UK Serious Fraud Office Investigates "Ethical" Investment Company

The Serious Fraud Office (SFO) in the UK announced it is conducting a criminal investigation into alleged fraud concerning two companies, Global Forestry Investments and Global Forex Investments. A solicitor at Alisons Legal Practice, Andrew Callen, represents 140 investors; He says his clients lost roughly £4.6 million ($7.1 million) in Global Forestry Investments and estimates total losses in the two schemes at £20 million ($30.9 million).

This past week the SFO carried out two search warrants in Hertfordshire (south-east England). It is also asking anyone who has invested in either Global Forestry Investments or Global Forex Investments to complete a questionnaire on the SFO website.

The two companies are led by the same two business partners, Andrew Skeene and Omari Bowers. They are based in the UK but promoted the investments worldwide. The two registered the company GFI Consultants Ltd. on April 13, 2010 and had offices in London, Brazil and Dubai.

Champagne and Canapés

Two weeks after registering their company in 2010, the two put out an invitation on their website “cordially” inviting potential clients to an “open evening for a night of champagne and canapés.” There, the duo promised that investors would get a “better insight” into the company’s “phenomenal Teak projects in Brazil.” A project so lucrative it was yielding their existing clients “10-20% per annum.”

According to their well-designed brochure, their Global Forestry Investments Belem Sky Plantation, in the Para province of Brazil, was aimed at providing "providing long-term growth through investing in Brazilian sustainable forestry." Investors, they promised, would be given the opportunity to "participate in an ethical and financially rewarding investment."

It went on to explain: "Investors simply lease a plot on the timber plantation. The value of the investment and the return it will derive is based on the Teak trees growing on it. Specialist timber management companies lease the plots from the investors and manage the land."

The minimum investment was £5,000 ($7,720) and there was no upper limit. Rental fees, according to the brochure, were £500 per 0.1 hectare plot per annum "dependent upon the timber management company chosen by the investor." This would apparently be equivalent to 10% return, with additional percentages every three-to-five years.

In small print at the end of the brochure, GFI notes:

"GFI Consultants Ltd is not regulated by the FSA and is not authorised to offer advice to the general public concerning regulated or unregulated investment. This is not an authorised investment for the purpose of the UK FSMA (2000) and as such buyers have no access to statutory or regulatory protections including the Financial Ombudsman Service and the Financial Services Compensation Scheme."

Three-Pronged Attack

The land was supposed to be held "in beneficial ownership for the investor" by a company called Title Trustees International. This company was a subsidiary of Hutchinson & Co. Trust Company Limited. Another subsidiary of Hutchinson & Co. was Citadel Trustees. In April 2014, Citadel Trustees changed its name to Highpoint Trustees.

Meanwhile, a third company, Emerald Knights, sold the plots of the Belem Sky Plantation to retail investors. And, while Global Forestry Investments was not regulated by the FSA, Emerald Knights did promise investors that Citadel Trustees, which was FSA regulated.

Callen's company, Alisons Legal Practice, is preparing to issue proceedings in the High Court against all three companies. His company has already recovered more than £2.5 million ($3.9 million) through the High Court for investors of Global Forex.

Payments Stopped

Many frustrated investors soon began noticing payments had stopped from the investment. In 2013, GFI issued a newsletter explaining away the payment delays as "a cumulate of various factors." They attributed it to the management companies experiencing "an unusually long rainy season followed by logistical and banking issues caused by a regulation in Brazil." Of course, the company reassured investors that the payments were imminent.

In January 2014, in another newsletter, GFI went even further and said that "administrational complications" that "played a part in causing the delays" had been rectified.