Sunday, April 5, 2020

Millions Siphoned From Offshore Pension Fund

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Pension directors sucked millions of pounds from money thousands of investors had staked against an offshore plantation scheme.

Around 3,500 investors had ploughed £70 million in cash into Ethical Forestry Ltd, says the government’s business conduct watchdog, The Insolvency Service.

The company owned 80% of a Costa Rica company that owned land and a sawmill.

Ethical Forestry took in unregulated investments as pension transfers into self-invested personal pensions (SIPPs).

Many of the clients came from unregulated brokers, such as Avacade Investment Options, which cold-called potential customers to offer free pension reviews that highlighted the opportunities of investing in the plantation.

Unregulated investment and advisers

In 2012, the Ethical Forestry directors transferred their own pensions into a tax planning scheme.

They borrowed £28.8 million in loans from the company and withdrew more than £19 million in cash, according to the company accounts.

In 2013, HM Revenue & Customs opened an investigation into the pension scheme which failed to deter the directors from siphoning money from the company.

After HMRC issued assessments demanding £14 million of unpaid tax, the company entered voluntary liquidation as there were no funds to pay the tax debt.

The Insolvency Service then launched an investigation which has ended with directors Matthew Pickard (48), from Poole, Stephen Greenaway (40) from Bournemouth and Paul Laver (40) from Ferndown each agreeing to accept a six-year disqualification as a director.

Disqualified as directors

The order means that they cannot act as a director or manage a company during the disqualification period.

Anthea Simpson, chief investigator for the Insolvency Service said: “This is a relatively unusual case as the conduct of the directors criticised occurred before HMRC had issued their determinations of Ethical Forestry’s liabilities.

“However, the directors were aware that HMRC were investigating the tax planning scheme through which they had already drawn very substantial sums from the company, and yet in this knowledge they continued in the same vein for a further 12 months, taking an additional £7 million.

“We considered that this was unacceptable rather than ethical, and amounted to unfit conduct which justified disqualification.”

The Serious Fraud Office opened an inquiry in to Ethical Forestry Ltd in 2016 to recoup some of the lost money for investors.

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