Eight men convicted over “very substantial” fraud after huge FCA investigation Operation Cotton
Eight men have been convicted for their role in running a scam fund in which 110 investors lost more than £4.3m between them.
The men operated three property investment companies through which investors were pressured into buying land “at a vastly inflated price, on the false promise of a substantial profit”. The salesmen lied about current and future values of the land, and sometimes the land was not even theirs to sell.
The companies – Plott Investments Ltd, which changed its name to Plott UK Ltd, European Property Investments (UK) Ltd, and Stirling Alexander Ltd – “extracted at least £4.3m from investors and none of them have seen a return”, the Financial Conduct Authority said.
One 60 year-old victim was persuaded to hand over the money he received after his wife's death – leading one of the salesmen to boast: "Old geezer got spanked silly", according to Court News.
The FCA busted the ring through Operation Cotton, one of the largest investigations ever carried out by the watchdog, involving Canada Police and the Insolvency Service, and some of the victims.
In total the men have received 26 years immediate imprisonment.
Scott Crawley has received eight years, Dale Walker was given five-and-a-half years and Daniel Forsyth got two years – 15 months of which was lying to the FCA during a compelled interview.
Brendan Daley received 15 months on a suspended sentence for two years, alongside an electronically monitored curfew for four months. Aaron Petrou received five years; Ross Peters received five-and-a-half years and Ricky Mitchie was handed down a four-month sentence, suspended for 18 months.
Adam Hawkins will be sentenced at a later date.
The defendants were convicted of various offences including conspiracy to defraud, breaching the general prohibition by conducting investment business without FCA authorisation, aiding and abetting a breach of the general prohibition, possessing criminal property, and providing false and misleading information to the then-FSA in a compelled interview.
Peters also admitted to being in contempt of court by breaching a restraint order obtained by the FSA by taking more than £237,000 from bank accounts and disposing of Rolex watches and two racehorses.
Walker, who received nearly £900,000 of the proceeds of crime into his accounts, was described by the judge in sentencing remarks as having “deliberately frustrated and delayed the FCA’s investigations.”
Judge Leonard QC described the scheme as a “very substantial and deliberate fraud on the public.”
He stated that the operation was “a subtle and cruel fraud because it involves the concept of owning land, a commodity that the public are bound to think has value and on which they cannot lose and on which they can easily be persuaded that they can make very substantial profits.”
Georgina Philippou, acting director of enforcement and market oversight at the FCA, said: “People put their homes and retirements at risk on the back of promises of high returns that were never going to be realised. The severity of the sentences shows how seriously the courts view this kind of offending.”