Category: Pension Liberation

STM FIDEC’S VARIOUS NEFARIOUS BOOKS
STM Fidecs has played its “get out of jail free” card, avoided January’s court hearing and agreed to “cooperate” with the Gibraltar Financial Services Commission (GFSC) – allowing auditors Deloitte to probe STM’s dirty books.

I was more than a little miffed because I was looking forward to a nice day out in Gibraltar. I had my packed lunch all planned – spam sandwiches, hard-boiled eggs and ripe tomatoes (with a few spares in case I got a chance to lob one or two at Alan Kentish and David Easton).

Instead, Deloittes are going to “probe” STM’s undoubtedly cooked books. Fraudsters Alan Kentish and David Easton might try to hide some of the dirtiest stuff. (And in case some eager defamation lawyer is reading this, “fraudsters” is what Kentish and Easton called themselves on Facebook).

I will, of course, be more than happy to help Deloittes see the whole picture – rather than just what the Fraudsters want them to see. I will happily buy a whole shed full of spades as well as several boxes of latex gloves and surgical masks. However, the most important way in which I can assist them is to give them details of the various scams which the Fraudsters have operated and facilitated.

The Gibraltar regulator has for some time been trying to expose STM’s various nefarious activities – while Kentish and Easton have doggedly and desperately wriggled and slithered out of reach. The Deloitte investigation will finally expose the company’s internal compliance failures and conflicts of interest.

Deloittes will need to concentrate on at least three main areas: Trafalgar Multi-Asset Fund; Cornerstone Friendly Society and Blackmore Global. They will also need to liaise closely with the Serious Fraud Office which is investigating the Trafalgar fund scam and the West Yorkshire and Humber Police which is investigating the Cornerstone scam.

If Deloittes are going to be able to conclude their investigations into STM by the end of March 2018, they will have to ask many probing questions to establish the extent of STM’s “compliance failures” (aka facilitation of financial crime).
- Why did STM accept business from serial scammer XXXX XXXX’s unlicensed firm Global Partners Limited?
- Why did STM accept hundreds of transfers from UK residents in whose interests it was NOT to swap their British pension arrangements for an expensive QROPS?
- Why did STM allow these victims to have funds invested in XXXX XXXX’s own fund – Trafalgar Multi-Asset (a UCIS which is illegal to promote to UK residents)?
- Did STM not consider it to be a conflict of interest for the “adviser” and fund manager to be one and the same person? Especially a person with a sordid track record of operating pension scams such as Capita Oak, Henley, and Westminster?
Chief executive Alan Kentish has described the Deloitte “deal” as a workable solution and is jolly pleased to have avoided January’s court hearing. He has also said that the hearing wasn’t in either STM’s or the GFSC’s interests.

I suspect both STM and the GFSC knew it was very likely that quite a few STM victims whose pensions are in tatters were likely to turn up and that the hail of ripe tomatoes was likely to make quite a mess of the Supreme Court’s wallpaper.

Meanwhile, Alan Kentish and another STM Fraudster are still being investigated by the Gibraltar Police Money Laundering Unit. I just hope they don’t get hauled off to jail before Deloitte get to finish their digging and probing – as that might delay the publication of the report.

So what has prompted all this recent flurry of action? In November 2017, the GFSC wrote to STM Fidecs and outlined their concerns. These included – among other things:
- Effectiveness and oversight of STM Fidecs’ internal compliance functions
- High turnover of staff in Compliance Officer and Money Laundering Regulatory Officer roles
- General suitability and experience of compliance staff
- Exercise of corporate governance across all of the STM companies
- Compliance with legal and technical requirements in relation to the operation of client accounts
- Level and nature of due diligence undertaken when accepting new QROPS business and whether legal and regulatory obligations are/were being met
- Nature of investments made in relation to QROPS e.g. the Trafalgar Multi-Asset Fund – linked to serious customer detriment and alleged fraud
I think Deloittes also ought to look into why STM Fidecs’ own staff were bullied into “looking the other way” when they were worried about compliance issues (and then paid off to keep them quiet).

Finally, STM Fidecs has now announced it will be moving from Gibraltar to the UK. This move comes after what Alan Kentish has described as “unexpected challenges”. Kentish remains bullish, however, about the company’s profitability. However, he still fails to express any concern for the hundreds of STM Fidecs’ victims who will inevitably see heavy losses in their pension funds and will suffer poverty in retirement. Shame on this callous character.

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

What is a pension scam?

Follow Pension Life on twitter to keep up with all things pension related, good and bad.
January 28, 2018
Julian Hanson – why pension scammers must be prosecuted
Why pension scammers such as Julian Hanson must be stopped before they burn more victims’ pension funds – such as in the Ark and Barratt and Dalton scams

Julian Hanson – why pension scammers must be prosecuted.

And jailed.

BARRATT AND DALTON PENSION SCAM: The Pensions Regulator has announced that on 23 January 2018, four pension scammers have been ordered to pay back £13.7 million they stole from their victims.

BARRATT AND DALTON PENSION LIBERATION SCAM:

245 victims had their pension funds stolen by David Austin, Susan Dalton, Alan Barratt and Julian Hanson. Their company – Friendly Pensions Limited (FPL) – acquired the pension funds using cold calling techniques with promises of ‘tax-free’ payments.

The Pensions Regulator (TPR) had asked the High Court to order the defendants to repay the funds they dishonestly misused or misappropriated from the pension schemes – the first time such an order has been obtained.

But this clearly demonstrates that pension scammers should be prosecuted and jailed quickly before they go on to scam thousands more victims. Julian Hanson – an integral part of the Barratt and Dalton scamming team – was also an integral part of the Ark scam.

Julian Hanson acted as an introducer/adviser in the ARK case (also in the hands of Dalriada) in 2010/11. He scammed over 100 victims out of their pensions – totaling around £5.5 million worth of retirement savings. Hanson, in common with the many evil scammers creating scam after scam, was happy to push aside the appalling predicament of his Ark victims and stroll on to find new victims for the Barratt and Dalton scam.

Hanson had promised his Ark victims their pensions would be profitably invested in “high-end London residential property” and would grow sufficiently to discharge the 50% they were allowed to take from their funds. This, he assured the victims, would NOT be taxable.

As soon as the Pensions Regulator placed the Ark schemes into the hands of Dalriada Trustees, Julian Hanson should have been prosecuted and prevented from ever scamming pension savers again. But, sadly, he was left free to continue his evil trade. Hanson was one of a whole army of scammers peddling the Ark scam:

And hereby lies a basic flaw in the system: had Julian Hanson (along with his fellow scammers) been prosecuted and jailed for scamming the Ark victims, in 2011, the subsequent Barratt and Dalton victims might have been saved. However, it will hopefully be the last one that Julian Hanson is allowed to get away with, as his name will now be synonymous with pension scams.

The same is true for the other introducers/advisers peddling Ark who remain free to continue their trade:

Andrew Isles is still a practicing accountant at Isles and Storer

James Ian Hobson of Silk Financial went on to operate more companies which operated lead generation and cold-calling services for further scams such as Fast Pensions and Trafalgar Multi-Asset Fund

Stephen Ward went on to scam thousands more victims out of their pensions and into toxic investments as well as illegal liberation in the Evergreen QROPS; Capita Oak, Westminster, Southlands, Headforte, and London Quantum.

The mastermind behind the Barratt and Dalton scam was apparently David Austin – a former bankrupt with no experience of pension investments. He invested victims’ pension funds in truffle trees and St. Lucia timeshares, and then laundered the victims’ pension funds through relatives in the UK, Switzerland, and Andorra. Austin used a number of businesses he had set up in the UK, Cyprus and the Caribbean – including Friendly Pensions Ltd. Austin’s family clearly had no shame about where their money came from and flaunted their new-found wealth all over social media. Fortunately, this vulgar and heartless bragging made the job of gathering evidence for the High Court much easier for tPR

TPR had appointed Dalriada Trustees to the case, and with this ruling, they will be able to attempt to recoup the stolen money from the four scammers. Unfortunately it is unclear how much money is actually left to recoup as scammers are notoriously clever at hiding their ill-gotten gains offshore and presenting themselves as “men of straw”.

Nicola Parish,TPR’s Executive Director of Frontline Regulation, said: “The defendants siphoned off millions of pounds from the schemes on what they falsely claimed were fees and commissions.

“While Austin was the mastermind, all four took part in stripping the schemes almost bare. This left hardly anything behind from the savings their victims had set aside over decades of work to pay for their retirements.

“The High Court’s ruling means that Dalriada can now go after the assets and investments of those involved to try to recover at least some of the money that these corrupt people took. This case sends a clear message that we will take tough action against pension scammers.”

One the investments in the Barratt and Dalton scam was £2 million in an off-plan timeshare development in St Lucia called Freedom Bay. This same development also took millions of pounds’ worth of funds from the victims of the ARK scam. Freedom Bay is now in administration.

In this scam, operating between November 2011 and September 2014, 245 people were cold called, promises of a cash lump sum and compliant investments at 5% were promised.

The reality of what happened to the funds was:
- More than £10.3 million was transferred to businesses owned or controlled by Mr Austin
- Just £3.2 million of the funds was invested
- False documents were made to cover these figures
- Funds given back to the victims were a % of their actual funds and NOT profits
- More than £1 million was paid to the “ introducers” or “agents” who conducted the cold calls
One of the victims, Colin, from South Wales, had become the full-time carer for his partner when he was approached via text message. Promised investments in the now bust St Lucia Developments, a lump sum which he planned to spend on a holiday. Having heard about the pension scams, he tried to contact the scammers with no success.

Colin, 48, said: “I should have known that it was too good to be true. I should have sought advice and asked more questions, but I didn’t.

“I had contributed towards my £50,000 pension pot, for which I had worked really hard, and now that has been taken from me.

“The loss of my pension will have a massive impact on my life. When my children finish school I will be around retirement age. There will be no money to draw down when I turn 55 and no pension savings for later life.

“I was greedy. I feel stupid for throwing away my financial future for £4,200.”

A couple, John and Samantha, both fell victim to this scam despite being advised by their pension provider that it could be a scam. They received their lump sum and were told their pension was invested in truffle trees. After reporting the case to the police, they were later informed that their lump sum was from their own funds and HMRC promptly served them with a large tax bill.

John, 46, said: “As a result of my dealings with Alan Barratt my final salary pension is in a scheme that I don’t understand the status of but which I have been told is a scam.

“As far as I know, the majority of my pension fund is invested in truffle trees but I doubt whether that is legitimate. My partner appears to have lost her pension too.

“I deeply regret ever listening to Mr Barratt.”

Why has cold calling not been banned by the government?

Why are ‘introducers’ still be used?

Why are the scammers in the Ark case not under criminal investigation?

Serial pension scammers like Julian Hanson and all the others need to be stopped now. New laws need to be introduced so hard working and trusting citizens aren’t left with decimated pension funds and huge tax bills they can’t pay.
January 28, 2018
Say NO to structured notes for pensions!

Structured notes – say NO to them if an adviser wants to invest your pension in them. They are high-risk investments which are for professional investors ONLY – and not for ordinary retail investors – especially pensions.

Say NO to structured notes for pensions!

Structured notes have been used as pension investments for some years. Many advisers don’t understand them – and certainly, no retail pension investors understand them either. Structured notes are definitely not the low risk, high return investments originally promised – and the capital is NOT protected as claimed by some advisers.

As in the above example, it is a disgrace that structured note providers such as Commerzbank, Nomura, RBC and Leonteq have allowed their toxic products to be used for retail pension savers. Even when these rotten products have nosedived repeatedly, these dishonest and dishonourable providers keep on flogging them to destroy victims’ retirement savings.

Along with the rogue advisers – such as the scammers from Holborn Assets and Continental Wealth Management – and the rogue structured note providers, there are also rogue insurance companies who accept these toxic, high-risk, professional-investor-only investments. These insurers know full well that accepting these notes will doom the policyholders to poverty in retirement, but they don’t care. Some of the worst of these “life offices” are Old Mutual International, SEB, and Generali. These companies are no better than scammers and really should be called “death offices” since they effectively kill off thousands of victims’ life savings with their extortionate charges.

Commerzbank, Nomura, RBC and Leonteq all claim to be “award winning and innovative companies” and yet they show zero compassion to the victims who lose huge proportions of their retirement savings. The structured note providers keep paying commissions to the scammers – ranging from 6% to 8% of the investments. And then, when the structured notes go belly up, they simply sell more of the same toxic rubbish to the same scammers in an attempt to further ruin the victims.

So what the hell are structured notes? And why should investors say NO to them?

A structured note is an IOU from an investment bank that uses derivatives to create exposure to one or more investments. For example, you can have a structured note betting on the S&P 500 Price Index, the Emerging Market Price Index, or both. The combinations are almost limitless.

Say NO to structured notes for pensions!

Structured notes are frequently peddled by less-scrupulous financial advisers – as well as outright scammers – as a “high-yield, low-risk” supposedly backdoor way to own stocks. However, regulators have warned that investors can get burned – which they frequently do. If the investment banks can flog it, they will make just about any toxic cocktail you can dream up. In reality, a structured note is an unsecured debt issued by a bank or brokerage firm – and the amount of money the investor might (or might not) get back is pegged to the performance of stocks or broad market indexes.

Read more: Structured Notes: Buyer Beware!

On the surface, the ‘cocktails’ the structured note providers make seems like they could generate a great return. However, the truth is they often benefit the financial adviser rather than the investors.

Structured notes are suitable for professional investors only – and the fact sheets issued by the providers state this clearly. Whilst they do offer high returns if successful, they are also high risk with no protection on the amount invested. Structured notes should not be used for pensions.

Continental Wealth Management(CWM) invested over a thousand low to medium risk clients’ retirement savings in structured notes – mostly provided by Commerzbank, Nomura, RBC and Leonteq. These clients now have seriously decimated funds and are worried sick. But Commerzbank, Nomura, RBC and Leonteq have shown neither remorse for their toxic, high-risk, illiquid products nor concern for the hundreds of victims.

OMI (Quilter), Generali and SEB have also been totally disinterested in the thousands of failed structured notes they have facilitated. Indeed they are even charging the victims crippling early exit penalties when they decide to get out of the expensive and pointless insurance bonds which are further eating into the remaining funds.

Most structures notes have no guarantee, so their worth often depreciates to less than the paper they are printed on. Much like a bet at the races, if you bet £10 on Noble Nag to win in the 2.30 at Kempton Park at ten to one, you are guaranteed to win £100 if the horse wins. But if the horse doesn’t win, you say goodbye to your money.

Most structured notes are dressed up to look appealing to the uninformed victim. But in reality they are high risk and illiquid and can result in total decimation of a victim’s life savings. The advisors rarely disclose the commissions they are earning from the purchase of the structured notes (or from the insurance bond). Plus, once the structured notes start showing a serious loss, the adviser just dismisses this as “only a paper loss”. As the advisors have already taken their cut, they are rarely bothered if this high-risk investment does lose the client money.

So if you hear the term ‘structured note’ in connection with your retirement fund, just say ‘NO’. The only people profiting from this type of investment are the advisers.

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

What is a pension scam?

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

January 27, 2018
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

October 19, 2016
Scorpion 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.

October 18, 2016
Dalriada Standstill Agreement for Ark Scheme Victims

The 487 Ark victims have gone through pure hell since the Pensions Regulator appointed Dalriada Trustees to the Ark schemes. First they discovered from Justice Bean in the High Court that the scheme was a “fraud on the power of investment” and then they discovered that HMRC were going to try to tax loans at both ends as well as at the scheme end. Then they discovered that Dalriada were taking steps to get the loans repaid. And lastly, that the 55% tax would still be payable even if the loans were repaid.

Dalriada are now applying to the court for permission and directions to use the members’ own pension funds to take action against the members to recover the loans.

But meanwhile, the six-year period since the Ark victims transferred their original pensions (often gold-plated final salary ones) into Ark and got their “MPVA” loans has almost elapsed. Once this period expires, Dalriada would be legally out of time to take legal action for recovery of the loans, so they are sending out “Standstill” agreements to the members. This would have the effect of “stopping the clock” so that the member, their transfer and their loan would be frozen in time at – say – five years, eleven months indefinitely.

If Ark victims refuse to sign the Standstill agreement, Dalriada will immediately take legal action against them and there may be significant legal costs awarded against the members. If the victims do sign the agreement, then Dalriada have an open-ended opportunity to take recovery action for as long as it takes. Dalriada have said that repaying the MPVA loan “may” help challenge HMRC against the unauthorised payment tax. HMRC disagree.

There remain many unanswered questions: why did tPR register the Ark schemes in the first place and why couldn’t they have de-registered them when they suspected pension liberation?; ditto HMRC?; why did all the ceding providers hand over so many millions of pounds worth of pension schemes so haphazardly without doing any checks? (The worst ceding provider was, without question Standard Life).

Perhaps the Tolleys Pension Taxation Manual (authored by Stephen Ward) might provide some answers? https://www.amazon.com/Tolleys-Pensions-Taxation-2014-2015-Stephen/dp/0754549356

September 16, 2016
Windsor Pensions Pension Liberation Scam

THE WAY THE WINDSOR PENSIONS PENSION LIBERATION SCAM WORKED

Members were persuaded to transfer their pension into a QROPS and with a hefty transfer fee of at least 10%. The rest was liberated with no attempt to even try to clock the transaction in a “loan” vehicle. In fact, the transfers never went anywhere near the actual QROPS but into a bank account with the same name as the QROPS. This was clear fraud.

IDENTITY OF THE MAIN PLAYER IN THE WINDSOR PENSIONS PENSION LIBERATION SCAM

Steve Pimlott of Windsor Pensions

http://www.windsorpensions.com/

HMRC is now sending out the tax demands to the victims and these are being appealed. It is not known how many people were involved, but according to HMRC it is a lot. When asked about the possibility of a tax liability, Pimlott’s response has been:

“I cannot give you tax advice. If you cash out, it’s possible that HMRC will send you a tax bill. We assisted approximately 5,000 people who took that route and I would estimate that 200-300 did receive a tax bill. The rest to my knowledge did not. Of those that did, many just ignored it because they were resident in a different country and had no assets left in the UK.”

June 9, 2016
Evergreen QROPS Pension Scam and Marazion Loans

EVERGREEN RETIREMENT TRUST QROPS PENSION SCAM AND MARAZION LOANS

THE WAY THE SCAM WORKED

When Ark got shut down in June 2011, Stephen Ward flew to New Zealand and set up the Evergreen NZ QROPS liberation scam with Simon Swallow of Charter Square. Ward also set up a “loan” company in Cyprus called Marazion. He also did a deal with two investment funds: Penrich and Spectrum. Expats would transfer their UK pensions to Evergreen and pay a 10% transfer fee. As soon as the transfer was complete, a loan – funded by either

Expat victims (mostly) would transfer their UK pensions to Evergreen and pay a 10% transfer fee. As soon as the transfer was complete, a loan – funded by either Penrich or Spectrum (to whom the loans were assigned) was arranged between Marazion and the member. The loan was for a fixed five-year term, and the member was made to sign a “lock in” agreement with Evergreen.

The loan interest was 8.5% compound (quarterly) and would mean that the original loan amount would increase by 50% by the end of the five years. Ergo, the maths worked like this at the outset: £100k transfer; £10k fees; £90k Evergreen fund; £50k loan. At the end of the five-year term, the Evergreen fund would either have increased, decreased or remained the same (in fact, it has decreased) and the loan would have increased to £75k. The member was offered the option to renew the loan for a further five-year term at a higher rate of interest.

For three years, Evergreen managed to avoid disclosing what the assets of the scheme actually were, but in 2015 they had no choice other than to disclose that 41% of the scheme’s assets consisted of Penrich and Spectrum. After a lengthy and detailed complaint to the NZ Ombudsman, the complaint against Evergreen was not upheld and the victims were originally left “locked in” until 2017. However, Evergreen has now moved the goal posts and the victims are locked in until they reach the age of 55. Evergreen was removed from the QROPS list by HMRC in November 2012.

THE IDENTITY OF THE MAIN PLAYERS

Stephen Ward of PPS/Marazion

Continental Wealth Management SL who acted as introducers

Simon Swallow of Charter Square

HOW THE MAIN PLAYERS WERE INVOLVED

Continental Wealth acted as introducers – and referred to the firm as the “sister” company to Ward’s company Premier Pension Solutions; PPS processed the transfers and loans; Swallow of Charter Square managed the scheme.

June 8, 2016
London Quantum – Dorrixo Alliance Pension Trustee

Car Parking spaces are NOT suitable assets for a pension fund

DORRIXO Alliance is a pension trustee firm (for London Quantum among various others) run by Stephen Ward and his sidekick Anthony Salih

THE WAY THE SCAM WORKED

Dorrixo was a pension scheme administration and trustee company set up by Stephen Ward. It was the trustee for at least a couple of schemes – possibly dozens or more (including London Quantum placed in the hands of Dalriada by tPR in June 2015).

THE IDENTITY OF THE MAIN PLAYERS

Stephen Ward and Anthony Salih

HOW THE MAIN PLAYERS WERE INVOLVED

Trustees/administrators for a number of pension schemes operating either liberation or questionable investments or both. The victims first started to be scammed into the London Quantum pension scam in August 2014.

Dorrixo Alliance was the trustee/administrator for a number of pension liberation scams operated by Stephen Ward after Ark and Evergreen got shut down. When Ward moved away from liberation scams he moved into toxic pension assets which paid handsome investment introduction commissions.

Dorrixo Alliance was trustee for the London Quantum Occupational Pension Scheme – later London Quantum Retirement Benefit Scheme . This scam was placed in the hands of Dalriada Trustees in 2015. London Quantum was a bogus occupational scheme and had 96 members with a total of £6.8 million. The sponsoring employer was Quantum Investment Management Solutions LLP and the administrator was Stephen Ward’s Premier Pension Transfers Ltd.

The advisory firm behind this scam was an associate of Stephen Ward’s – FCA-registered Gerard Associates, run by Gary Barlow. A herd of “introducers” was responsible for scamming victims into London Quantum included Viva Costa International, Go BMV, Baird Dunbar, What Partnership.

The assets of the scheme included Dolphin GmbH, Best International (ABC Corporate Bond and Dubai Car Parks), The Resort Group, Quantum PYX Managed FX Fund, Reforestation Group Ltd, Park First, Colonial Capital Group plc. None of these were suitable for a pension fund.

The London Quantum scam was Suspended by tPR and placed in the custody of Dalriada Trustees in June 2015.

June 3, 2016
Pension Liberation Fraud Facts

Pension Liberation – ruining thousands of lives. HMRC pursues the victims of pension liberation fraud and not the pension liberation fraudsters. This has got to change.

April 22, 2016
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.

April 1, 2016
Edward Troup HMRC’S Role in Six-Year Pension Liberation Fraud
Edward Troup 11^th 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.

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.

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)
April 1, 2016