opportunity to grow the business even further. The first priority will be within South Africa and then we will explore the many opportunities that exist for providing specialist advice across the African continent.”

But Reichert has said nothing of repairing the damage done to so many victims and Holborn Assets’ failure to compensate them. Is Reichert really so blind? Or is he just greedy, selfish and heartless – willing to go on and do to more victims what Holborn Assets has already done to so many?

All that’s left to say then is “Look out South Africa!” If any South African residents get cold called by Reichert and his merry men, just tell them to hop it.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

FOLLOW PENSION LIFE ON TWITTER TO KEEP UP WITH ALL THINGS PENSION RELATED, GOOD AND BAD.

April 18, 2018
Victory for SIPPS Pension Scam Victims

A happy tale for the end of the week… not just one but two firms have been told they must compensate clients for poor advice on SIPPS transfers. A great victory against all firms using SIPPS to disguise their ill-advised pension scams sorry schemes.

Financial Planning today reported that:

The Financial Ombudsman Service has ruled against Portafina and Greystone Financial Services in two recent separate cases.

In both instances the clients were advised to invest in unregulated collective investment schemes (UCIS). These schemes are generally high risk and unsuitable for retail investments such as pension fund SIPPS. Both victims have suffered severe financial loss due to the UCIS their funds were invested in.

Mr P invested sums from his SIPP of £50,000 and two more of £20,000 into various funds before 2007 on the advice of Greystone. In May 2007 Greystone advised Mr P to invest £25,000 of his SIPP funds in the Rock Industrial UK Property fund and to also invest £25,000 in the Phoenix Spree Deutschland fund.

Mr P at 51 should have been a low risk investor, however he was encouraged to invest a high percentage of his SIPPS into the commercial property market. Greystone argued that the loss was not caused by the advice but by the unprecedented fall in the commercial property market.

The FOS told the firm it must put Mr P into the position he would probably now be in – or as closely as possible – if he had been given suitable advice.

With this case and many others now coming to prosecution, there is hope that there will be a reduction in firms advising their clients to invest in unregulated high-risk investments. In this case there is no mention of the ´fees´the firms applied to the investments they made, however it is safe to assume they would have applied a nice percentage to each investment, ensuring their pockets were well lined whilst the victim´s funds end with severe losses.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

FOLLOW PENSION LIFE ON TWITTER TO KEEP UP WITH ALL THINGS PENSION RELATED, GOOD AND BAD.

April 13, 2018
OMI SUES LEONTEQ over undisclosed commissions

A fine journalist at International Investment reports that Old Mutual International is taking legal action against Leonteq. She reports that this action is being taken on the basis that Leonteq lied about commissions paid to advisers for using high-risk structured notes.

This news is, of course, very welcome news – especially if it succeeds in securing redress for the “significant financial losses” for the Continental Wealth Management victims. OMI has stated:

“Had the true level of commission been disclosed, the high-risk structured notes would not have passed Old Mutual International’s (OMI) criteria, and no investments would have been made”.

OMI has mentioned the “true level of commission”. What it is referring to is the fact that for some particularly toxic notes, the commission paid to the scammers was 8% instead of 6%. The victims ultimately pay this commission – which is always hidden from them – but in reality the difference between 8% and 6% pales into insignificance when compared to the actual losses themselves.

Leonteq’s high-risk structured notes had been failing and causing crippling losses for years. Just as RBC’s, Commerzbank’s and Nomura’s had also done. One victim saw his £38,000 pension pot dwindle down to £800 since 2015.

The truth of the matter is the none of the victims should have had any of their retirement savings invested in high-risk structured notes which clearly state on the term sheets:

FOR PROFESSIONAL INVESTORS ONLY

Continental Wealth Management – an unlicensed firm of scammers – bought more and more structured notes. CWM was not licensed for either insurance or investment advice.

But this raises an important question:

Why aren’t SEB and Generali suing Leonteq?

The SEB and Generali victims suffered very similar crippling losses to OMI’s. What are they doing about this fiasco? What would their “criteria” have done to intervene had they realised Leonteq was paying the scammers 8% instead of 6%?

Apparently, Leonteq is now disclosing commissions on the term sheets for their products. Great. Problem is that the victims never get to see the term sheets – or at least not until it is way too late and they have lost half of their life savings. Having had access to a Leonteq termsheet which clearly states:

This Product may only be sold to qualified investors (the term “qualified investor” has the meaning as defined in Section 10 of the Swiss Federal Act on Collective Investment Schemes “CISA”).

and

Given the complexity of the terms and conditions of this Product an investment is suitable only for experienced Investors who understand and are in a position to evaluate the risks associated with it.

But even if the victims had seen these warning and the fact that they were paying 6% or 8% – on high-risk structured notes – to have their fund systematically destroyed, what could these people have done about it? Because, at the end of the day, the client is not the client (apparently). The client is the life office. OMI, SEB and Generali are the legal owners of these dodgy structured notes. Or perhaps the trustee is the legal owner? Depends on who you ask and why – the answer is always different.

Fortunately for OMI clients – the MD of OMI – Peter Kenny – has said the company is “taking a firm stand against the behavior which has led to such devastating consequences”.

Kenny goes on to say that OMI “will do all that we can to bring to account those responsible.” And is “encouraging all market participants to help rid the industry of inappropriate structured products, which are having a damaging impact on investor confidence and outcomes”.

The International Investment journalist ends her article with Kenny’s parting comment:

“I would encourage all industry participants to work together to eradicate poor practices once and for all.”

For some, however, the damage has already been done.

A life’s worth of savings has already been destroyed.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

FOLLOW PENSION LIFE ON TWITTER TO KEEP UP WITH ALL THINGS PENSION RELATED, GOOD AND BAD.

April 12, 2018
Alan Kentish of STM Groups delivers news of record profits for 2017
QROPS provider STM Group’s Alan Kentish, is delighted to deliver reports of record profits for 2017. I wonder how delighted the victims of his previous scam, the Trafalgar Multi Asset Fund, are to hear this. I think we’d be more delighted to hear that Kentish planned to pay all the victims of this investment fraud (currently under investigation by the Serious Fraud Office) full compensation for their losses.

The company, STM Fidecs, which has recently moved its head office to the UK from Gibraltar, says its annual profits grew last year by 43% after the introduction of a new SIPPS.

Kentish went on to say,

“Moving into 2018, we have a solid recurring revenue platform on which to look to launch new products and to expand our distribution network as part of a strategy to make our business even more robust.”

In our opinion, there is nothing robust about Kentish and his various dodgy products. And the Gibraltar regulator shares our opinion as well as our concerns. In a letter dated 6.11.2017, the GFSC wrote to the directors of STM Fidecs about their concerns following a series of onsite visits:

“COMPLIANCE: effectiveness and oversight of the company’s internal compliance functions; high turnover of staff in compliance officer and money laundering regulatory officer roles; general suitability and experience of compliance staff.

PROFESSIONAL TRUSTEE SERVICES: level and nature of due diligence when accepting new QROPS business and whether legal and regulatory obligations were being met; nature of investments e.g. the Trafalgar Multi Asset Fund linked to serious customer detriment and fraud”

The Gibraltar regulator appointed three partners of forensic investigators CVR Global LLP to inspect and investigate the affairs of STM Fidecs. The deadline for completion of this inspection is end of March 2018 and the GFSC has warned that:
- a person who wilfully makes a statement or furnishes information knowing it to be untrue;
- a person who refuses to supply information or cooperate with an inspector
is guilty of an offence and is liable on conviction to imprisonment.

I wonder if any of STM’s fat profits will be used to help balance the heavy losses made by the company’s past “mistakes”. At the height of the success of the Trafalgar Multi Asset investment scam, STM Fidecs was accepting more than £1 million a month from UK residents (none of whom should have transferred into a QROPS at all) and allowing it all to be invested in XXXX XXXX’s illegal UCIS.

I find it very hard to swallow that Kentish can continue to offer his “products” to unsuspecting future victims – given his murky past record. Kentish has stated “I look forward to updating the market on our developments during the year.” But has he updated the Trafalgar victims about the development of their lost funds being recouped? No he has not. He has just scraped his past misdemeanors under the carpet and hoped they will be forgotten.

After his arrest in October 2017, Kentish was released without charge and was fully backed by the STM board. (They are obviously a load of crooked clowns who are no better than Kentish himself). He has, also, been given the green light to further his venture into offering legal SIPPS wrappers to clients, that have the potential to contain high-risk, toxic investments. The results of which may well leave even more unsuspecting victims’ pension funds in tatters.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

Follow Pension Life on twitter to keep up with all things pension related, good and bad.
March 29, 2018
Better Protection Against QROPS Pension Scams from PLIG

Here at Pension Life, we are well aware of QROPS and SIPPs providers being a favorite of the serial pension scammers and are very pleased to report that there is positive news of better protection against this, on the horizon.

Three years ago the Pension Liberation Industry Group (PLIG) launched a code of practice to protect retail investors from serial scammers. Whilst the code of practice managed to help towards the eradication of the big occupational scams, the serial scammers altered their gameplay and continued to score. Serial scammers are focusing on using SIPPS and QROPS providers as a way to lure unsuspecting victims into toxic, high risk investments. Legal “envelopes” with corrupt contents.

Fortunately, the PLIG has finally recognised this change of tactic and has now announced that it will be updating the code of practice to reflect the new tactics of scammers, with the hope of reducing the number of pension scam victims.

Despite this welcome positive news, I still can’t shake the idea that this updated code of practice by PLIG, is possibly too little too late. The situation with James Hay springs to mind. James Hay – the UK´s largest SIPP provider – has announced losses in 2017. James Hay was also involved in the pension liberation scam with Elysian, in which around 500 clients put £55m into Elysian Bio Fuels. The business failed in 2015.

The business failed in 2015 after SIPPS – including James Hay – had already been misused to lure in pension scam victims. This is just one of many such scams (off the top of my head). Believe me, there are many, many more similar to this – that have scammed unsuspecting victims out of millions of pounds’ worth of pension funds and into crippling tax charges.

Darren Cooke, a chartered financial planner at Derbyshire-based Red Circle Financial Planning, launched a petition to the government to ban cold calling in 2017, argued that it wasn’t new that Qrops had been “a favourite” of pension scammers.

He was quoted as saying: “The new Qrops legislation that was introduced in the budget [last year] has reduced scams a bit. So, to some extent, revisions are a little behind the curve. I actually think scammers are switching back to using SIPPS and [small self-administered schemes] SSAS again.”

We welcome this new code from the PLIG, however we can’t agree more with Darren Cooke who also stated, that the FCA needs to regulate the products and not just the advisers.

“As soon as the FCA [starts] regulating the product, it would stop regulated advisers recommending unregulated products. That would stop 99 per cent of scams.”

A small step in the right direction, where a huge leap needs to be made.

Dear FCA,

If you really want to stop pension scamming in its tracks:

BAN COLD CALLING

REGULATE THE PRODUCTS

PROSECUTE THE SERIAL SCAMMERS – ALL OF THEM!

Many thanks

Pension Life

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

Follow Pension Life on twitter to keep up with all things pension related, good and bad.

March 27, 2018
SALMON ENTERPRISES TAX TRIBUNAL VERDICT

SALMON ENTERPRISES TAX TRIBUNAL VERDICT:

The Salmon Enterprises victims will have to wait until after Easter for the verdict on the Salmon Enterprises Tax Tribunal appeal. This will be a very anxious time for the victims of James Lau – currently under criminal investigation – and the directors of Tudor Capital Management currently serving eight-year jail sentences for cheating the Public Revenue and money laundering offences.

The anxiety will inevitably be shared by the Ark victims – as HMRC now want to push ahead with the Tax Tribunal appeals as well (after seven years of dithering). The Salmon Enterprises determination may well have an impact on the Ark appeal so there will be hundreds of people desperate for news after Easter.

In the Salmon Enterprises appeal heard in London on Tuesday 20th March, HMRC was represented by Charles Bradley of Pump Court Tax Chambers. A distinguished and gentlemanly young barrister with a double first in history at Cambridge, it remains to be seen whether his arguments for HMRC’s case based on interpretation of legislation and authorities will outweigh our arguments for justice and morality. Perhaps history will surprise us all after Easter.

I would like to pay tribute to the dignity and courage of the appellants at the Salmon Enterprises hearing. Having traveled down from the north of England, and spent many days preparing themselves mentally and intellectually for the ordeal before them, my heart went out to them both. A teacher and an IT analyst, both victims had worked hard all their lives and led exemplary lives before falling victim to this scam at the hands of criminals.

These two appellants – like the Ark victims – have endured years of worry and damage to their health since they were scammed in 2011. I was immensely proud of them as they stood in the witness box and represented, effectively, all victims of the Salmon Enterprises and Ark cases.

As I listened to the case put forward by HMRC, and the testimony of their witness, the words of Margaret Snowdon (speaking at the Transparency Task Force Symposium in November 2017) kept ringing in my ears:

“It is morally wrong to impose tax penalties on victims of fraud”.

Margaret was appointed an OBE in 2010 and has, uniquely, for six years running been named as one of the Top 50 Influential People in Pensions and was awarded for her outstanding contribution to the pensions industry by the PMI in 2012.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

FOLLOW PENSION LIFE ON TWITTER TO KEEP UP WITH ALL THINGS PENSION RELATED, GOOD AND BAD.

March 25, 2018