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Monday, January 29, 2024

Fraudster responsible of £226m Harlequin Group rip-off

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A jury at Southwark Crown Court docket has at the moment discovered responsible David Ames, 70, one of many key figures behind the intensive £226m Harlequin fraud which conned many pension buyers.

The Critical Fraud Workplace prosecuted Mr Ames for the fraud which concerned celebrity-endorsed, luxurious resorts within the Caribbean.

Mr Ames and Harlequin duped 8,000 UK buyers – many investing their pensions and life financial savings – into investing within the Harlequin Group, a lodge and resorts growth enterprise.

The victims had been satisfied that they had a safe funding in property however in actuality Harlequin Group by no means operated as promised and most of the properties it promoted had been by no means constructed. It had most of the hallmarks of a ‘Pyramid’ scheme.

Mr Ames was discovered responsible on two counts of fraud by abuse of place. He supplied no proof in his defence and might be sentenced in September.

Quite a lot of SIPP buyers had been inspired to spend money on Mr Ames’ schemes and the failure of Harlequin has been a consider a variety of SIPP companies failing as claims and complaints mounted.

Complaints about Harlequin and its investments started to emerge practically a decade in the past and in 2013 the FCA issued a warning in regards to the agency’s advisers approaching buyers who might need acquired redress from the Monetary Providers Compensation Scheme (FSCS), to encourage them to spend money on Harlequin property.

The FCA warned on the time that as a property agency Harlequin itself was not regulated though it could have handled regulated advisers. The FCA mentioned it had seen an rising variety of SIPP investing in abroad property, together with by way of Harlequin.

Harlequin’s enterprise mannequin relied on buyers paying a 30% deposit to purchase an unbuilt villa or lodge room, half of which went towards charges for Harlequin and salespeople, with Harlequin claiming to place within the remaining 15% towards development. 

With no further supply of funding, three properties wanted to be bought to finance one luxurious lodging unit, the SFO mentioned. This led to the “exponential enlargement” of the scheme, the diversion of investor cash between resorts and in the end a funding shortfall of over £1.2 billion by 2012 – seven years after Mr Ames launched the scheme. 

By this level, an knowledgeable accountant advised Southwark Crown Court docket that buyers had been uncovered to a close to 100% danger of loss, which Mr Ames didn’t dispute.

By the point Harlequin went into administration it had offered round 9,000 property items to buyers, with fewer than 200 constructed. All through your entire eight 12 months undertaking, solely 28 of over 8,000 buyers ever accomplished on a purchase order, leaving 99% with no return on their funding. 

The Harlequin Group in the end misplaced a complete of £398m of investor funds.

The SFO mentioned a number of thousand victims misplaced pensions and life financial savings to the fraud whereas Mr Ames and his household earned £6.2m. The Harlequin firms had been household companies, using at instances each David Ames’ spouse and his son, who was paid £10,000 per 30 days. 

Mr Ames had been quickly barred from serving as an organization director because of a earlier chapter and styled himself because the “Chairman of Harlequin.”

The SFO mentioned it discovered that Mr Ames repeatedly ignored warnings that the enterprise was prone to be bancrupt whereas concealing this truth and persevering with to promote extra items to buyers. Mr Ames sacked associates who raised the alarm, and on one event advised colleagues that involved buyers wanted “to be put of their place” to keep away from attracting “dangerous press.”

Mr Ames made publicity a key precedence, promising celebrity-sponsored tennis, golf and soccer academies with advertising movies wherein he offered his imaginative and prescient for the resorts. Predicting main tourism growth he managed to safe the endorsement of politicians within the area, together with the Prime Ministers of Barbados, St Lucia, and St Vincent and the Grenadines.

Lisa Osofsky, director, Critical Fraud Workplace, mentioned: “David Ames dedicated fraud on an enormous scale, knowingly exposing 1000’s of UK buyers to losses totalling lots of of tens of millions of kilos. Diligent SFO investigators reviewed tens of millions of paperwork, traced over 8,000 investor deposits and referred to as on greater than 25 witnesses, to reveal the complete extent of Ames’ deception.” 


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