Five individuals who were involved in a financial scam in the United Kingdom have been sentenced to a total of 17.5 years’ imprisonment.
The decision was reached at Southwark Crown Court on Tuesday. The fraud, which was carried out through a number of boiler room companies, resulted in investors losing £2.8 million ($3.6 million).
The Financial Conduct Authority (FCA), which brought the case forward, says that this was one of its largest ever investigations. The sixth defendant, Michael Nascimento, who was the mastermind and main beneficiary of the scam, will be sentenced separately on September 14, 2018.
Commenting on the case, Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: “These fraudsters callously targeted investors who were often elderly and vulnerable, lying to them to get them to part with significant sums of money.
Despite efforts to conceal and destroy evidence, the FCA, in one of its largest ever investigations, was able to ensure that these criminals faced justice and ended up behind bars. Applications under Proceeds of Crime legislation remain on foot and the FCA is determined to recover as much money from these defendants as possible for the benefit of investors.”
Scammers targeted the elderly or vulnerable in particular
Breaking it down, the five individuals who were sentenced on Tuesday are Charanjit Sandhu, Hugh Edwards, Stuart Rea, Jeannine Lewis and Ryan Parker. Out of the five, Sandhu got the largest sentence (5.5 years) and Parker got the lightest (2 years imprisonment suspended for 18 months).
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Sandhu was a senior broker. According to the FCA statement, he used bullying tactics and fake names to con unsuspecting investors. Specifically, the trial judge, Judge Hehir, called his conduct “cruel and callous” and “chilling”.
Overall, more than 170 investors lost an total of £2.8 million. Many of the investors were elderly or vulnerable, with some losing all of their life savings. The funds that were solicited from investors went towards maintaining the fraud and Nascimento’s pocket.
When sentencing the individuals, the Judge remarked that the joint efforts were “scams from start to finish” and that “some victims have lost everything they had.” According to the statement from the FCA, he also added that it was “particularly repellent” that elderly people had been targeted. Noting that their stories “were at times positively heart-breaking.”
Details on the scam
From July 2010 until April 2014, the scammer’s cold-called members of the public using high-pressure sales tactics. Their aim was to con people into purchasing shares in a company that owned land on the island of Madeira.
Investors were told that their investments would reap guaranteed returns of between 125% and 228%, however, none were ever paid. The returns would be seen once permission was granted to build 20 villas on the land which would increase the land’s value.
As part of their tactics, the scammers said that the scheme was partnered with Barclays, planning permission had been granted for the villas, there was a guaranteed share buy-back and the Four Seasons or Hilton Hotel chains had agreed to buy the development once it was completed for £43 million.
As can be expected, none of this was true and neither Barclays nor the hotel chains had any involvement in the fraud. The shares were sold through five companies: Morgan Forbes (UK) Ltd, First Capital Wealth Ltd, Bishops of Mayfair Ltd, Wallberg Dillion Reid Ltd and Sterling Capital Corporation Ltd.