Pension Scam Investments

The world of pension and investment scams is dominated and driven by commissions on investments (usually unregulated). The scammers’ strategy is always identical: get the pensions away from the safety of a reputable pension provider and into the hands of a SIPP, a SSAS or a QROPS. One purported benefit of these types of schemes is that the member has control over where the funds are invested. This means that the scammers have control over where the funds are invested. These types of schemes are open to abuse by unscrupulous commission hunters whose only mission is to fill their own pockets – at the expense of the victim. Once transferred, the victims’ retirement funds are controlled by the scammers and invested in unsuitable, unregulated investments which pay fat introduction commissions.

It could be argued, however, that not all the investments are necessarily bad. There are some basic rules for pension investments – so let’s take a look at the different types and how they could (or should) fit into a pension portfolio.
Store pod full of toxic funds
  • Funds. Funds come in all shapes, sizes, flavours and types. As long as the funds are regulated, have a good track record, are appropriate to the risk profile of the individual investor and are competently managed by qualified investment professionals, they can be appropriate for a pension. However, pension scheme members must not be locked into any funds, and the charges must be transparent and affordable. There must not be any hidden commissions, and any one fund should form part of a diverse portfolio.
  • Bonds. Bonds are term loans with supposed “guaranteed” returns or interest. They are not regulated investment products, so there is no guarantee or protection in the event that they fail (as they often do). Typically, they are sold to victims as being “asset backed” and with unrealistically high returns or interest. They also typically pay high commissions to the scammers who promote them. These should be avoided at all costs as they are entirely unsuitable, risky and illiquid for retail investors – and so many of them are out and out scams.
  • Structured Notes. These are “derivatives” and are very complex instruments which are only suitable for sophisticated or professional investors. They also pay hefty commissions to the scammers who use them indiscriminately to “churn” their victims’ funds. Churning means investing the same sum of money multiple times in different structured notes to generate the maximum amount of (hidden) commissions. An experienced and sophisticated investor might want to consider having a small part of a pension portfolio invested in structured notes – as long as the commission taken by the “adviser” is low enough (or preferably non-existent).
  • Property. Residential property cannot form part of a pension’s underlying assets. However, commercial or agricultural land or property is acceptable. The main problem with property, however, is that it is illiquid – so it should only be used with extreme caution as part of a diverse portfolio of well-spread assets. Property also typically attracts high commissions and can frequently be used and abused by scammers. Store pods and car parking spaces fall into this category, along with holiday accommodation, forestry and industrial units.

The key to building a sensible and appropriate portfolio of assets for a pension is to ensure that only a licensed and qualified adviser is used to recommend the investments. Such professionals should only be charging for advice – and should not be earning commission on the investment products which are sold. If an adviser is receiving commission from the investment provider, then he cannot be independent – and should not be giving advice at all.

store pod full of toxic mini-bonds

The key to making sure that the whole pension investment package is in the interests of the investor – rather than purely in the interests of someone posing (often fraudulently) as an adviser – is to look at each stage in the process.

What I mean by the “package” is this:

A. The transfer out of the existing pension scheme should be in the interests of the investor

B. The transfer in to the new pension scheme should be in the interests of the investor

C. The investment of the pension fund should be in the interests of the investor – and not just the adviser (or introducer)

D. There must be no offers of “loans” or “cashback”

The timeline of the past eleven years is littered with sordid and tragic examples of the whole “package” being nothing but a scam. But often this is true even when one of the component parts is legitimate or even harmless. It is the combination of all the elements which can, together, produce a fatal result: loss (to the investor).

In the UK, every pension scheme member has a statutory right to a transfer from one HMRC-registered scheme to another HMRC-registered scheme. However, this can often be a terrible move if it results in the investment of the money falling under the control of a commission-hungry scammer who has no regard for the interests of the victim.

store pod full of structured notes
The most risky part of any pension transfer “package” is always the investment. Here are some examples:

Capita Oak

Bogus occupational scheme set up by a squad of known, serial scammers with a mythical sponsoring employer (in Cyprus). Promoted and distributed by boiler-room cold callers and “introducers”. 300 victims’ pensions transferred into the Capita Oak scheme, and all £10 million of their funds invested in Store First. The scammers behind the scheme earned up to 46% in commission. The scheme was placed in the hands of Dalriada by the Pension Regulator. Dalriada reported that the investments were worthless and Store First was placed into liquidation in 2019.

Carey Pensions

Hundreds of victims’ pensions were transferred to the Carey SIPP scheme purely so their funds could be invested in Store First. With the same result as in the Capita Oak scam, victims found that the “guaranteed” returns of 16% did not materialise. This was because the 16% had been paid “accidentally” to the scammers. One such victim – Russell Adams – took his case to the High Court and lost. But the judgement was overturned in the Court of Appeal and Carey must now reinstate his original pension. Other SIPP providers involved were Berkeley Burke, Montpelier (Curtis Banks) and Lifetime (Hartley).

London Quantum

Another bogus occupational scheme – run by the notorious Stephen Ward. 100 victims were scammed out of their pensions for the sole purpose of investing their funds in high-commission, unregulated funds and bonds. Investments included Quantum PYX – a forex trading fund; Dolphin Trust – now in liquidation; Park First Glasgow; Colonial Capital Loan Notes; The Resort Group holiday flats in Cape Verde and The Reforestation Group in Brazil. The scheme was placed in the hands of Dalriada by the Pension Regulator. Dalriada reports that most of the investments are worthless.


A group of known unlicensed scammers – including Square Mile in the Czech Republic – advised hundreds of UK residents to transfer their pensions to this Hong Kong scheme. All the victims had their pensions invested in worthless, high-commission, unregulated funds and bonds such as Blackmore Global, Swan, GRRE, Granite and Christianson Property Capital. The scheme is now being re-registered by the Hong Kong regulator – and the funds are deemed to be worthless.

Continental Wealth Management

Unlicensed CWM, based on the Costa Blanca in Spain, defrauded 1,000 British expats out of £100 million worth of pensions and life savings. Victims had their funds invested in high-risk (and high-commission) structured notes which were only suitable for professional investors. The clients’ signatures were forged on the investment dealing instructions. Most of the structured notes suffered catastrophic losses, and what little remained of the victims’ funds were further eroded by the high fees on the illegally-sold insurance bonds provided by Quilter, Utmost and SEB. The CWM crew – along with Stephen Ward of Premier Pension Solutions (who signed off all the pension transfers) – are now facing criminal charges of fraud and forgery in Spain.

A pension scheme is a bit like a store pod. It is a container – no different to a cardboard box or shopping trolley. By itself, the scheme (or the pod) is harmless. The harmful ingredient is the greedy, unlicensed introducer or “adviser”. Fill a shopping trolley with unhealthy foods, alcohol and cigarettes and you have a recipe for an untimely death. Fill a store pod with flammable chemicals, and you risk an explosion. Fill a pension scheme with high-risk, high-commission, toxic investments, and you have the perfect recipe for poverty in retirement.

5 thoughts on “Pension Scam Investments”

  1. There are many issues with this article. It seeks to simplify what is in reality a complex subject. I am not convinced it can be simplified.

    The first issue is the target audience.

    Many scammers have been very successful over the past decade because they prey on vulnerable people. Victims have two things against them – willingness to trust and ignorance.

    People, by and large are genetically predisposed to trusting others. From birth we start trusting people: parents and family members; teachers; politicians; accountants; doctors, nurses, dentists; police; religious leaders; lawyers; carers, even the garage mechanic that fixes your car and dare I say it – financial advisers! Society is dependent on trust but all too often, almost on a daily basis, you see reports where trust is abused with disastrous consequences for victims and yet people still continue to trust others because it is in our genes to do so.

    It will not change.

    In fact I have learned that victims of pension scams seem to be more willing – not less – to trust others after discovering they have lost their pension! Their desperation could be a factor but I would love to find some academic paper explaining this behaviour.

    There are many victims of Blackmore (Bonds plc & the offshore Global fund), who are members of Angie’s facebook group, firmly of the belief – mistakenly I might add – that others are helping them get their money back. They are not. They have their own agenda and will move on leaving victims behind. I have seen this for several years now! Politicians are interested only in political gain – then they will move on. Blood sucking lawyers are only interested if there is money in it. Journalists are chasing the big headlines and then very quickly move on. There are numerous third parties purporting to care about these scams and giving false impressions of helping the victims but none show any interest in taking on the architects of these scams directly, or taking on ceding providers for maladministration or taking on the offshore schemes for facilitating the scams. Who is challenging Nunn & McCreesh? No one. Journalists are more interested in Andrew Bailey not reading his emails; some are chasing bottom feeders like Amyma who were promoting Blackmore Bonds. Who is reporting on hundreds of victims in Nunn & McCreesh’s offshore Blackmore Global fund that still has hundreds of victims pension’s locked into it via offshore QROPS in the Isle of Man, Malta and Hong Kong? No one. Who is shining the light on these offshore QROPS that are STILL siphoning money from those pensions? No one! Why? Because the headlines are not big enough or there is insufficient kudos or political gain to care.

    Some brave victims are left out on a limb to take their own action – Russell Adams and Manita Khuller are two recent examples. The members of Angie’s facebook group however, praise many of these 3rd party parasites like heroes. It’s as if whenever they pull up their trousers there is a total eclipse of the sun! What’s disgusting is these 3rd parties are leading people on, furthering their own agenda and promoting false hope and they know it.

    On top of a misplaced willingness to trust there is ignorance. Together, these two inescapable human characteristics create the perfect storm for the scammers.

    How many people are quite willing to admit: “I was never any good at maths”? They wear this admission like some badge of honour. Well, there are even more people than that who would no doubt admit: “I know nothing about pensions!” There is also a lot of people think they know about investing but in fact know didly squat! Pensions and investments do not form part of the school curriculum. So even though the government has handed out significant pension freedoms they have not provided any infrastructure to educate people how best to use those freedoms! Again – the perfect storm for scammers – give people freedoms but keep them ignorant. Seriously? You might as well just write the scammers a cheque!

    In my experience, victims are incredibly ignorant about what has happened and have no idea where to turn. This perhaps explains the popularity of facebook groups – there is some comfort in numbers. Most facebook groups are private but Angie’s is not, which is perhaps a big miscalculation by Angie, since some members have been threatened with legal action by perpetrators if they don’t remove their posts!

    For victims, it never rains but it pours!

    The blog post attempts to offer guidance but is itself promoting ignorance. Angie says, incorreclty: “Bonds are term loans with supposed “guaranteed” returns or interest. They are not regulated investment products …”. This is true of the “unregulated mini bonds” which so much has been written about in the press recently. However, there are some regulated bonds and one category is about as safe as it gets – Government Bonds – also known as Gilts. These are not only popular with pension funds because they give a pretty much guaranteed income, they are tradeable on the open market. But just like other investments they go up and down with the market. Angie has been at this game for a decade now and if she still doesn’t understand it then what chance has Joe Public?

    Angie talks of “Property” as an asset class. However, again she is not giving the true picture. She says: “The main problem with property, however, is that it is illiquid – so it should only be used with extreme caution…” It isn’t that simple. There are regulated property funds (M&G for example) that are popular with pension funds. The M&G fund owns shopping malls, office blocks etc. They are popular because they produce a regular income. They are not so “illiquid” in so much as they do maintain a liquidity to satisfy those wanting to sell their units. Where they get into trouble, for example after the brexit vote, is when investors panic. If too many investors want to sell, it takes time to generate enough liquidity. After the Brexit vote M&G suspended trading because everyone panicked thinking office blocks would be left empty as companies rushed to move their headquarters to Europe. The usual story – let’s panic and create a problem!

    When the panic was over the fund reopened for trading. However, questions still remain today following the pandemic and whether “offices” will remain the principle working practice or whether “shopping malls” will remain popular – mine has a lot of empty units. It’s a complex subject.

    The issue with the unregulated garbage like Blackmore (both Global and Bonds) as well as Dolphin and Christianson is, they were claiming to be “asset” backed but in fact this was not strictly true. They were into property “speculation”. i.e there is no real “asset” until the properties were built and ready for sale! They were not buying ready made, off the shelf property but buying either land or properties in ruins and were speculating they could be transformed into units with more value than the cost of building/renovating them. The problem with property speculation is it takes considerable skill and knowledge to turn a profit. Property development is fraught with risks. It’s a sink hole for costs that can spiral out of control and there are no returns until finished. Nunn & McCreesh had no qualifications or experience whatever in this. When Blackmore Bonds collapsed it had spent all of the £47m they had taken from investors and the assets were valued at no more than £5m. Investors stand to get nothing back – blood sucking lawyers & administrators will see to that!

    The victims failed to appreciate the difference between property “assets” and property “speculation”. Had they realised this they also would not have fallen for the “insurance” against loss of capital. No insurer is going to take on “property speculation” – that is a serious risk and insurers are all about risk. So it was an obvious non starter.

    Investors were completely ignorant but trusted the perpetrators of misinformation.

    These are complex issues and there is just no getting away from it and even Angie is not showing any appreciation of the complexities. Joe public has no chance at all.

    The offshore Blackmore Global is most likely in an even worse state than the Bonds since its makeup isn’t all property speculation. Some of the funds were siphoned into things like Nunn & McCreesh’s Belize company Kingston, which trades in Forex! What do Nunn & McCreesh know about Forex trading? The money has most likely ALL gone. However, the QROPS’ (mentioned above) irresponsibly allowed up to 100% allocations of people’s pensions into a fund they knew absolutely nothing about, operated by people with no track record. Nunn & McCreesh didn’t publish the underlying assets in Blackmore Global until May 2020 – 6 years after it started taking in pensions and have never published audited accounts! What were scheme administrators thinking – “to hell with the Trust & Trustees Act (in Malta for example) or duty of care, let’s just take the money, no one will care?” And, by the way, they were right – no one does care it seems!

    How many journalists, MP’s or other two bit upstarts, making all the noise about Blackmore Bonds, are going after the QROPS for allowing pensions to be invested in this way – Malta has trustee laws just like we do and the QROPS are without doubt, in breach of these! No one is chasing these because the returns for doing so – “headlines”, “political gain” or “kudos” – is insufficient to motivate anyone. No one cares about the victims.

    Victims, by and large are not an uneducated population either. They are often graduates from all walks of life – Doctors, Teachers, Airline Pilots and such like. They are guilty of nothing more than trusting someone and being ignorant about what they are told about a subject that is inherently very complex. Trusting people is in the genetic makeup and ignorance in a complex (very) subject are hardly “failings”. What is disgusting is the exploitation of this trust by people who have no interest in helping them but simply exploiting their misery for kudos, politcal gain or media headlines! None of these 3rd parties are chasing the architects of scams but instead poke at public figures, because the returns for kicking Andrew Bailey for not reading his emails has more “value” than kicking a Maltese QROP no one has even heard of, for breach of trust!

  2. Hi, My comment and enquiry is in regards to the recent additional 1% pa hidden charge, which is to be “backdated” 8 years to the commencement date of my investment. This is a Providence Life bond/pension fund,, initially marketed and sold by DeVere in 2013 using STM Fidecs Gibraltar, for the “Trustee”.
    Perhaps others on here night have suffered similarly to myself and would like to share what their experiences and actions have been.

    I am no longer with Devere or the IFA who sold me the product, Greg Hirst of Broadgate, DeVere Group Thailand. Neither he nor myself can see on any paperwork where it states this “Marketing Fee”. As too others who have also been contacted.

    Greg Hirst strongly rejected and denies that these charges were on the documents that I signed not in the T&C of the fund at the time. He added that this was later implimented in the 2014-15 updated contracts. He has made a formal complaint to both parties and the Regulator, for 8 of his clients who are involved in this.

    Both myself and my current IFA at Pecunia have contacted STM Fidecs and PPL to request copies of the contract and those terms which they refer. As of yet a week later and we have had no response or acknowledgement.

    Thank you kindly in advance for your assistance if you are able please

    1. Please contact me I have experienced investments and issues with both companies, and I am currently trying to form a Class Action. BTW are you also aawre of the issues with Pecunia clients invested in Bermuda with Custodian Life. I live in Thailand and I would be grateful of your cooperation, Many thanks [email protected]

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