January 28/29 2021 saw the cross examination of Stephen Ward in Pension Life’s criminal case in the Denia court. Ward gave the judge an elaborate explanation as to how and why none of the Continental Wealth Management pension and investment scams were his fault.
Ward provided the pension transfer “advice” to hundreds of Continental Wealth Management victims – facilitating the handing over of millions of pounds’ worth of personal and occupational pensions into the hands of well-known, firmly-established scammers. Once out of the relative safety of the UK, and into the offshore abyss, the scammers made millions out of undisclosed commissions on the victims’ life savings. The investments were, of course, largely worthless. Victims lost somewhere between a small percentage and a large percentage – with a few losing 100%. And a few more even going overdrawn on their pension accounts.
Ward’s Spanish firm Premier Pension Solutions, worked as “sister company” to Darren Kirby’s and Jody Smart’s Continental Wealth Management. After Ark in 2011, Ward moved straight onto the Evergreen New Zealand QROPS liberation scam. And CWM did the cold calling to sign up 300 victims to the toxic £10 million pension scam and so-called “loans” from Ward’s own finance company – Marazion.
Ark (and indeed Evergreen) victims may well want an answer to the question: why hasn’t Ward been prosecuted before now? The lack of any previous criminal proceedings against him, for the many other scams he was involved in, is – indeed – astonishing.
Capita Oak, Westminster, Southlands, Headforte, London Quantum et al – could all have been prevented had Ward been behind bars. Victims of all of those scams might still have their pensions had it not been for Ward.
Part of the answer may lie with Dalriada Trustees. The firm was appointed by the Pensions Regulator to the Ark schemes as independent trustee on 31st May 2011. Over £27 million worth of pensions had been transferred from safe, professionally-run pension schemes into the six Ark schemes. Nearly 500 people are affected – many of whom had received reciprocal “loans” on the advice of Stephen Ward and his very convincing associates. Ward had assured all the victims that the loans would be “tax free”. But, of course, HMRC does not share that view – and the tax trial is starting in March 2021.
HMRC is looking to tax all those who did get “loans” and also all those who didn’t. HMRC’s argument is firstly that even if members didn’t get a loan, they had made the transfer with the intention of getting a loan, and secondly that they “made” a loan.
One of the first questions I ever asked Dalriada back in 2013 (appointed by the Pensions Regulator – who registered the Ark schemes in the first place) was:
“Why didn’t you bring criminal proceedings against Stephen Ward and all the other scammers who set up and ran Ark?”
Dalriada’s answer was:
“We didn’t think it was within our remit”.
So what is (or was) Dalriada’s remit? And has it fulfilled that remit? And how much has it cost?
DALRIADA’S REMIT:
To suspend the Ark schemes so that no further “loans” could be made; no further victims lost their pensions; no further toxic investments could be made
To investigate the schemes to find out how they had been run and where the money had gone
To recover the toxic investments and return the money to the schemes
To liaise with the members and keep them informed
To liaise with HMRC on the unauthorised payment tax liabilities
The above points are all guesses on my part. Certainly, Dalriada has admitted that they didn’t really know where to start at the beginning. They had no idea what they would find, once they started investigating, and no clue as to how much work was going to be involved.
Dalriada has, indeed, recovered some of the toxic investments in the Ark schemes. But communications with the members have been limp at best. Dalriada has spent a lot of time, effort and money on taking proceedings against the victims themselves to recover the “loans”, but seems to have spent zero time, effort or money on pursuing the scammers.
Most important of all, Dalriada has not invested any of the money left in the Ark schemes – so members (victims) have missed out on the longest investment bull run in history. Bottom line: there’s been no growth in the value of the Ark funds – only shrinkage. Had the funds been invested in something as simple as a low-cost tracker fund, they could have grown by some 330% at least.
Of the original £27 million in the Ark schemes, Dalriada has spent more than £7.4 million on trustees’ and lawyers’ fees between 31st May 2011 and 31st May 2020. But isn’t it reasonable to ask: “Why couldn’t Dalriada have spent some of that money on criminal proceedings against Stephen Ward and some (or all) of the other scammers?”
Dalriada Trustees have been appointed to more than 100 pension scams in the past ten years (by the Pensions Regulator). But there is no evidence that any of the scammers – especially the prolific Stephen Ward – have ever had any CRIMINAL action taken against them by Dalriada in an effort to prevent further scams.
Kelly reports that “Pension scam victims have lost millions of pounds more to the government-appointed trustees hired to get their money back.” and that “Victims say Dalriada Trustees ‘inexplicably’ held their recovered retirement savings for years and then only paid a fraction of their money back.”
Kelly has been to meet me in Spain several times. He attended the Denia court for the first set of cross examinations in 2020, and reports that “tens of thousands of savers had lost up to £10 billion in rogue schemes that looked safe because they were registered by HMRC and overseen by the Pensions Regulator”.
Kelly goes on to cite the case of one victim who waited seven years to have his £157,000 pension pot returned to him by Dalriada. But they deducted £90,000 in charges before handing it back to him. And this was after Dalriada had rescued the fund in full, before the scammers had managed to invest the money in toxic, commission-paying assets.
With 5,400 pension scam victims having Dalriada as their trustees, it is perhaps time to ask whether this is a tenable solution. Scammers could, realistically, be forgiven for thinking that once Dalriada takes charge, this is merely a license for the next scam, and the next one, and the next one…… Because, Dalriada is never going to report the scammers for fraud. So they are free to keep on scamming people out of their pensions repeatedly.
As we reach the halfway point in the criminal trial of the Continental Wealth Management and Premier Pension Solutions companies, I regret I am unable to give a detailed update on the case at this point. The first half of the eight defendants have been cross examined by the judge’s lawyer, and the second batch of four further defendants are due to be cross examined on 7th April 2020 (in the Denia Court of First Instruction).
This, of course, assumes there is no disruption to the proceedings caused by the Corona virus lockdown.
Dean Stogsdill and Neil Hathaway of CWM leaving the Denia Criminal Court on 25th February 2020 after being cross examined on charges of fraud, disloyal administration and falsification of commercial documents.
The first “batch” consisted of Patrick Kirby – Darren Kirby’s brother – who ran the CWM cold calling operation which sent so many hundreds of victims to their doom; Anthony Downs; Dean Stogsdill and Neil Hathaway who had various different titles at different times – ranging from Managing Director to Operations Director to Investment Director.
I can’t comment on the transcripts of the questions and answers on 24th and 25th February, and won’t be able to publish the full details of all cross examinations until all the defendants have appeared before the judge. The defendants on 7th April will be:
JodySmart – sole director and shareholder who paid herself over 1 million Euros in the last two years of the life of CWM – the money being paid into her two other businesses: property company Mercurio and fashion design company Jody Bell. In addition, she also paid money into her Grant A Wish “charity” and drew a hefty salary.
Paul Clarke – founder of the original CWM company in partnership with Darren Kirby; Clarke left a year later to run AES International Spain, where he scammed more victims out of their life savings with expensive, unnecessary, illegally-sold insurance bonds, and high-risk structured notes – all sold for the fat commissions (despite the even fatter losses suffered by the victims). He also advised two victims to go into Stephen Ward’s Ark scam. Clarke now runs a firm called Roebuck Wealth and has scrubbed the internet of all trace of his history.
Darren Kirby – founder along with Clarke and ultimate controller of the whole CWM operation throughout. Kirby made every attempt to divest himself of all legal responsibility for CWM. He gave away his shares in the company to his business/civil partner Jody Smart, and some of his employees. However, all the defendants (as well as victims) are bound to confirm Darren Kirby was the ultimate boss and controlling mind of the company.
Stephen Ward – owner of Premier Pension Solutions SL. He was the person who signed off all the CWM clients’ pension transfers (for a fat fee). He knowingly condemned all pension holders whose transfers he signed off to inevitable partial or total loss. He was fully aware of CWM’s modus operandi as he himself used a similar investment model to that of CWM (and had taught them how to do it). Ward was routinely investing his own clients’ funds in a toxic, disloyal and irresponsible manner which was as bad – and sometimes even worse – than in the CWM cases.
As soon as I can publish the cross examination transcripts and further directions, I will do so.
This landmark Continental Wealth Management criminal case will inevitably shine a much-needed spotlight on the issue of offshore financial services generally. CWM was just one example (albeit an extreme one) of an international financial services culture which generally disadvantages and/or defrauds consumers. The cause of this culture is a combination of the obsession with the insurance bond cartel: OMI, SEB, Generali, RL360 et al; the total reliance on (hidden) commission; the practice of churning (investing the same sum of money as often as possible to generate as much commission as possible) and the view that the client’s money and interests are secondary to the adviser’s.
CWM victims outside the Denia Criminal Court on 25.2.2020 waiting for Dean Stogsdill and Neil Hathaway to finish being questioned on charges of fraud, disloyal administration and falsification of commercial documents.
Most victims – whether parties to the criminal proceedings or not – are aware of the demise of CWM in September 2017. The company was slowly dying because of the number of victims the CWM scammers had ruined: the word was getting out (which was bad for business) so the victims who shouted loudest were getting paid off. This was having a seriously detrimental effect on CWM’s cashflow.
The financial strain on the business was, however, made even worse by the fact that every last bit of spare cash in the CWM bank account was being used to keep Jody Smart in houses, frilly frocks, shoes and champagne. In 2017, the CWM bank statements show 158,614 EUR was transferred into her Mercurio property company bank account, and 123,400 EUR into her Jody Bell fashion design company bank account. But this was significantly down on the previous year: 386,921 EUR to Mercurio and 164,000 EUR to Jody Bell. The year before, 2015, 124,500 EUR into Mercurio and 39,000.00 into Jody Bell fashion. That’s almost 1 million EUR in two years pocketed by Jody – not counting the money paid into her Grant A Wish “charity” and her generous “salary”.
During the same period, however, the revenue was at least 3,391,876.28 EUR in commissions from insurance bonds and structured notes. On top of this was a substantial amount of extra secret commission from the ultra-high-risk Leonteq structured notes, plus whatever Darren Kirby could con out of victims such as Mark Davison (who subsequently died penniless) and the other claimants pursuing Kirby and CWM through the criminal court in Denia in separate proceedings which pre-date our Pension Life proceedings.
Looking back to the dying days of CWM when cashflow was slowly grinding to a halt as the company was paying out compensation to some of the worst-affected victims (and any remaining cash was being spent by Jody Smart on first-class flights to New York and champagne in five-star hotels – despite her claim to be working 24/7 on her Grant A Wish charity), there was a plan to “reinvent” and re-launch CWM. It eventually dawned on the CWM scammers that they couldn’t scam enough new victims quickly enough to pay out all the existing victims – so the answer was to start afresh with a brand new approach. The new approach was essentially the same as the old approach – except they aimed to sell more “products” and ruin more victims.
The rest is history and CWM collapsed at the end of September 2017 – when all related parties withdrew terms of business. It is worth taking a careful look at the business plan which CWM had been intending to use to re-launch the business. This plan makes it clear that this was an unlicensed, insurance bond sales outfit which intended to continue to operate in contravention of the Spanish insurance regulations. If you read the plan carefully, you will see that CWM operating model was always based on a high-pressure sales target which ignored the interests of the clients (victims).
CWM’s promotion had always been centered around the iniquitous cold call – but in addition the business plan reveals that Jody Smart’s Grant A Wish “charity” events had been used to “harvest” potential victims at scamming sales parties posing as bona fide fundraising efforts.
Read the below CWM “Relaunch Business Plan” carefully and you will see how the scam works. If a victim transfers a £100,000 pension, it will fall in value in the hands of CWM to £91,976,000 by the end of year 1. This means the first year fees would have totalled £4,000 set up fee plus £1,000 annual management fee to CWM; £1,490 QROPS fee; £1,534 to fee OMI. It is interesting that Stogsdill has made the assumption in the plan that all clients will be put into an OMI bond – long before they’ve even met the client and found out if they actually need an insurance bond (which they never do as they are too expensive and lock investors in for up to ten years).
The CWM “plan” shows how a victim’s fund could recover back up to £97,495 if it grows by 6%. But this doesn’t take into account the investment costs of between 5% and 8% – so that was never going to happen. So Dean Stogsdill of CWM – despite all the lessons which should have been learned from years of destroying victims’ funds, still fully intended to keep on doing the same to as many new victims as possible.
Continental Wealth Management Business Plan 2017 (by Dean Stogsdill)
Continental Wealth Management is an independent financial advice firm specialising in wealth management advice to English speaking expatriates throughout Europe – this statement is the key to CWM’s future success.
CWM must focus on expanding our circle of influence and create new business through strategic placement of data gatherers. We must take on the business of “hard targets”, created to allow the best we have to flourish, whilst removing the weaker members of the team by natural selection. This is not a system for solely the sales force, but for all aspects of the team including call centre operators, administration and directors.
CWM will have clear defined roles within the sales force with the addition of achievable, measurable targets on top of generous salaries which is the cornerstone of our payroll ethos. The business will flow from our Partners meaning the business can be closed efficiently and serviced by an experienced adviser who is well trained, knowledgeable and most importantly a “hungry individual”.
There is a simple calculation on £100,000.00:
£100,000 invested over 6 years in capital protected products will provide £6,250.00 in gross revenue.
£100,000 invested over 6 years in a fund yielding 3% per annum growth will provide £10,690 in gross revenue.
BACKGROUND
CWM is a financial services company founded in 2007 on the Costa Blanca. It is a company specialising in pension transfers, portfolio bonds, offshore investments and single premium investments. It is a non-regulated company which is owned and operated by the directors / shareholders and founder Darren Kirby. Recent investors are Timothy Benjamin, and Mark Davison with share capital having been distributed amongst these investors.
Directors
/ Shareholders
Founder
/ Majority Shareholder – Darren Kirby
Chairman
– Neil Hathaway
CEO –
Dean Stogsdill
COO –
Anthony Downs
Key
Personnel
Darren
Kirby – He brings a wealth of experience in
financial services with a keen head for figures and sales techniques.
He has a strong view on the business and how it should be perceived
by the clients, while strengthening our position through strategic
investment decisions along with powerful leadership skills.
Neil
Hathaway – Decades of experience in
insurance and wealth management, he brings a strong personality and
great sales skills with the qualifications to match. He is a
knowledgeable asset to the management of the sales force and uses his
skills to bring through the less experienced members of the team.
Dean Stogsdill – Strong sales record and up to date qualifications – he can sell at the most technical level and has a strong grasp of the investment market, regulation and products. Strong views on company direction.
Anthony Downs – Organised, driven and a sales record to match. He drives through the issuing business and captures all revenues and commissions in the most efficient manner. Anthony is key to the efficient stream of payments required for this business model.
Directors:
Re-structure 2017
Darren
Kirby
The final decision maker as majority shareholder means critical decisions will fall to him. A mandate to find new investors and revenue streams for CWM. An ambassadorial role and a creative thinker for the company, bringing fresh ideas on many aspects of the business both operational and non-operational.
Neil
Hathaway
Key point of contact for the sales force. A remit to push the sales force to meet targets and close business. He will be in control of sales, possible bond lists as well as monitoring the business / LOA levels for each adviser. He will also have a key role in writing new business. This will be a target driven management position. All advisers will report directly to him.
Dean
Stogsdill
Complete oversight of the business operationally with a close working relationship with the Chairman and COO. I will manage the company direction and overall development planning, strategies and high level management with department heads reporting directly to me. I will chair board meetings and deal with technical and regulatory planning. I will also be heavily involved in the efficient management of the investment book.
Anthony
Downs
Full control of new business. A remit to drive through the revenues from written business to maximize the cashflow of the company. Target driven with targets based on company income needs, outstanding requirements and business written.
With the current admin levels and management restructure we should be able to easily handle up to 7 bonds per week, plus client after care, outstanding requirements, investment and re-investment. We do not hire any more administration in 2017. Although this will be adjusted if business levels exceed 7 bonds per week.
We are now a company where you perform, meet your
target or you are replaced.
Of the 9 bond writers, we have 1 in France, 1 in Turkey, 1 in Portugal and the other 6 are in Spain. I believe that we need to build up the business levels so that 9 bond writers can meet a target of 30 bonds per man for the year or an average of 3 a month, based on a 10 month / 40-week year. This would mean a company wide total of 270 bonds, at our target average of €10,000 commission per bond that would mean turnover of 2.7 million plus trail of €300,000 meaning a total of €3,000,000 for 2017.
Call Centres – Cold calling with appointments made and revenue generated through call centres and call centres paid for on performance only.
Market
history:
Historically we have concentrated on cold calling, Grant A Wish (“charity”) events, web videos, website and referrals from existing clients. The cold calling aspect is becoming more and more difficult and time consuming and other areas of marketing ourselves and our products must be found.
Despite the 2017 demise of Continental Wealth Management – run by Darren Kirby and his partner Jody Smart (Bell/Kirby) – former CWM scammers have continued to ply their evil trade. Pension scammers don’t just go away – they join or set up other firms and continue their profitable, illegal work. Just as leopards don’t change their spots, scammers don’t change their modus operandi. They use the same old same old dirty tricks as used by CWM for nearly ten years since the firm was set up by Darren Kirby and Paul Clarke: essentially an illegal insurance bond sales operation – followed up by toxic, high-risk investments paying the highest possible commissions to the scammers. They don’t bother with regulations or qualifications and routinely forge signatures on investment dealing instructions.
The CWM pension scam in Spain must be a lesson to all; phoenixes run by former CWM scammers must be exposed and closed down; firms with only an insurance license must not give illegal investment advice; insurance bonds must no longer be sold illegally in Spain and elsewhere; commissions must not be fraudulently concealed; advisers must be qualified; illegally-run offshore “networks” must be outlawed and disbanded.
Stephen Ward of Premier Pension Solutions S.L., Premier Pension Transfers Ltd., Dorrixo Alliance and Marazion, seems to have given up his scamming operation and is now re-developing his former office in Moraira into a luxury villa with pool. Having ruined thousands of victims with his various pension scams: Ark, Evergreen, Capita Oak, Westminster, London Quantum etc., he then went on to “advise” thousands more victims on the transfer of their DB pensions into the hands of more offshore sharks and scammers. All these victims will have been transferred into QROPS and then put in unnecessary, expensive insurance bonds such as OMI, and then invested in high-risk, high-commission rubbish which will have destroyed substantial amounts of money.
Stephen Ward had his own portfolio of clients as well. He ruined most of these by investing their life savings in high-risk, high-commission funds such as EEA Life Settlements, Axiom Legal Funding, Mansion Student Accommodation, Aria and Blackrock Gold.
Stephen Ward had been issuing all the transfer advice reports for the CWM victims, but then in or around 2015 he was replaced by CWM scammer Martyn Ryan of FCA-registered Global Financial Options who took over from Ward in facilitating the CWM scam which ruined up to 1,000 victims. Ryan now runs Infinity Claims – a claims management company which, ironically, purports to help victims of unsuitable pension transfers (you couldn’t make it up!). Best (or worst) of all, Ryan’s new firm is also FCA regulated. You can quite see how victims get scammed when regulators give the scammers the very tools they need to trick their victims into handing over their life savings.
Another prolific CWM scammer was Phill Pennick. He, like all his colleagues at the unregulated Continental Wealth Management firm on the Costa Blanca, conned hundreds of victims into having their pensions and life savings placed into illegally-sold insurance bonds by OMI, SEB and Generali, and then invested in toxic structured notes provided by Royal Bank of Canada, Commerzbank, Nomura and Leonteq. Victims lost up to 100% of their funds while Pennick and the rest of Kirby’s team of scammers earned fat, concealed commissions from the insurance bonds and structured notes.
Pennick went on to set up his own “IFA” practice – Pennick Blackwell – at two office addresses on the Costa Blanca: Albir and La Nucia. Former mortgage broker Pennick – and his associate Kristoffer Taft (former barman with no qualifications) proceeded to scam more victims and openly commit criminal offences by selling insurance bonds illegally in contravention of the Spanish insurance regulations. In the past few days, the Albir Pennick Blackwell office has closed down and been emptied of all furniture and light bulbs. It is not known whether Pennick (who had also been running an estate agency and a mis-sold mortgage claims management company) is now on the run or whether he has simply done a “phoenix” somewhere else. Certainly, the public should be wary and report any sightings of this serial scammer.
Another phoenix from an ex-CWM scammer is Roebuck Wealth run by Paul Clarke. Clarke was one of the original founders of Continental Wealth Management, along with head scammer Darren Kirby. The pair parted acrimoniously and Clarke went on to promote Stephen Ward’s Ark scam and to build a successful business as an insurance bond and structured note salesmen – committing criminal offences by flogging both sets of products throughout Spain. Earning huge commissions from both bonds and toxic investments with illegally-concealed commissions, Clarke sought out some of his new victims on Facebook – using the name “Bella and Alfie” to hide his real identity.
Openly committing a series of criminal offences by putting clients into bonds and investments which were entirely unsuitable and risky, Clarke concealed his commissions and routinely destroyed his clients’ funds. Interestingly, Clarke seems to have scrubbed the internet of all trace of his firm – Roebuck Wealth – and of himself. Openly prowling the Costa Blanca for more victims in his Aston Martin, Clarke now works closely with the local Masons which provides him with a large stock of further victims to keep him in his champagne lifestyle.
Some of the former CWM scammers managed to get jobs with other financial advisory firms when Continental Wealth Management collapsed in September 2017. Ethical firms who had inadvertently employed these scammers, without realising the extent of their crimes, immediately sacked them when they discovered the truth. One exception to this is the Spectrum IFA Group. This outfit – which purports to be a financial advisory firm – currently employs former CWM scammer Dennis Radford.
However, when warned that they were operating illegally by providing investment advice in Spain and other countries – as well as selling insurance bonds illegally in Spain – Spectrum’s Michael Lodhi refused to sack Radford. Lodhi then went on to attempt to justify the firm’s illegal activities and to defend Radford. Radford had acted as “Senior Partner” at CWM and had been heavily involved in the scamming activities of the firm for some years. The email exchange between Lodhi and me is reported below. This exchange reveals the extent of Spectrum’s illegal activities – in which Radford now plays a key role.
Pension Scammers in Spain – CWM must be a lesson to all.
The Continental Wealth Management scam must be a lesson to all. The public must be made aware of the crimes which have already been committed by the former CWM scammers and must avoid them at all costs in the future. Quite a few of these vile predators are now in the process of being prosecuted and will hopefully serve long jail sentences. But in the meantime, while the Spanish justice process plays out, it is essential that the public should remain vigilant. The scammers are very much alive and active – especially on the Costa Blanca along the eastern coast of Spain (where there is a large concentration of British expats).
RESPONSE BY ANGIE BROOKS OF PENSION LIFE TO LETTER FROM MICHAEL LODHI OF SPECTRUM IFA GROUP
LODHI: We have examined your website and posts and would like to correct some details about our firm that you may have misunderstood.
ME: There is nothing I have misunderstood.
LODHI: Spectrum IFA Group is not a company. It is our brand, a pan-European registered trademark. This is clearly stated on our website and our literature: For Spain “The Spectrum IFA Group” is a registered trademark, exclusive rights to use in Spain granted to: Baskerville Advisers S.L. | CIF B-63/137.020 | Correduría de Seguros; No de registro RDGS J2306.
ME: And this does not authorise Baskerville Advisers S.L. to provide investment advice. Therefore, you are breaking the law by doing so.
LODHI: We provide financial planning services and advice using Insurance based Investment Products (IBIPs) which are both Spanish compliant and tax efficient in Spain.
ME: Your firm is authorised for insurance mediation and this does not cover investment advice. The products to which you are referring are insurance bonds (e.g. OMI, SEB, Generali etc) which are mostly sold illegally in Spain. These companies have facilitated widespread financial crime – including fraud – for many years. This has involved giving terms of business to unregulated firms such as CWM and allowing many millions of pounds’ worth of life savings to be destroyed (by the use of high-risk, high-commission investments).
LODHI: Regulation of these products is covered in the Insurance Distribution Directive. More information is available here: https://ec.europa.eu/info/law/insurance-distribution-directive-2016-97-eu_en Article 2 – Definitions point (17) of DIRECTIVE (EU) 2016/97 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 January 2016 on insurance distribution (recast) page 30 states: ‘insurance-based investment product’ means an insurance product which offers a maturity or surrender value and where that maturity or surrender value is wholly or partially exposed, directly or indirectly, to market fluctuations The appropriate regulator in Spain for such IBIPs is the DGSFP.
ME: The DGS does not regulate the products themselves – it regulates the way the products are sold (mediated). And most advisory firms in Spain do this illegally (in contravention of the DGS regulations). Also, the Spanish Supreme Court has deemed life assurance policies (such as OMI bonds) to be invalid for the purposes of holding investments.
LODHI: For your information another of our group companies is a licensed investment advisory firm (Mifid) however this licence is not required for our current activity in Spain.
ME: Which company? You are clearly giving investment advice, so how is your organisation authorised to do this – particularly in Spain?
LODHI: Our consultants are trained in accordance with Spanish rules laid down by our regulator, the DGSFP.
ME: I think you have to be clear what your “consultants” do. Are they advisers or just bond salesmen? If the Spanish rules say that consultants (or salesmen or advisers) don’t have to be qualified, then you are right. Most of your salesmen have no qualifications (although some of them do lie about being qualified). The only ones with verifiable qualifications are Robin Beven, John Hayward, Chris Burke and Jonathan Goodman (as far as I can see). Perhaps you can update me on this so I can republish this blog with the latest information: https://pension-life.com/spectrum-ifa-group-qualified-and-registered/
LODHI: All of our financial planning advice is produced and signed off centrally via our technical and compliance department.
AB: That’s a funny sort of “compliance” department if it signs off investment advice which is not licensed. Perhaps you ought to sack all your compliance people since they clearly don’t understand that a firm cannot give investment advice (which many of your salesmen clearly claim to do on your own website) without being licensed to do so.
LODHI: In addition, our pension transfer advice (TVAS reports) are also provided centrally by a Fellow of the Chartered Insurance Institute who holds all the up to date UK pensions qualifications.
ME: Which one of your staff is this?
LODHI: Where appropriate, further pensions transfer advice is provided by an FCA authorised pension transfer specialist who holds all current UK pension advice permissions.
AB: Who? (as in – who is the allegedly FCA-authorised pension transfer specialist providing transfer advice to Spectrum?)
LODHI: It is not a requirement in Spain that our consultants hold UK financial planning qualifications, however many do hold these. For example John Hayward holds the following UK qualifications: Chartered Insurance Institute Financial Planning Certificate (3 parts 1. Financial Services and their regulation 2. Protection, savings and investment products 3. Identifying and satisfying client needs.) Chartered Insurance Institute G60 Pensions Institute of Financial Services Certificate in Mortgage Advice and Practice
AB: And hereby lies the problem, of course. Offshore firms such as yours concentrate on the expat market – which involves UK pensions. So of course a genuinely ethical and professional firm would ensure that advisers hold the relevant UK qualifications. This is one of the reasons why so many British firms offshore cause victims’ losses – because the advisers are not qualified and only know how to be salesmen targeting maximum commissions rather than giving proper independent financial advice.
LODHI: Dennis (Radford) approached us whilst working with Continental Wealth Management (CWM) part of the Trafalgar International Gmbh network. He was neither an owner nor a Director of that firm.
AB: Radford was a “Senior Partner” (of Continental Wealth Management) – although neither a shareholder nor a director. His title must have told you that he had held a senior position within the firm. This should have given you a clue that he was an integral part of this scam.
LODHI: Having worked with CWM for some time he realised that the products sold inside life assurance policies were not in his client’s best interests.
AB: It would be interesting to know how many minutes he took to realise this. He could easily have checked to see how insurance products are supposed to be sold – and had he done this he would have realised immediately that ALL the life bonds (OMI, SEB and Generali) were being sold illegally by CWM. With the structured notes, all the term sheets clearly bore the words: “for professional investors only” and “risk of loss of part or all of your capital”. So he should have stopped immediately. But as you have confirmed, Radford continued selling these products “for some time”. Perhaps you would be kind enough to disclose exactly how many people Radford scammed out of their life savings during the time he was “Senior Partner” at CWM?
LODHI: After investigating our working methods and procedures Dennis applied to join our firm.
AB: It was at this point that you should have told Radford in no uncertain terms that under no circumstances would you take on a bond salesman who had been working for a firm of scammers. But clearly you welcomed him with open arms.
LODHI: His main request was that we assist him with his existing clients by moving them (where possible) into funds from Spectrum’s approved fund list – EU compliant, daily traded, from household name fund managers, without initial fees, initial commissions or exit penalties.
AB: But that would have involved giving investment advice – and Spectrum was not licensed to give investment advice.
LODHI: Dennis continues to assist his clients transferred to Spectrum from CWM along with other clients from other IFA firms with similar issues around QROPS and Fund selection inside IBIPs.
AB: Again, this involves investment advice. Radford is not qualified to do this, and Spectrum (or Baskerville) is not authorised to do this.
LODHI: We understand you are trying to help expatriates in Spain who may have been subject to mis- selling by IFAs.
AB: Correct. We are taking criminal action against the directors and shareholders of CWM for the fraud and disloyal administration (a criminal offence in Spain) committed by the director and shareholders of the company. Now that it has become clear that Radford held a senior position of responsibility and authority in the company, I will be taking legal advice as to whether he should be added to the list of defendants.
LODHI: It is important for your business’ credibility that your posts are factually correct.
AB: My posts are factually correct. But this isn’t about my business; it is about your business – and your credibility. And you are employing unqualified “advisers” and are giving unauthorised investment advice – along with employing Radford – a known ex-CWM scammer. Most decent, ethical firms immediately sack scammers when they realise their provenance and it is disappointing that you have not taken such proactive action and are still harbouring him.
LODHI: Several posts on your site imply that our firm is carrying out an activity that is illegal.
AB: Correct. You are giving investment advice without being authorised to do so. Further, the way your firm is selling insurance bonds is illegal. I don’t know what the Spanish regulations say about employing ex scammers – perhaps you could enlighten me?
LODHI: This is clearly not the case.
AB: It is, indeed, clearly the case.
LODHI: We ask that you remove these posts immediately in order that we avoid having to take action.
AB: Hopefully, the action you will take will be to sack Dennis Radford without further prevarication.I will be happy to update the qualifications on the post about your staff if you provide me with links to evidence on each one.
LODHI: Like you, we have tried to assist people who have been subject to bad advice in Spain and we continue to do so.
AB: If this is true, it is such a shame that you have employed one of the very people who was giving “bad” advice and who had been a “Senior Partner” at CWM – the very firm which scammed 1,000 victims out of their life savings.
LODHI: We understand that financial services regulation within the EU is complex.
AB: It is not complex at all. In Spain you have to comply with Spanish regulations – irrespective of where or how you are regulated.
LODHI: We are ready to assist you in understanding the facts and procedures should this be of use to you.
AB: If I ever find myself in a position where I feel I require assistance from a firm which is employing a known scammer and is providing investment advice without being authorised to do so, you will be the first to know.(However, I wouldn’t hold my breath if I were you).
LODHI: Brexit. Be aware that in the event the UK leaves the EU without a deal or with Mr Johnson’s current deal, then, as it stands, IFAs licensed and regulated in the UK or Gibraltar will be unable to advise or service clients from the date of leaving. A Spanish licensed brokerage like ours will have no such issues.
AB: Brexit or no Brexit, your firm is not licensed to provide investment advice. Further, it is obliged to conform to Spanish regulations. That will not change.
LODHI: We look forward to hearing that your erroneous posts have been removed.
AB: There are no erroneous posts – unless you would care to help me update the qualifications on last year’s post?
Clearly, Lodhi is happy to continue to employ one of the CWM pension scammers. He has no intention of learning any lessons and the public must be extremely wary of Spectrum IFA Group as it is breaking the law in Spain.
TPR has been neither coy nor shy in its published determination against Ward and Salih – and has openly called the London Quantum pension scheme, and the risky investments which Ward made, a “scam”.
But to any reasonable person’s mind, tPR’s determination in relation to Ward and London Quantum raises more questions than it answers. In fact, I would go even further and say that HMRC’s and tPR’s incompetence – as well as Dalriada Trustees‘ own failings – should be examined in parallel with Ward’s multiple frauds.
Because, make no mistake, London Quantum was only one of many.
It all started long before the Ark Pensions scam. Ward set out his stall transferring pensions to New Zealand and liberating 100% “tax free”. He boasted in the local Costa Blanca press that he had “helped” thousands of clients liberate their pensions (legally). Of course, this may have been free of tax in New Zealand, but when the Spanish tax authorities catch up with these clients, there will be a very expensive disaster.
It is extremely worrying that IVCM – a “phoenix” of the Brooklands disaster – is also offering the same New Zealand liberation facility today. It always worries me when firms fail to learn the lessons of past scams and expose unsuspecting victims to the same catastrophes that past scammers orchestrated. Add to this the fact that IVCM is regulated out of Gibraltar – the jurisdiction of choice for scammers such as XXXX XXXX and STM Fidecs – and I think it is well worth giving IVCM a very wide berth.
Prior to 2010, Ward was a tied agent of Inter Alliance – a company based in Cyprus which had an insurance license. For Inter Alliance in Cyprus, Ward successfully created the illusion that this gave his company Premier Pension Solutions some sort of license. But, in reality, it did not – as the Cyprus license was only for Inter Alliance and not for any other entity. Plus tied agents were (and still are) illegal in Spain.
As a sideline, Ward was flogging EEA Life Settlements as he had discovered the delights of making huge commissions out of dodgy, risky, illiquid investments to his unsuspecting victims. In 2010, Ward was working closely with Concept Trustees in Guernsey – run by Roger Berry. Initially happy to see Concept Trustees’ QROPS members have 100% of their pensions invested by Ward in EEA, Berry eventually realised that Ward’s firm was not regulated as it had been dumped by Inter Alliance. Of course, even before it had been dumped, Premier Pension Solutions wasn’t regulated anyway. But Concept Trustees was too stupid to realise that.
Concept then wrote to all the members who were clients of Ward’s Premier Pension Solutions and warned them that Ward’s firm was neither regulated nor had any professional indemnity insurance cover. Berry claimed he would not be accepting any further investment instructions from Ward, but this was basically just a load of hot air (aka lying) as he continued to accept investment instructions into EEA by Ward.
In September 2010, Premier Pension Solutions was appointed as a tied agent of AES International – a firm based in London and Dubai. The agency agreement covered PPS for investment and insurance business – but not pension transfer business. Ward’s PPS letterheaded paper claimed that it was a “partner” of AES and that it was regulated by the DGS (Spanish insurance regulator) and CNMV (Spanish investment regulator). PPS also became a member of FEIFA – the Federation of European Independent Financial Advisers (although he was later dumped by them). You can understand why so many victims thought that PPS was a bona fide advisory firm.
Then came the first of Ward’s major pension scams: Ark. It is worth looking at the history of Ark because this sets the scene for how nearly 500 victims came to lose their pensions and face tax liabilities – as well as the dozens of further scams operated by Ward (including London Quantum).
A famous footballer and his mate – a football club owner – bought a plot of land in Larnaca in Cyprus with a view to turning it into a golf resort. They paid £1.1 million for the property, but then realised it wasn’t big enough for a whole golf course (neither of them was bright enough to be able to count up to 18) and so they tried to find some other investors. The chumps they tried to con into buying more land adjacent to the original plot either couldn’t come up with the money or were frightened off such a high-risk, illiquid investment.
So the sporty pair went to see the footballer’s accountant – Andrew Isles of Isles and Storer (now owned by LB Group). Isles soothed the sporty pair’s worries by telling them that securing more investors was simple: just start a pension fund! He introduced them to what he called “two leading pension experts”: Craig Tweedley and Stephen Ward. Tweedley was already operating the KJK Investments/G Loans pension liberation scam (later to be placed in the hands of Dalriada Trustees by the Pensions Regulator) and Ward was a highly-qualified pensions expert, examiner and author.
The rest is history as nearly 500 victims lost their pensions to the Ark scam. But the sporty pair did very nicely – they sold the land in Cyprus to the Ark scheme for £4 million and pocketed the profit. The footballer tried to hide the money in Dubai but got caught and turned Queens Evidence. He and the other original investor (the football club owner) fell out and they ended up in court against each other – with the footballer triumphing. Andrew Isles also did very nicely as he sold introductions to a number of his clients and earned fat commissions in doing so.
As Ark unfolded – between mid 2010 and mid 2011 – Ward initially acted as an introducer. There were various introducers – many recruited by Ward when he ran a series of seminars in various parts of the UK. But Ward himself was the biggest introducer – accounting for more than a third of the whole £27 million fund and earning approaching three quarters of a million pounds in fees (the Pensions Regulator’s report of £350k was way off the mark).
Ward and his sidekick – bent lawyer Alan Fowler of Stevens and Bolton Solicitors – acted as the controlling minds behind Ark. The scheme documentation and the “loan” contracts were drawn up and explained by Ward and Fowler. Of the 5% commission charged by Craig Tweedley, Ward got at least 2% plus a transfer fee. But Ward had his eye on a much bigger proportion of the fees. Towards the end of the life of Ark, Ward was preparing to take Ark over from Tweedley – along with an associate of his: Peter Moat (another pension crook who went on to operate the Fast Pensions scam – now also in the hands of Dalriada Trustees). In a way, it was a shame that didn’t happen, as Tweedley did at least try to help the Ark victims, whereas Ward never lifted a finger. In fact, he simply told the Ark victims to throw the tax demands away as “HMRC would never pursue them”.
In February 2011, HMRC met with Tweedley and Ward to discuss the “loans” – so HMRC knew perfectly well that Ward was the main brain behind the scam. It is, therefore, astonishing that they did nothing to stop him operating so many further pension scams.
Ark came to a shuddering halt on 31st May 2011, when tPR appointed Dalriada Trustees and the scheme was suspended. Dalriada went up to Yorkshire to confront Crag Tweedley and relieve him of all the evidence and files relating to the scam. Tweedley told Dalriada that all the records were held down at Ward’s Manchester office at 31, Memorial Road and he drove down to collect them from Anthony Salih. He arrived to find Salih removing all the Premier Pension Solutions fee agreements on the instructions of Ward (he managed to shred most of them – but did missed a few which I now have).
After Ark, Ward went on to run the Evergreen Retirement Benefits QROPS scam with accompanying 50% “loans” and a further 300 victims lost £10 million worth of pensions. HMRC removed Evergreen from the QROPS list when they realised it was a liberation scam and Ward fell back on two more UK-based, bogus occupational schemes: Southlands and Headforte. Plus, he registered a number of new schemes – including Capita Oak.
The Capita Oak scheme was another bogus occupational scheme registered by Ward with a fictitious sponsoring employer: RP Medplant (Cyprus). There is, however, a firm called RP Med Plant in Cyprus. The Capita Oak trust deed was written by Ward’s bent lawyer Alan Fowler. Ward took responsibility for the transfer administration – transferring valuable personal and final salary occupational pensions into this scam – in the full knowledge that he was condemning hundreds of victims to certain financial ruin and poverty in retirement. Capita Oak is now also in the hands of Dalriada Trustees.
Other pension scams that Ward was operating – in addition to Southlands and Headforte – from 2012 onwards included Feldspar, Hammerley, Meribel, Halkin, Randwick, Bollington Wood and Westminster. And, of course, Dorrixo Alliance which was the trustee for many of these scams. Capita Oak and Westminster are both under investigation by the Serious Fraud Office.
How much more evidence do they need?
In May 2014, HMRC was given evidence of all of Ward’s various scams – including Dorrixo Alliance. They were also given detailed testimony by me and a number of victims of what Ward had been up to in the pension liberation fraud industry since Ark. It would have been very easy for HMRC to look up to see what other pension schemes Dorrixo was trustee to. Had they done this, they would have seen that Dorrixo was the trustee for the London Quantum scheme. If HMRC had taken any action, they could have prevented Mr. N – a serving police officer – and 96 other victims from losing their pensions to Ward and his various dodgy, inappropriate investments (including loans to Dolphin Trust).
If we add to the above catalogue of scams the Continental Wealth Management scam – 1,000 victims facing the loss of £100 million worth of life savings – Ward has been responsible for the destruction of thousands of people’s pensions this past eight years. Plus several suicides and deaths from stress-related medical conditions.
SERIOUS QUESTIONS ARISING FROM THE PENSIONS REGULATOR’S DETERMINATION RE:
Mr Stephen Alexander Ward – The Pensions Regulator case ref: C46205159
Ward was a director of Dorrixo from 13 October 2011 to 28 April 2015. A company called Quantum Investment Management Solutions LLP (“QIMS”) has at all material times been the sole sponsoring employer of the Scheme. Dorrixo became the sole trustee of the Scheme on 19 April 2014. Dorrixo is also recorded as being the Scheme administrator.
HMRC AND TPR WERE GIVEN EVIDENCE OF WARD’S COMPANY, DORRIXO, IN MAY 2014. THEY WERE ALSO GIVEN EVIDENCE OF A LARGE NUMBER OF SCAMS WARD OPERATED AFTER ARK – ALL INVOLVING LIBERATION FRAUD. WHY WASN’T ACTION TAKEN TO PREVENT LONDON QUANTUM? ALL 97 VICTIMS – INCLUDING A SERVING POLICE OFFICER – COULD HAVE BEEN PREVENTED.
On 18 June 2015 the Regulator appointed Dalriada Trustees Limited (“Dalriada”) as an independent trustee to the Scheme, with exclusive powers.
HAS ONE SINGLE PENNY EVER BEEN RETURNED TO ANY OF THE PENSION SCAMS PLACED IN THE HANDS OF DALRIADA TRUSTEES? THERE ARE DOZENS OF THEM, AND FEW – IF ANY – OTHER INDEPENDENT TRUSTEES ARE EVER APPOINTED BY TPR. BUT THERE SEEMS TO BE NO RECORD OF ONE SINGLE MEMBER EVER GETTING ANY RETURN FROM ANY OF THE SCHEMES IN THE PAST EIGHT YEARS – DESPITE THE MANY MILLIONS DALRIADA HAVE PAID THEMSELVES FROM THESE SCHEMES.
Following its appointment Dalriada discovered that there were approximately 609 files on record relating to potential new members, each at various stages of progression towards becoming a new member.
AS THIS EVIDENCES THAT THIS SCAM COULD EASILY HAVE DWARFED ARK IN A VERY SHORT SPACE OF TIME, DON’T HMRC AND TPR RECOGNISE THAT THEIR LAZINESS AND NEGLIGENCE NEED TO BE ADDRESSED? THEY LEARNED NOTHING FROM ARK – AND WHILE THERE ARE VALID CRITICISMS OF WARD FOR HAVING LEARNED NOTHING, HE IS JUST A COMMON SPIV WHILE HMRC AND TPR ARE SUPPOSED TO BE GOVERNMENT DEPARTMENTS WITH A RESPONSIBILITY TO PROTECT THE PUBLIC. THE SCALE OF THIS SCAM SHOWS THESE TWO ORGANISATIONS ARE NOTHING BUT HOPELESSLY INEPT AND AMATEURISH IN THEIR APPROACH TO DILIGENCE AND PUBLIC RESPONSIBILITY.
The Scheme was promoted to potential new members by introducers. These included the following entities: GoBMV; Baird Dunbar; What Partnership; the Resort Group PLC; Friendly Investments; Premier Mark Consultants and Quantum Wealth Management Solutions Limited.
THE DANGERS OF THE SCOURGE OF “INTRODUCERS” SHOULD HAVE BEEN LEARNED FROM THE ARK SCAM IN 2011. WARD RECRUITED DOZENS OF THEM ALL OVER THE COUNTRY. AND YET NONE OF THEM HAS EVER BEEN BROUGHT TO JUSTICE FOR THEIR PART IN ARK, AND HAVE GONE ON TO OPERATE AS INTRODUCERS AND EVEN HOLD KEY CENTRAL ROLES IN LATER SCAMS. THIS INCLUDES FRIENDLY INVESTMENTS AND JULIAN HANSON – WHOSE SCHEMES ARE NOW ALSO IN THE HANDS OF DALRIADA TRUSTEES.
Gerard was responsible for producing template risk letters, member application forms, pro forma declarations stating that the person signing them was a self-certified sophisticated investor, member booklets and the statement of investment principles (of which there were four versions). Gerard sent these documents to members once they had been introduced to the Scheme by an introducer.
GERARD ASSOCIATES, RUN BY GARY BARLOW, HAD ACTED AS AN INTRODUCER TO WARD IN THE ARK SCAM. AND YET HE WAS LEFT FREE TO OPERATE IN THE SAME CAPACITY IN THE LONDON QUANTUM SCAM – AND EVEN TAKE ON A MORE CENTRAL ROLE. GERARD ASSOCIATES WAS AT THE TIME AN FCA-REGULATED FIRM – AND REMAINS SO TO THIS DAY. THE FCA HAS TAKEN NO ACTION TO REMOVE THIS FIRM OR TAKE ANY ACTION AGAINST GARY BARLOW.
GERARD ASSOCIATES’ GARY BARLOW WAS PAID £253,000 FROM THE LONDON QUANTUM SCHEME FOR DEFRAUDING VICTIMS INTO SIGNING AGREEMENTS THAT THEY WERE “SOPHISTICATED” INVESTORS. SO WHY HASN’T BARLOW BEEN PROSECUTED AND JAILED – AND MADE TO PAY THIS MONEY BACK TO THE VICTIMS?
A material number of the new members had a low or medium appetite for investment risk and, in any event, were unaware that the Scheme’s investments were high-risk investments. The Panel was troubled by the apparent disconnect between members’ appetite for risk and the high risk nature of the investments made by Dorrixo. Mr Ward accepted that the Scheme’s investments were high risk, but claimed this was made clear to new members in the Member Booklet.
I DON’T KNOW WHAT SORT OF DRUNKEN DUMMIES MADE UP TPR’S “PANEL”, BUT DID THEY SERIOUSLY THINK THAT ANY PENSION FUNDS SHOULD EVER INVEST IN HIGH-RISK CRAP? INDIVIDUAL MEMBERS’ APPETITE FOR INVESTMENT RISK IS IRRELEVANT – THIS WAS A PENSION FUND, NOT A CASINO.
The case against Ward was based on failures of competence and capability, and also a lack of honesty and integrity as well as Ward’s involvement with “pension liberation” as an introducer of members to the “Ark” schemes.
BUT TPR AND HMRC KNEW ALL ABOUT THIS BACK IN 2010 AND 2011. WHY DID THEY DO NOTHING TO PREVENT WARD FROM SCAMMING MORE VICTIMS OUT OF MORE MILLIONS OF POUNDS. THEY STOOD BACK AND WATCHED – DESPITE HAVING HARD EVIDENCE THAT HE WAS STILL UP TO HIS CRIMINAL MISCHIEF.
Mr Ward did not dispute that a company of his (Premier Pensions Solutions SL) was involved in introducing members to the Ark Schemes, but states that the relevant activity pre-dated any finding by the courts of pensions liberation and that Mr Ward had no knowledge that the schemes were being used for such activity.
BUT HMRC, TPR AND DALRIADA ALL KNOW THIS ISN’T TRUE. THEY HAVE ALL SEEN EVIDENCE THAT WARD AND HIS BENT LAWYER ALAN FOWLER ACTUALLY PRODUCED THE “LOAN” (MPVA) DOCUMENTATION AND EXPLAINED THE LOANS IN SOME CONSIDERABLE DETAIL TO THE VICTIMS. THE MPVA CONTRACTS WERE DRAWN UP BY FOWLER. IS IT REALLY CREDIBLE THAT NEITHER HMRC NOR TPR WOULD HAVE OBJECTED TO THIS STATEMENT?
The Panel did not consider there was sufficient evidence of Ward having actual knowledge of, or turning a blind eye to, the illegal nature of the activity of the Ark Schemes when carrying out his role as introducer before.
SERIOUSLY? I HAVE GIVEN EVIDENCE OF THIS TO BOTH HMRC AND TPR ON MANY OCCASIONS. THIS HAS BEEN DISCUSSED AT MEETINGS WITH DALRIADA TRUSTEES ON MANY OCCASIONS. EVIDENCE OF THIS HAS BEEN GIVEN TO THE SERIOUS FRAUD OFFICE ON MANY OCCASIONS BY VARIOUS VICTIMS AND ME. WHAT FURTHER EVIDENCE DID THE PANEL WANT? EVERY ARK MEMBER’S FILE WAS FULL OF SUCH EVIDENCE. EITHER TPR IS LYING OR IT IS INCOMPETENT. OR BOTH.
The Case Team also relied on certain alleged failures in relation to other pension schemes (called Headforte and Halkin), of which Mr Ward was a trustee. These are denied by him (e.g. an allegation of failure to appoint an auditor to those schemes) and the Panel did not consider it necessary to make findings in respect of them.
SO WHAT ACTION HAS TPR TAKEN IN RELATION TO HEADFORTE AND HALKIN? BOTH WERE BEING USED FOR PENSION LIBERATION FRAUD BY WARD – AND YET THE VICTIMS PROBABLY STILL HAVE NO IDEA WHAT HAS HAPPENED TO THEIR MONEY. IT IS ABSOLUTELY ASTONISHING THAT NO ACTION HAS BEEN TAKEN IN RELATION TO THESE TWO SCHEMES, PLUS ALL THE OTHERS WARD HAS BEEN OPERATING OVER THE YEARS.
Stephen Alexander Ward (date of birth 11 July 1955) is hereby prohibited from being a trustee of trust schemes in general. This order has the effect of removing the above-named individual from all or any schemes of which he is a trustee. By section 6 of the Pensions Act 1995, any person who purports to act as a trustee of a trust scheme whilst prohibited under section 3 is guilty of an offence and liable (a) on summary conviction to a fine not exceeding the statutory maximum, and (b) on conviction on indictment to a fine or imprisonment or both.
SO, WARD CAN STILL OPERATE AS A PENSIONS ADMINISTRATOR? CAN STILL DO PENSION TRANSFERS? HE IS BASICALLY FREE TO CARRY ON AS BEFORE. THIS MAKES HMRC AND TPR COMPLICIT IN WARD’S MANY CRIMES.
THIS IS NOT JUST THE DEATH OF TRUST, BUT OF ANY CONFIDENCE IN THE GOVERNMENT, REGULATORS AND CRIME PREVENTION AGENCIES TO PREVENT OR DEAL WITH PENSION SCAMS AND SCAMMERS.
Pension and investment scams and scandals are a blight on financial services and saving for retirement. The energetic and inspired campaign by Darren Cooke of Red Circle successfully raised awareness of the problems of cold calling. But the snap general election scuppered serious traction on this and the most the government has achieved so far is to make a vague promise to talk about talking about it. But still it is not illegal, and still the scammers are scamming away merrily.
Chair of The Transparency Task Force
The Scams and Scandals team was formed as a result of inspiration by the Transparency Task Force’s Andy Agathangelou. It has attracted a group of like-minded professionals who believe passionately that a concerted effort should go into coordinating a zero-tolerance approach to scams and scandals. All members of the team are committed to producing a White Paper which can focus the minds of government ministers, regulators and law enforcement agencies on the whole problem – not just the cold calling bit.
Irrespective of which version of which political party we are talking about, the ultimate object of a successful and fulfilled life is to be happy, healthy and solvent. And this includes getting a decent education, leading a responsible and law-abiding life, and saving for a comfortable retirement. Millions of British citizens manage to achieve this goal, but sadly many thousands of them lose part of all of their retirement savings to the armies of scammers.
XXXX XXXX, one of the many pension scammers ruining thousands of victims’ lives
All these scams and scammers have caused thousands of victims to lose hundreds of millions of pounds’ worth of retirement savings. And caused untold misery – in many cases exacerbated by HMRC punishing the victims rather than the perpetrators.
The Scams and Scandals Team has a clear five-point goal:
Ban UK cold calling and fraudulent calling
We must not let this disappear off the agenda and must keep up pressure on MPs and Ministers – as well as the regulators. But this must also be extended to overseas as we already know that the UK-based cold calling outfits have made arrangements to move their operations or merely facilitate re-routing of phone numbers. However, the twilight industry of “introducing” must also be examined as this is a serious source of scam facilitation.
Support Lesley Titcomb “Scammers are Criminals”
Ms Titcomb has publicly declared scammers to be criminals
We must work with the regulators, government and law enforcement agencies to enhance existing and introduce new regulation and legislation to prevent new scams, close down known existing scams and bring those involved in conceiving, operating and promoting both to account.
Revitalise Scorpion Campaign
Fundamental to preventing scams is communication to the public of the dangers of cold calls and pension/investment scams which would include the Scorpion Campaign – but so much more as well. A key part of this exercise is the use of social media and the plan to produce a documentary and Youtube channel giving real-life examples of past and current scams. Explaining the mechanics of a scam is one thing – but showing an actual example of a victim and the scammer is bound to have even greater impact.
Write off HMRC debt where scams are proven
HMRC celebrating the tax they collect from victims of pension liberation fraud
We need the help of the government here and could do with an actuary to help us work out what the cost to the State is of taxing victims of scams. If we can demonstrate that by ruining a scam victim (who has already probably lost part or all of his pension) with the tax charge, the long-term cost of supporting the victim and his family will far outstrip the tax collected. This is especially well demonstrated in the Ark case where the victims have got to both repay the “loans” and pay the 55% tax even if the loans are repaid.
Ensure AML regs include pension scamming
TOBY WHITTAKER’S TOXIC EMPIRE WILL FINALLY BE HUFFED AND PUFFED AWAY
I would widen this to include investment scams. This is because at the heart of every pension scam there is a fraudulent investment (and/or loan). The actual pension itself is harmless as it is essentially just a box with a label on it and only becomes toxic and dangerous once you put the scorpions, snakes and cockroaches inside it. You could equally put fluffy kittens in it. It is the mis-use of the pension “box” which is the scam.
London Quantum is a pension scheme whose trustee was a firm called Dorrixo Alliance run by our old friend Stephen Ward. That name will, of course, send a chill down the spines of many pension scam victims. Since 2010, Ward had been involved – either at the top or the bottom of the pond – in numerous pension scams. He eventually decided to “go straight” and declared that Ark was history – although Ark was far from history for his hundreds of victims who are now facing financial ruin.
Ward’s version of “going straight” was London Quantum. He had learned from the Capita Oak and Westminster scams that the value in getting involved in a pension scam comes from the investment introduction commissions. So he set about building a portfolio for the London Quantum victims which was based purely on how much wonga he could earn – rather than what was right, prudent and appropriate for an occupational pension scheme.
So what were the investments and why weren’t they right for a pension scheme?
The Scheme purchased shares in a unitised currency investment fund which traded in the top ten major currencies. The fund was regulated by the Central Bank of Ireland.
The fund was regulated but according to a regulated investment advisor the fund was inappropriate in terms of risk for the Scheme.
The fund prospectus did not specify a predicted rate of capital growth. However the scheme sponsor had previously stated a predicted return of 12%-15% per annum – an astonishing amount by any stands. But in practice, the fund performed poorly and fell over the period of the investment.
Dalriada Trustees (who replaced Stephen Ward’s Dorrixo Alliance and was appointed by the Pensions Regulator) received advice that, due to the high-risk nature of the fund and, notwithstanding the fall in the value of the investment, the Trustee should exit the fund at the earliest opportunity – irrespective of potentially heavy losses.
In 2014/15, the Scheme purchased nine corporate loan notes. Dolphin specialise in the purchasing of derelict and listed German property. The property is then sold off plan to German investors who take advantage of a specific German tax relief which allows for the recovery of renovation costs through tax allowances when purchasing units within a listed building.
The corporate loan notes were for a period of 5 years with no early exit options. The loans were due to be repaid at various dates between 9 October 2019 to 27 April 2020 depending on when the loans were made.
The loan notes had varied rates of return ranging from 12% to 13.8% per annum. All interest is rolled forward and paid at the end of the 5 year period.
This is an unregulated investment and is high risk in nature. There is no guarantee that the capital and interest will be fully repaid at the end of the relevant 5 year period. Dalriada had received advice that the investment is illiquid and inappropriate for the Scheme and early exit is recommended.
London Quantum One Limited
The Scheme had purchased shares in London Quantum One Limited (“LQOL”). LQOL holds rights to a social media application called VIP Greetings which provides personalised messages with the use of celebrity endorsement. The original trustees paid for the LQOL shares from the scheme funds.
The underlying investment in VIP Greetings was long term and no returns were expected for several years. No early exit options exist and there is no evidence of a secondary market to sell the investment.
The returns from VIP Greeting application are highly speculative. These is no guaranteed minimum return or definitive payment date. Investors hold no security over any physical asset.
A number of valuations in relation to the VIP Greetings investment were received prior to the appointment of Dalriada Trustees. The valuations appeared highly speculative. In addition, the valuations were not made at the time that the Scheme purchased the investment.
Dalriada suspects that the investment holds little, or more likely, no value. They are not confident that any return will be made to the Scheme.
Between 2014 and 2015 the Scheme purportedly invested in 17 car parking spaces in a car park near Glasgow Airport. The investment was offered by Park First Glasgow Limited who lease parking spaces to investors, in this case the London Quantum, and then sub lease the parking space back.
The investor enters a lease for a period of 175 years (the maximum allowed under Scottish law). The parking spaces are then sub-leased back for a period of 6 years. The sub-leases can be terminated by Park First after 2 or 4 years, or at any time with not less than 10 days notice if it has found a substitute sub-tenant.
There is a ‘guaranteed buy back’ policy which outlines under what circumstance Park First will buy back the parking spaces. Park First has full discretion in this regard and is under no obligation to buy back the spaces at any point. In short, there is no guaranteed exit option.
The investment offers a guaranteed rate of return of 8% per annum for the first 2 years. To date payment in line with the 8% return had been received. £27,200 was received in February 2015 and a further £27,200 was received in February 2016. No payment was received for February 2017.
This is an unregulated investment. Park First operate the car parking space on behalf of the investor for an annual fee. The parking spaces generate income which is ultimately passed back to the investor each year.
Dalriada received advice that the investment was illiquid and inappropriate for the Scheme and early exit was recommended.
Dalriada have tried to recover the monies paid to Park First arguing that the legal documentation was never fully completed by the previous trustee and that the contracts were ineffective. Park First has rejected this request and is insisting that the contracts are valid and that there is no scope for Dalriada to be refunded.
On 20 August 2013 the Scheme invested in an unsecured loan note issued by the law firm Malletts Solicitors Limited.
The loan note had an investment period of 6 years with an obligation for the note holder to redeem 25% of the note per annum after year 2. No early exit options existed.
The loan note purported to return 8% per annum payable half yearly.
Interest or redemption payment have not been made by Mallets. To date the Scheme should have received payments totalling £3,280.00 as per the contractual documentation.
Loan notes have been issued by Mallets in an attempt to raise funding for an internal ‘legal hub’ project. The loan note was unsecured.
Dalriada contacted Malletts to obtain additional information in relation to the investment. Mallets have refused to explain how the Scheme came to be invested with them and have only provided minimum details
Dalriada had received advice that the investment is illiquid and inappropriate for the Scheme and early exit is recommended. They sent Malletts a number of formal requests to exit the investment however Malletts did not respond.
Malletts Solicitors Limited went in liquidation on 11 November 2016. Dalriada submitted a proof of debt respect of the loan note but the fact it has gone into liquidation suggests prospects of recovery are poor.
On 31 January 2015 the Scheme invested in a corporate bond with Colonial Capital Group Plc. Colonial operates in the distressed US social housing market and have issued a number of bonds.
The corporate bond is for a period of 3 years. No early exit options exist. The bond has a fixed return of 12% per annum. Interest will be rolled forward and paid at the end of the 3 year investment period.
This is an unregulated investment. Dalriada has received advice that the investment is illiquid and inappropriate for the Scheme and early exit is recommended.
Dalriada sent Colonial a formal request to exit the investment. Colonial responded and confirmed that an early exit was not available as Colonial may only redeem all or part of the bonds on a pro rata basis for all investors. It would therefore not be possible to facilitate an early exit for the Scheme.
Colonial Capital Group Plc was then placed into administration on 8 March 2017. Dalriada has issued a proof of debt in relation to the corporate bond but, again, the fact the company has gone into administration suggests prospects of recovery are unpromising.
The investment is in hotel rooms in a hotel development by The Resort Group. The hotel has recently been completed in Cape Verde and investors purchase a right to benefit from the profits and interests of specific pieces of the development. Investors do not own the land nor do they have a charge over it. An investor has simply a right to share in any profit generated from the hotel rooms.
The investment could not be exited prior to completion of the hotel rooms. Now that these have been completed they can be sold on the secondary market.
Before completion of the hotel rooms a guaranteed return is paid. After completion the return is based on room occupancy. The expected returns have been paid to the Scheme.
This is an unregulated investment. Dalriada has received advice that the investment is illiquid and inappropriate for the Scheme and early exit is recommended.
The Resort Group offered to repay the amount transferred to it by the Scheme. That offer was to release one plot every two months from 31 October 2016 subject to completion of legal agreements. Dalriada agreed to this offer and signed the agreements in December 2016.
The Reforestation Group Limited
The purported nature of this investment is that the Scheme has purchased ‘land rights’ to 21 plots of Brazilian farm land that is to be used for growing eucalyptus trees. The investment term is 21 years as it covers three cycles of seven years, which is the projected time period to grow and harvest the trees. The investment purportedly offers returns of 28-32% compounded over each seven year cycle.
The crop cycle of the eucalyptus tree is seven years. Accordingly, with the investment being made in 2014, the first return on any of the Land Rights Agreements (”LRA”) would not be realised until around 2021.
The estimated return after 7 years is £19,000 per hectare, which is a 90% return. There are a number of issues with this development which Dalriada finds concerning and are being investigated.
Dalriada has received advice that the investment is illiquid and inappropriate for the Scheme and early exit is recommended.
Dalriada, through the Scheme’s legal advisers, has written to Reforestation to seek further details regarding this investment and to seek justification for the apparent high level of returns promised.
The investment consists of 11 Bonds over three different series and made between 27 October 2014 and 15 May 2015. The Bonds mature after four years from issue but can be redeemed early after three years (upon six months’ notice) or otherwise with ‘the express consent of the directors of ABC Alpha Business Centres Limited’.
Investment returns depend on the series of the Bond and range from 8.11% to 8.25% with and additional bonus if the Bonds are not redeemed early.
In relation to the two series of Bonds, the Scheme has elected not to have ‘rolled up’ interest. This means that interest is due and payable to the Scheme on a quarterly basis. These payments were made until Q4 2016 but stopped when ABC Alpha Business Centres UK Limited and ABC Alpha Business Centres VI UK Limited went into administration on 20 January 2017.
The Bonds are corporate bonds in ANC UK Limited. ABC UK Limited is the capital raising vehicle for the investments. ABC UK Limited is wholly owned by a United Arab Emirates (UAE) entity, ABC LLC. ABC LLC owns and operates the investment portfolio of real estate investments.
ABC LLC is wholly owned by another UAE entity, the Property Store. The Property Store purportedly provides security of 200% of the value of the invested funds.
Dalriada has received advice that the investment is illiquid and inappropriate for the Scheme and early exit is recommended. An offer was made to buy back the Bonds subject to a 10% reduction. As noted above, interest payments stopped, and the offer was withdrawn when ABC Alpha Business Centres UK Limited, and ABC Alpha Business Centres VI UK Limited, were put into administration on 20 January 2017. Dalriada has prepared a proof of debt in relation to the investment but, as with others above, there is a risk that recovery prospects will be poor.
This unregulated investment consists of a “lease” on 7 car parking spaces in a new office development in Dubai taken out between 1 October 2014 and 17 April 2015. Under the Operator’s Agreement, there is 5 years guaranteed rental income
The Scheme is liable to pay the car park operator, The Property Store, 10% of any income greater than the guaranteed rental income. Once the guaranteed income period comes to an end the Scheme must pay The Property Store 10% of any income that is received from the car parking spaces.
The guaranteed rental income is paid monthly. It had been paid on time up to Q4 2016 when an issue with car park operator meant payments were stopped.
All of the car parking spaces that the Scheme has leased are located at Churchill Towers, Dubai. NCP Ltd owns the freehold of these car parking spaces. The contractual position is not clear due to incomplete documentation however it would appear that the investment operates as follows:
NCP Ltd owns the freehold and has assigned full commercial rights over the car park spaces to Horizon Properties SA; Horizon Properties SA has granted the Scheme a 99 year lease over each of the seven car park spaces; the Scheme has entered into an Operator’s Agreement with The Property Store with no set term for each of the seven car parking spaces.
Dalriada has received advice that the investment is illiquid and inappropriate for the Scheme and early exit is recommended.
An offer was made to buy back the car parking spaces subject to a 10% reduction. The £189,000.00 investment would return £170,100.00 plus the income received (£13,165.20 – 6.97% return). The offer was within a range that might have been acceptable however before it could be accepted Best Asset Management Limited removed the offer from the table. Dalriada is corresponding with Best in relation to the options for the investment.
So, in other words, a load of old rubbish. But then what would you expect from Stephen Ward who has destroyed thousands of victims’ life savings since 2010. He may be a highly qualified “pensions expert”, and the author of the Tolley’s Pensions Taxation Manual, but that doesn’t mean that he should ever be allowed anywhere near people’s pension savings.
The other questions that should be asked are:
why did HMRC allow the pension scheme to operate in the full knowledge that Stephen Ward was the trustee?
why has FCA-registered Gerard Associates, who were “advising” the victims not been removed from the register and sanctioned?
why did the ceding providers (including the trustee of the Police Pension Scheme) not do their due diligence and question the transfer requests?
Then came the first of Ward’s 
After Ark, Ward went on to run the 
Following its appointment Dalriada discovered that there were approximately 609 files on record relating to potential new members, each at various stages of progression towards becoming a new member.
SO, WARD CAN STILL OPERATE AS A PENSIONS ADMINISTRATOR? CAN STILL DO PENSION TRANSFERS? HE IS BASICALLY FREE TO CARRY ON AS BEFORE. THIS MAKES HMRC AND TPR COMPLICIT IN WARD’S MANY CRIMES.
So, in other words, a load of old rubbish. But then what would you expect from Stephen Ward who has destroyed thousands of victims’ life savings since 2010. He may be a highly qualified “pensions expert”, and the author of the Tolley’s