Tag: Pension Scams

  • Three words about pension scams

    Three words about pension scams

    Three words about pension scams

    Can I have a word please?  In fact – can I have three words?

    free

    loophole

    sophisticated

    Now, these are not just any old words – they are the keys the scammers use to unlock victims’ savings and make huge amounts of money out of destroying innocent people’s retirement income:

    http://www.professionaladviser.com/professional-adviser/feature/2441535/revealed-the-top-three-watchwords-in-pension-liberation-scams

    Let´s look at these words in more detail to see how they become part of the language of fraud:

    “Would you like a free pension review?”  The answer is so often a heart breaking “yes please!”  This leads on to the scammers telling a bunch of lies about how the existing (often final salary) pension is no good and needs to be transferred offshore and invested in store pods, car parks, holiday resorts, care homes, student accommodation, derelict German government buildings and forestry.

    “Would you like a free pension transfer?”  Again, people who don’t understand the question think “free” means “free”.  It doesn’t.  So often, the transfer ends up costing a huge amount in hidden fees and commissions which are not disclosed up front and often only discovered years later.

    “You can access your pension free of tax”.  That old chestnut!  When you are told that by the author of the Tolley´s Pensions Taxation Manual, it is hard to figure out for yourself that it isn’t true.  But it isn’t.  Or, at least, HMRC don’t think it is true and they send you fat tax bills.

    “You can access your pension free of tax because of a legal loophole”.  The scammers claim that because the liberation is a loan (which doesn’t need to be paid back) there will be no tax.  Again, the scammers and HMRC don’t sing from the same hymn sheet and HMRC inevitably demand 55% tax on the “loan”.

    Scammers try to fool victims into thinking they are regulated.  One loophole often used is to become a tied agent of an offshore firm which is regulated to create the illusion that the scammer’s firm is regulated.  Only too late do the victims realise this is not the case; there is no regulation in force and therefore no safety net when the inevitable happens and the pension fund is worthless.

    In both knitting and crotchet, loopholes are an essential part of creating a jumper because they are used (and exploited) to put the next stitch in; the next row; the next part of the pattern.  And this is how the world of the pension and investment scammers works.  And the jumper gets bigger and bigger as every day the scammers find more ways to trick, con, deceive, defraud and scam thousands of victims out of their savings.

    The scammers frequently trick victims into agreeing they are “sophisticated” investors in order to invest in high-risk, illiquid assets and UCIS (unregulated collective investment schemes).  The victims often think the use of the word sophisticated is a compliment and they don’t realise this is just one of the many weapons in the scammer’s arsenal to help market the toxic wares.

    The scammers’ business models become increasingly sophisticated as the industry and regulators struggle to keep up with their methods of scamming.  The scammers got very rich selling other people’s funds for enormous commissions.  Now they sell their own funds and conceal what the assets of the funds are.  But, of course, the underlying investments are the same old same old toxic rubbish.

    The scammers use very sophisticated terminology to bamboozle the victims into believing the investments are desirable: “highly diversified and non-correlated investment portfolio providing maximum growth”; “asset classes have not only attracted the attention of the fund managers but also many astute investors”; “state of the art markets (such as store pods)”.

    In fact, this whole stinking mess can be summed up by the phrase: “no such thing as a  free sophisticated loophole”.

    Often scammer aren´t even qualified to give any financial advice, make sure you know what qualifications they need to advice you on your pension transfer.

    Click here to make sure you know what questions to ask when transferring your pension.

    Trolley’s Pension Scam Guide

  • Scorpion Campaign and Henry Tapper

    Scorpion Campaign and Henry Tapper

    The Scorprion Campaign and Henry Tapper

    The Scorpion Campaign was the Pensions Regulator’s attempt to warn the public and the industry against pension liberation scams.  It wasn’t a bad try, but it failed.  It was a bit like trying to stop a herd of stampeding elephants with a whoopee cushion.

    Henry Tapper, pensions actuary and dedicated blogger on pensions, posted this:

    https://henrytapper.com/2015/07/20/trust-me-im-a-scorpion/

    The problem is that many pension trustees don’t take any notice.  They didn’t back in 1999 when HMRC and tPR (then OPRA) first warned trustees about pension liberation fraud.  They didn’t in 2003 when the first two liberation fraudsters – Steve Russell and William Ferguson – were jailed.  They didn’t in 2010 and 2011 when the huge tide of Ark and Tudor Capital Management transfer requests into bogus occupational schemes were processed without so much the tiniest flicker of curiosity or interest.  They didn’t in 2012 when 300 transfers into Capita Oak were made – even though the sponsoring employer didn’t exist.  When the Scorpion Campaign was launched in February 2013, the trustees carried on making transfers into Capita Oak and the sister scam, Westminster (with the same non-existent sponsoring employer).

    Now here’s the puzzling thing: didn’t the Pensions Regulator notice that their Scorpion Campaign was failing?  Usually, when time, effort and money are invested in an important project, there is some sort of measuring process deployed to see how effective and successful the project is and to examine whether any improvements or reinforcements are needed.  Clearly not in the case of tPR and Scorpion, because the same old same old scammers were allowed to keep registering pension schemes and becoming trustees and administrators of “occupational” scams obviously designed to defraud innocent victims.

    Don’t take my word for it though.  https://www.ftadviser.com/2016/07/05/pensions/pension-scheme-gets-dressing-down-from-regulator-bZo5EVFahYzEFkvNsF8jdK/article.html

    In particular, the regulator issued a damning assessment of the scheme’s former trustee, Dorrixo Alliance, and its director Stephen Ward.

    So, didn’t anybody at the Pensions Regulator (or HMRC for that matter) notice that Stephen Ward had become trustee of the doomed London Quantum “occupational” scheme (now in the hands of Dalriada Trustees)?  Didn’t the memory of Ark, Evergreen, Capita Oak, Westminster and dozens of other liberation scams run by Ward and Dorrixo ring any bells?  Didn’t London Quantum’s address: 31 Memorial Road, Worsley cause a sharp intake of breath?

    The answer to all of the above is, of course, a resounding “no”.  The Scorpion Campaign’s warnings were ignored 96 times in 2014 in the London Quantum case.  Negligent, lazy and incompetent trustees handed over a total of £6.8 million to an obvious scam which had all the hallmarks of Ward’s handiwork – including the fact that it was registered to Ward’s UK address.  But not a single one of the trustees heeded tPR’s Scorpion warning – including the trustees of the Police pension scheme.

    My advice to the Pensions Regulator, is to put the whoopee cushion away.  It doesn’t work.  The stampeding elephants are too big and too determined.  And don’t just knit a bigger whoopee cushion either – ban cold calling and put the scammers behind bars.  Then spend some money on advertising (after all, the government found £10m to spend on the Remain campaign – which was arguably a complete waste of money).

    And by the way, the Regulator’s “dressing down” was a complete waste of time.  It might just as well have been a formal dressing gown for all the effect it had.

  • Justice Morgan’s Mad Mistake: Donna-Marie Hughes and Royal London Mutual Insurance Society

    Justice Morgan’s Mad Mistake: Donna-Marie Hughes and Royal London Mutual Insurance Society

    JUSTICE MORGAN’S MAD MISTAKE

    (IN THE HIGH COURT OF JUSTICE, CHANCERY DIVISION)

    The law is an ass – especially when it fails to protect pension scam victims

    This judgement makes the law not just an ass, but a whole herd of donkeys.

    Dear Justice Morgan

    I refer to your judgment in the matter of Donna-Marie Hughes and Royal London Mutual Insurance Society Case Number CH/2015/0377 on 19th February 2016.  

     

     

    With absolutely no apology whatsoever, I must point out that your judgment – overturning the Pensions Ombudsman’s Determination in this matter – is so stark staring, raving mad that it verges on utterly bonkers.

    In a number of complaints, the Ombudsman has found that although the legislation is missing a few key words, it is clear that a person should only transfer into an occupational scheme if they are genuinely employed by the sponsor of the scheme.  The Ombudsman drew attention to the fact that the words “employed by the sponsor of the scheme” are, curiously, missing (obviously, whoever wrote that passage nipped out for a liquid lunch at the crucial moment).  But he used his common sense and pointed out that it would be a “very strange result” if a person wanted to transfer into an occupational scheme without any employment relationship or arrangement with the sponsor.

     

    It is my obligation to refer you to the fact that the industry, regulators, law enforcement agencies, courts, ombudsmen and victims (existing and future) desperately need the legislation to be tightened – not relaxed (or, as in this case, made completely impotent).  This judgment has effectively given the green light for hundreds of scammers to scam innocent victims out of their hard-earned pensions.

     

    History, since 2011, shows that various pension liberation scams including Ark (Lancaster, Portman, Cranbourne, Woodcroft, Tallton, Grosvenor) Capita Oak, Westminster, Evergreen, Salmon Enterprises, Eric’s Yard, Pennines, London Quantum, Headforte, Southlands etc., all share a collection of common traits:

     

    1. They were set up, administered and promoted by unregulated firms
    2. These firms obscure the identity of the team
    3. The address of the firm is a virtual office
    4. The assets of the scams being peddled include high risk, illiquid, speculative investments entirely unsuitable for pensions
    5. Bogus “occupational” schemes are registered with HMRC and tPR (who do nothing to check that the sponsoring employers actually trade or employ anybody – or indeed even exist at all)
    6. Pensions are liberated using a variety of “loan” structures which victims are assured are legitimate “loopholes”
    7. Transfer and loan fees are extortionately high
    8. Victims are promised unrealistic gains such as “guaranteed 8% return per annum”
    9. Assets are entirely unsuitable for pension schemes and often include huge “kickbacks” for the introducers

     

    The firms and individuals offering these schemes have included:

    • Premier Pension Solutions in Spain (run by Tolleys Pensions Taxation author Stephen Ward – available on Amazon if you need a copy: http://www.amazon.com/Tolleys-Pensions-Taxation-2014-2015-Stephen/dp/0754549356)
    • Gerard Associates http://www.gerardassociates.co.uk/
    • Frost Financial
    • Continental Wealth Management
    • J. P. Sterling
    • Viva Costa International
    • Windsor Pensions
    • Blu Debt Management
    • Wealth Masters
    • Paul Baxendale-Walker
    • James Lau

    Thousands of victims have lost £ billions and gained £ millions in tax liabilities.  The assets of these schemes have included offshore property, store pods, car parking spaces, unregulated collective investments, eucalyptus forests, hedge funds, forex, Cape Verde etc.

    Now, I am not saying that Bespoke Pension Services are scammers.  http://bit.ly/1VGeSPn but on the back of their victory in the case of Ms. Hughes, there are a further 160 blocked pension transfers sitting with the Pensions Ombudsman.  We have no way of knowing whether they will all be pension transfers invested in Cape Verde, but we do know the Hughes case must have been very important to Bespoke Pension Services’ business.  After all, they must have invested a considerable amount in legal fees to take an £8,000 transfer attempt to the High Court.

    Interestingly, Bespoke Pension Services are unregulated and their address is a virtual office.  According to their latest published accounts the firm is insolvent.  The two directors/shareholders – Mark Anthony Miserotti and Clive John Howells – have between them an impressive portfolio of investment, consultancy, property development, investment and financial planning companies – one of which is called “Fortaleza Investments” which suggests something Brazilian.

    On the back of your judgment in respect of Royal London, there will be a serious problem for all the pension providers who performed so appallingly in Ark, Capita Oak, Westminster, Evergreen et al: the worst of which being Standard Life, Prudential, Scottish Widows, Aviva and Legal and General.  Having handed over £ millions worth of pension funds since 2010 – in a lazy, negligent, box-ticking fashion – there is evidence that they are trying to mend their ways.  Or there had been, until your judgment in the Hughes/Royal London/Bespoke Pension Services case.

    I would draw your attention to Clause 53 in Justice Bean’s Ark ruling where he makes it clear that legislation wording must be interpreted intelligently – and not blindly.

    Justice Bean ruled on the ARK Pension Scam case

    He is obviously trying to make the point that it is essential to avoid an anomalous or unjust result from failing to look behind the intended meaning of wording.  Indeed, the Pensions Ombudsman had already done that when looking at the wording when he said that he found that a transferee did need to be employed by the sponsor of an occupational scheme in order to avoid a “strange result”.

    Your judgment has put at risk thousands of victims’ pensions.  There have already been suicides, nervous breakdowns, life-threatening illnesses, broken marriages and families.  There will be widespread poverty in retirement and many people will lose their homes.  A strange result indeed – which does rather beg the question of how victims will get any protection or justice now?

    This judgment makes the law not just an ass, but a whole herd of donkeys.

    Regards, Angie Brooks

     

  • Trafalgar Multi Asset Fund

    TRAFALGAR MULTI ASSET FUND (SUSPENDED)

    After the disasters of failed pension schemes Capita Oak, Henley and Westminster (aggregate of £20 million lost to over 500 victims through investments in Store First store pods – wound up by the Insolvency Service), there are now concerns about the suspended Trafalgar Multi Asset Fund of £20 million.  The board of directors have published the below report and are investigating how this fund came to be mostly invested in one asset: Dolphin property development loans.

    In fact, Dolphin was one of the assets of Stephen Ward’s London Quantum scam which is now in the hands of Dalriada Trustees (appointed by the Pensions Regulator).  Dalriada stated a year ago that Dolphin was not a suitable investment for a pension scheme and yet the investment manager of Trafalgar has invested most of the fund in Dolphin.

    The unlicensed adviser to the victims was also the investment manager of the Trafalgar fund.  The advisory firm, Global Partners Limited – which then changed its name to The Pension Reporter – was an agent of a firm called Joseph Oliver and was not licensed to give pension or investment advice.

    Trafalgar Multi-Asset Fund (Suspended) shareholders report (excerpts):

    Board’s significant concerns with respect to the conduct of the Investment Manager:

    • Repeated and consistent failure to carry out and maintain records of proper due diligence with respect to investments
    • Making investments which involve inappropriate or unjustified risk, particularly in allowing the over-exposure to two counterparties and allowing loans to suspected related parties without any disclosure of interests to the Board
    • Repeated and consistent failure to ensure that the position of the Fund is properly protected by having appropriate, properly executed legal documentation in place
    • Repeated failure to provide the Board with relevant information with respect to investment activity e.g. variations to the arrangements with investments in Dolphin and Quantum
    • Inability to answer straightforward questions put forward by the Auditors
    • Providing misleading and even dishonest information to the Board
    • Transacting business on behalf of the Fund knowing that the Board had suspended subscriptions and redemptions
    • Failure to make investments which are appropriate for the Fund

    The question must also be asked of STM Group WHY DID THEY ACCEPT BUSINESS FROM AN UNLICENSED ADVISER AND ALLOW THEIR VICTIMS TO HAVE 100% OF THEIR PENSIONS INVESTED IN A FUND WHICH WAS A SCAM?  THE TRAFALGAR MULTI ASSET FUND WAS A UCIS WHICH IS ILLEGAL TO BE PROMOTED TO UK RESIDENTS.  STM ARE ENTIRELY NEGLIGENT AND CULPABLE FOR ALLOWING THIS SCAM TO HAPPEN AT ALL.

  • Salmon Enterprises Pension Scam – how it all worked

    Salmon Enterprises Pension Scam – how it all worked

    SALMON ENTERPRISES PENSION SCAM – THE WAY THE SCHEME WORKED

    James Lau, allegedly a financial adviser with Wightman Fletcher McCabe operating from an office in the Regus building, Great Pultney Street, Bank London. Lau explained the Salmon Enterprises pension scam to clients using a series of diagrams that members could release funds from a pension transfer and use them for any investment rather than be tied to investments chosen by the pension trustee/administrator.  He also explained that part of it could be taken out as a loan which he claimed was legal.  He also stated that HMRC was aware of this and accepted that it was not a tax avoidance scheme.

    Members never received any loan agreement or pension statement from either James Lau or the trustees – Tudor Capital Management – despite repeated requests to both Lau and his assistant Victor Ray.  A number of members subsequently introduced the scheme to friends, family and associates.

    The advantages stated by James Lau were that pension funds could be released legally and used for a person’s own use.  Members could invest it or receive as a non-repayable loan which was “legal and non-taxable as it was a commercial loan”. Lau also claimed the loan would have a nominal percentage each year to pay back which would be covered by the rest of the pension left (approx. 15% of the transfer) which would be invested. The returns it would make would cover the interest of the loan.  Lau made it clear this was not a tax avoidance scheme and complied with HMRC rules and that the loan could be extended.

    Lau also claimed that the underlying assets of the scheme were “various, diverse, low-risk opportunities, including forex in his own company Goswell Square Capital – a venture with Omari Bowers and Andrew Skeene who have since been investigated and made bankrupt following the collapse of the FX venture.

    James Lau claimed to be authorised by the FSA at the time with Wightman Fletcher McCable under the Clarkson Hill insurance group.

    The trustees of the Salmon Enterprises pension scam – Tudor Capital Management – were the subject of a criminal investigation by the CPS, HMRC and the Pensions Regulator which was published on 8.4.2010 (prior to many of the transfers) and resulted in the trustees: Peter Spencer Bradley, Alison Bradley and Andrew Meeson, being jailed for tax fraud.  Tudor Capital Management had been the trustees for 25 schemes in total.

     THE IDENTITY OF THE MAIN PLAYERS

    James Lau

    Victor Ray

    Peter Spencer Bradley

    Alison Bradley

    Andrew Meeson

    HOW THE MAIN PLAYERS WERE INVOLVED

    Lau was the main promoter; Ray was the administrator; Bradley and Meeson (now in jail) were the trustees.

     

  • Pennines Pension Scam: How it worked

    Pennines Pension Scam: How it worked

    THE WAY THE PENNINES PENSION SCAM WORKED

    Members were targeted by “Cash From Pensions” and persuaded to transfer into Pennines to get an “unconnected loan” once they had transferred into the Pennines scheme which was invested in Hedge Capital.  The scheme is now in the hands of Dalriada Trustees.

    There were around 143 victims with a total value of £3,280,325.27 worth of transfers in the fund. The Pennines pension scam was run alongside two other schemes: Mendips and Malvern between August 2011 and March 2012.  The trustee was John Laurence Woodward (of HCL) and Jennifer Doris Ilett.  The administrator was  T12 Administration.

    The promoters of the scam were Unlock My Frozen Pension and Cash 4 Pensions (Adrian Price). The “hook” used to tempt victims into the scam was the assurance that they could “legally access pension funds without incurring tax liabilities”.  The fees charged were 3% per annum plus £500 management fee

    Dalriada Trustees were appointed on the 28th March 2012 by the Pensions Regulator. The victims of the Pennines pension scam liberated various amounts ranging from 25% upwards and HMRC started sending out protected assessments in March 2015.

    http://www.thepensionsregulator.gov.uk/docs/dn2144796.pdf

    http://www.bailii.org/ew/cases/EWHC/Ch/2012/21626.html

    One very distressed victim of the Pennines pension scam – who has been treated for severe depression for several years as a result of this scam – reported:

    “I was doing several searches online for a loan, that would maybe accept a person with bad credit when the “unlock my frozen pension” appeared.  It all seemed very legitimate so I sent off an enquiry form.

     I was called back immediately by a member of the unlock my frozen pension team, they spent a lot of time telling me that they would put me in contact with a company called Hedge Capital who would transfer my pension into their scheme, and that I would legally be able to access 25% of my pension fund as a tax-free lump sum which was to be repaid once I reached the age of 55 .  In the meantime, the remaining amount of my pension would be invested , in the scheme until I reached the age of 65 and there was little or no risk involved.

     I was also contacted by a company called Money Helpers, who prompted me to word an email to Towers Watson for the transfer of my pension.  My knowledge of the pension and taxation position was very limited at that time and I believed what I was being told by the Unlock My Frozen Pension people. I contacted Towers Watson who held my pension from JP Morgan (my former employer) about the transfer and they told me they were happy to go ahead with it.

    I believed I was taking an advance on my pension in a perfectly legal manner as it was to be repaid at age 55.”

     

     

  • London Quantum Pension Scam: How it worked

    London Quantum Pension Scam: How it worked

    HOW THE LONDON QUANTUM PENSION SCAM  WORKED

    The London Quantum pension scam was the brainchild of Stephen Ward.  Ward’s firm Dorrixo Alliance was the trustee and administrator of the scheme.  Dorrixo was also trustee for a number of other pension liberation scams such as Headforte and Southlands which were used for “loans” when Evergreen got removed from the HMRC QROPS list.

    London Quantum victims were promised “healthy” returns and the scheme is now in the hands of Dalriada Trustees who were appointed by the Pensions Regulator in 2015.

    THE IDENTITY OF THE MAIN PLAYERS

     Stephen Ward of Dorrixo Alliance (trustee/administrator)

    Gerard Associates

    Viva Costa International

    HOW THE MAIN PLAYERS WERE INVOLVED

     Ward’s Dorrixo Alliance was the trustee/administrator.  Gerard Associates https://www.gerardassociates.co.uk/ (website undergoing “routine maintenance”) provided (or didn’t provide) advice.  VCI were the introducers.

    WHAT THE PENSIONS REGULATOR SAID ABOUT THE SCAM

    TPR gave Stephen Ward a stern “dressing down” over the London Quantum scam and warned all pension savers to be extra careful when considering transferring away from their existing pension, after publishing details of governance failings in the London Quantum Retirement Benefit Scheme.

    The London Quantum pension scam brought into sharp focus how people should remember that promises of high and/or guaranteed investment returns that sound too good to be true are often scams.

    While investigating this scam, the regulator discovered that more than £5.8 million worth of victims’ pension funds had been put at risk between August 2014 and May 2015.

    Nicola Parish, Director of Case Management at TPR, said: “The concerns we received about the scheme highlighted worrying factors regarding its governance.

    “This case should act as a reminder to all savers, pension scheme trustees and administrators to remain alert to the dangers of transferring pension savings in order to access unrealistically high returns often associated with exotic sounding investment opportunities.”

    TPR reported that, as trustee, Dorrixo – run by Stephen Ward and his sidekick Anthony Salih, had a “serious disregard to the obvious risks that members might be misled about the true nature of the investments held by the scheme”.  The regulator also exposed other aspects to Ward’s scam which included:

    • Risky and illiquid investments
    • Lack of documentation
    • Introducer fees – The scam was promoted to victims by introducers and cold callers, who were paid up to 30%.
    • Advisers – There was no auditor was appointed to the scheme and Stephen Ward did not take proper advice on the investments.

    Clearly, the London Quantum scam was never set up for the benefit and in the interests of the victims, but in the interests of Stephen Ward and his team of scammers to earn the maximum amount of commission out of the toxic, illiquid, high-risk investments.

     

  • Henley Pension Scam

    Henley Pension Scam

    HENLEY PENSION SCAM

    THE WAY THE SCHEME WORKED

    This was the “sister” scheme to Capita Oak, whose trustee was Imperial Trustee Services.  The Henley trustee was Omni Trustees.  Both Omni and Imperial were wound up by the Insolvency Service in the summer of 2015 and the two schemes had around £20m invested in Store First store pods.  Store First is part of Toby Whittaker’s Group First – and another of his companies is Park First which Stephen Ward’s London Quantum scam was invested in.

    The Henley Retirement Benefits Scheme was a bogus occupational scheme registered by HMRC and the Pensions Regulator.  The scheme received £8.6m from members of the public between 2012 and 2013.  

    The administrator to the scheme was T12 Administration followed by DBC Pension Services Ltd on 7.3.13. Stuart Chapman-Clarke’s firm Sanderson Clarke was involved in promoting the scam.  The store pods were purchased by solicitors Metis Law in Leeds.

    The victims were promised guaranteed 16% returns and were told they could legally access 50% of their pension without incurring tax liabilities.

     

    https://www.pensions-ombudsman.org.uk/wp-content/uploads/PO-4414.pdf and https://www.gov.uk/government/news/insolvency-service-takes-action-to-protect-pension-funds

     

     

  • The Pensions Regulator: Updated Trustee Toolkit

    The Pensions Regulator: Updated Trustee Toolkit

    The Pensions Regulator is a UK body set up to regulate and aid occupational pensions. They follow legislative criteria and work to improve the administration of work-based pensions. They are a valuable resource for all parties involved with pensions; trustees, employers, pension specialists and business advisers.

    Their latest innovation is the updating of their trustee toolkit.  It is based on the Pensions Act of 2004 and provides the minimum requirement for trustee compliance with this Act.

    The new toolkit provides everything from self-assessment to online learning modules and downloadable resources.

    The user needs to complete a login profile which gives access to all the information. It does lack some exact form of structure as to how you should complete the learning programme and there does not seem to be any form of certification on completion. Still, it is a valuable resource.

    One would just wonder as to voluntary nature of this type of educational programme for trustees especially in light of how many trustees became ceding providers to scam liberation schemes.

  • Edward Troup HMRC’S Role in Six-Year Pension Liberation Fraud

    Edward Troup HMRC’S Role in Six-Year Pension Liberation Fraud

    Edward Troup                                                                                                                                                                    11th March 2016

    Chief Executive’s Office

    HM Revenue & Customs

    100 Parliament Street

    London SW1A 2BQ

     

    Dear Mr. Troup

    HMRC’S ROLE IN SIX-YEAR PENSION LIBERATION FRAUD

    Congratulations on your appointment as head of HMRC.  I am sure you will have a great deal of work on your plate cleaning up the many problems left behind by your predecessor Lin Homer, but I must ask you to address the issue of HMRC’s involvement in pension liberation fraud/unauthorised payment tax as a matter of priority.EDWARD TROUP HMRC PENSIONS LIBERATION ACCOMPLIACE

    I have asked HMRC and government ministers on numerous occasions to address the question of a tax amnesty for victims of pension liberation fraud.  The answer has always come back that this would not be considered as it would “send out the wrong message”.

    I must point out that HMRC and the government have already sent out a very clear message to the British public that Homer’s long series of professional disasters and incompetence have been rewarded with her being made a Dame; avoiding being sacked; receiving a handsome pension of £2.2 million.  This was not just a “wrong” message, but a disgraceful one.

    Further, the recent scandal of major corporations such as J. P. Morgan, Amazon, Google, Starbucks and Netflix being let off £ billions in tax has not only undermined the principles of national fiscal responsibility, but it has also sickened the public and brought disgrace on both HMRC and the government.  Another “wrong” message which harks back to Homer’s equally inept predecessor, Dave Hartnet, who was caught doing cosy “sweetheart” deals over lunches with tax dodging corporations.

    The catalogue of HMRC’s numerous blunders and failures is too long to go into here, and of course the message for many years has been that HMRC have forgotten that they are public servants, and have ignored their own taxpayers charter: “We want to give you a service that is fair, accurate and based on mutual trust and respect. We also want to make it as easy as we can for you to get things right.”  That would be the right message if it were true.  But, sadly, it isn’t.

    Turning to the question of the tax amnesty for victims of pension liberation fraud, HMRC’s role in facilitating this massive, international financial crime has been significant and culpable.  HMRC registered all the scams in the first place, deploying zero due diligence, responsibility or common sense.  Then, when HMRC realised that they had been responsible for greasing the scammers’ wheels, they did nothing to de-register the schemes and prevent victims from being scammed.  There is substantial irrefutable evidence that HMRC was repeatedly registering occupational schemes to known scammers – without any regard whatsoever to the obvious fact that the scammers habitually used the term “HMRC approved” to dupe the victims into believing that the schemes were legitimate.  The message that this has sent out to the British public is that HMRC has not only been profoundly inept and irresponsible, but has also fuelled the suspicion that HMRC may even have been deliberately complicit in the scams since they have potentially raised many £ millions in tax revenues.  This sends out the message that in fact HMRC is no better and no less culpable than the scammers themselves.

    On 21 February 2014, Lin Homer emailed me to assure me she would be investigating HMRC’s failings and promised she would be taking the matter very seriously.  She undertook to get back to me the following week.  That was the last I heard from her – despite me emailing her many times in the past two years.LIN HOMER PENSION LIBERATION

     

    I trust you will ensure that appropriate sanctions are imposed on Homer for her abject failures and a full investigation undertaken to establish whether she has in fact been in league with the scammers.  This would, of course, explain why so many schemes were repeatedly registered to the same, habitual scammers.

    It would also explain another mystery.  In June 2014, I handed evidence of a large number of pension liberation schemes being run by Stephen Ward – including the pension trustee firm Dorrixo Alliance which had registered many schemes with HMRC over a long period of time.  One of the occupational pension schemes registered by Dorrixo Alliance was London Quantum.  But neither HMRC nor tPR did anything about London Quantum and it was not de-registered – as it clearly should have been immediately.

    In August 2014, a serving Police officer lost his Police pension fund to London Quantum.  But it was not for a further year that tPR placed the scheme in the hands of Dalriada Trustees.  The scheme was filled with the usual toxic, illiquid assets which would have earned handsome investment introduction commissions for the trustees, administrators and promoters.

    In the case of the Store First store pod pension investment scandal, well over a thousand victims lost their pensions totalling over £100 million to a number of pension scams – including Capita Oak which was administered by Stephen Ward.  Approximately half of this was paid out in commissions.  But, instead of hounding the scammers who received these commissions, or Store First’s owner Toby Whittaker who paid them, HMRC will be pursuing the victims who liberated part of their pensions in the form of “loans”.  Not only does this send out the wrong message, but it also raises the question as to what extent HMRC were indeed complicit in all of this financial crime.

    I have sent out a questionnaire to hundreds of pension liberation scam victims asking them why they believed their pension loans were legal and tax compliant.  The answers were pretty much all identical (and I will be sending you a summary separately): they were told there was no connection between the pension transfer and the loan and that the transaction would not trigger an unauthorised payment charge as it used a legitimate tax “loophole”.  Many were told that the scheme was approved by HMRC and of course the HMRC registration certificate gave credence to that claim.  The parties who “advised” the victims to enter into these scams included regulated and unregulated IFA’s; practising solicitors and accountants; various introducers and promoters; debt management consultants; mortgage and insurance brokers; and Stephen Ward – government consultant, former pensions examiner and author of Tolleys Pensions Taxation.

    The claim by the government and HMRC that a tax amnesty for victims “would send out the wrong message” is absolute nonsense and an insult to all those who are existing victims of scams and all those who will now become victims as a result of Justice Morgan’s recent ruling.  I know of not a single person who deliberately and consciously set out to liberate their pension in the full knowledge that it was not a tax-compliant transaction.  Furthermore, ruining thousands of fraud victims with crippling tax liabilities will force many into bankruptcy and they will lose their homes.  These people will then become dependent on State benefits for the rest of their lives – and the unauthorised payment tax collected will last a mere couple of years before the Treasury is out of pocket.  On top of this, there will be the vast cost to the NHS of the long-term health problems these victims will inevitably suffer.

    Please let me know what date will be convenient for an urgent meeting to discuss this and agree a solution.  Just to be clear, the agenda will be to agree a tax amnesty for victims of financial crime facilitated by HMRC and to seek compensation for the damage that HMRC’s negligence has caused.  At this meeting we will need to examine in depth the various issues surrounding HMRC’s role in pension liberation fraud during the past six years and explore some appropriate remedies.

    For the avoidance of doubt, I set out below the key items:

    • Since 2010, HMRC have been registering schemes without checking the credentials of the trustees, the sponsoring employer or the purpose behind the scheme (i.e. to provide income in retirement, to operate pension liberation or to earn huge commissions on investment introductions).
    • Why did HMRC fail to de-register schemes as soon as there were concerns in order to prevent victims from losing their pensions and gaining crippling tax liabilities? If you remember, HMRC had a meeting with Stephen Ward of Premier Pension Solutions to discuss the Ark schemes in February 2011. At this time, there was about £7m in Ark, but HMRC did not suspend the registration and nothing was done to close the scheme down until three months later by which time there was £30 million in Ark.  Hence, HMRC was directly responsible for hundreds of victims’ financial ruin and is currently pursuing these people for tax which was entirely preventable had HMRC suspended the schemes.
    • Subsequently, having known that Stephen Ward was heavily involved in pension liberation, HMRC then went on to accept numerous pension scheme registrations from him and his company Dorrixo Alliance at 31 Memorial Road, Worsley. These included Southlands, Headforte and London Quantum – among many others.
    • HMRC was handed evidence of these various schemes in May 2014, and yet took no action to suspend any of the schemes. Then in August 2014 a serving police officer lost his police pension to London Quantum.
    • In 2010/2011, HMRC, the Crown Prosecution Service and the Pensions Regulator were all investigating the fraud being perpetrated by pension trustees Tudor Capital Management. But although there were a total of 25 different schemes involved – one of which was Salmon Enterprises (yet another bogus “occupational” scheme) – HMRC did nothing to suspend the schemes and prevent victims from losing their pensions and being exposed to tax liabilities.
    • HMRC is currently pursuing thousands of pension scam victims for tax on transactions which could – and should – have been prevented had HMRC acted diligently. HMRC’s negligence must be acknowledged and this anomalous, unjust situation must be put right in accordance with HMRC’s own charter.

    Yours sincerely

     

     

     

    Angela Brooks – Chairman, Pension Life

     

    c.c. Justice Morgan (Chancery Division); Steve Webb (Royal London); Ros Altmann (Pensions Minister); Andrew Warwick-Thompson (the Pensions Regulator); Boris Johnson (Mayor of London); David Gauke (Treasury Secretary); George Osborne (Chancellor)

     

  • Ceding Pension Providers Facilitating Financial Crime

    Ceding Pension Providers Facilitating Financial Crime

    Below is a list of the ceding pension providers (CPPs) that are currently being dealt with at Pension Life and who have been facilitating financial crime. This is not a definitive list as we are currently dealing with an ever increasing pile of protected assessments appeals to process ahead of the deadline. We will be adding to the list.  But all of these ceding providers have helped the scammers commit financial crime.
    The worst personal performer was Standard Life – by a mile, and the worst occupational performer was Royal Mail.
    The biggest single transfer was £800k (LV=), followed by £670k, then £400k.  However, these are exceptions as the average transfer value across all members is around £75k.
    The other potential defendants are the advisers who introduced or sold the schemes, but there are only a handful which are regulated or still in existence.
    Abbey National – JLT Benefit Solutions Ltd
    Aegon
    Aegon – SEBO
    Aegon/Scottish Equitable
    Aon Alexander & Alexander UK
    Asda/Walmart
    Aviva
    Aviva UK Life
    AXA
    AXA Pension Scheme
    B & CE
    Bank of America
    Bank of Ireland Life
    Barclays
    Barnett Waddingham SIPP
    BBC Pension Scheme
    British Airways
    British Life Reliance Mutual
    British Midland (Aon Hewitt)
    British Steel
    BT plc
    Capita Hartshead
    Cater Allen
    CIBC Retirement Savings Plan, Mercer
    CIS
    Clerical Medical
    Coats
    Co-operative Insurance
    Countrywide Assured
    DBS Pension Services Ltd  WYKI Group Scheme
    DHL
    Essex Police Authority
    Fidelity – Lotus Development Pension – Occupational
    Friends Life
    Friends Prov
    G4S
    HSBC
    HSBC Trust Company (UK) Ltd
    Independent Order of Foresters
    Invensys Pension Scheme
    J. P. Morgan
    Legal and General
    LGPS Newham Council
    Liberty Pensions
    Lloyds TSB
    Lloyds TSB
    London Borough of Bromley
    London Borough of Lewisham
    LV=
    Marks and Spencer
    Mercer News International Pension Plan
    Mercer, Scottish and Newcastle
    Mercer/Napp Pharma
    MGM Advantage
    MYSIPP
    N Brown Group Pension Fund
    National Grid
    National Health Service Superannuation Scheme (Scotland)
    NHS
    Northumbria Police Pension Scheme
    Pearl
    Pearl Group Staff Pension Scheme
    Phoenix
    Phoenix
    Phoenix Life
    Principle Civil Service Pension Scheme
    Prudential
    Prudential – Teachers AVC Facility
    RBS
    Reliance Mutual
    Rolls Royce & Bentley
    Royal London
    Royal Mail
    Royal Sun Alliance
    Scottish Life
    Scottish Life Assurance
    Scottish Widows
    Siemens Occupational Pension Scheme
    Skandia
    South Tyneside Council
    St James’ Place Wealth Management
    Standard Life
    Standard Life GPP Sipson Coachworks
    Standard Life PPP
    Strathclyde Pension Fund
    Sun Life Financial of Canada
    SunLife
    Teachers’ Pension Scheme
    Trinity Mirror
    Trinity Mirror, MGN Pension Scheme
    Virgin Money
    W. H. Smith
    Windsor
    Wolters Kluwer Pension Scheme
    Xafinity Paymaster
    Zurich
    Zurich Assurance Ltd

    Be safe with PensionBee!

  • Crabb New Secretary of DWP

    Crabb New Secretary of DWP

    Dear Mr. Crabb – latest DWP Secretary
    Congratulations on your appointment as Secretary of State for Work and Pensions – DWP.  I wish you well, and would ask you to engage urgently with the Ark Class Action representing hundreds of victims of pension fraud as we urgently need your help and support as we have been spurned and betrayed by both Duncan-Smith and Altmann. The DWP has indeed been a dismal failure.
    The Ark Class Action addresses a multi-billion pound problem, with thousands of people having lost their pensions and being targeted by HMRC with crippling tax demands. The tax collected will be a drop in the ocean compared to the long-term cost to the State of supporting and housing people who will be ruined and made homeless to pay the tax, and there is no mathematical or economic case for continuing with these demands.  Please see the our letter to Lin Homer’s replacement Edward Troup (LINK TO BE PLACED ON PUBLISH) for a more in-depth explanation of why this situation is such a disgrace to the government.
    Your predecessor has, unfortunately, disgraced himself with the Class Action as over a year ago he promised to champion our cause and arrange meetings with David Gauke and George Osborne.  It turned out he never had any intention of doing so, then he stole one of the victims’ Ark files and subsequently lied about it.  Ros Altmann has been little better, as she refused to meet two victims and me last December even though we had told her we were coming to her office.  You are therefore going to have to address a substantial amount of damage limitation in terms of your department’s performance.
    Pension scams are a huge international problem, with pension liberation being just one of the types of fraud perpetrated – not just in the UK but also all over Europe, the Middle East and beyond. There are regulated and unregulated firms, operating outright scams or grey-area cons.  The vast numbers of British victims losing their pensions to the scammers and con men undermine confidence in the financial industry and the financial services profession.  The disastrous “pensions freedoms” and the recent Justice Morgan case have made the situation significantly worse.
    Regrettably, your former job as Welsh Secretary has left a huge problem unresolved.  A Middle-Eastern firm of financial advisers was given a grant of £750k by the British government to create jobs in Wales, but instead of doing so, the money was taken offshore to the Gulf area and is now being used for illegal activities – including crimes against British citizens in Dubai, Saudi Arabia and Qatar.  This firm, which is not being pursued for repayment of the grant, is using this money to pay substantial bribes of hundreds of thousands of pounds to widen the scale of their market penetration.  I am happy to work with you to ensure the principals of this firm are brought to justice and the money repaid in full.