Two directors of a scam property investment that conned 750 investors out of £50 million have been jailed.
The pair ran unregulated investment scheme Arck, which went into liquidation in June 2012 following investigations by regulator the Financial Conduct Authority (FCA) and the Serious Fraud Office.
Arck offered investors stakes in luxury overseas resorts such as Estrela Santiago, Cape Verde; Paradise Beach, Cape Verde and investment company Joyston 4.
The Insolvency Service believes much of the invested cash is not recoverable.
After a trial at Southwark Crown Court, London, Judge Loraine-Smith gave the directors jail sentences for their part in the fraud.
Fraud and forgery charges
Richard Clay admitted three fraud charges in December 2014. He was jailed for 10 years and 10 months.
He was also handed a five year serious crime prevention order which requires him to report to the police about his business activities, foreign travel and finances.
In separate action by The Insolvency Service, he was banned from acting as a company director for 15 years.
Kathryn Clark pleaded guilty to three fraud charges and two of forgery in October 2014. She was given a two year suspended jail sentence and told to carry out 300 hours of unpaid community work.
She was also banned from acting as a director for 14 years.
Both also admitted making representations to investors that they knew were untrue or misleading between 2006 and 2012.
Luxury lifestyle paid for by others
Sentencing, the judge said: “I believe Clay will try to blame someone else for what he has done and has no remorse for the damage he has inflicted on other people.’
“Your lifestyle has all the trappings of success – luxury homes, holidays, helicopters and smart cars.
“None of this was real success. All your businesses failed and you lived off other people’s money.”
During the trial, the court was told Clay was the mastermind behind Arck, while Clark helped make the scheme credible because she was authorised to give investment advice by the FCA.
Her sentence was reduced as she helped police during the investigation.
“This was a fraud that robbed ordinary people of their savings and pensions,” said David Green, director of the SFO.
The Financial Services Compensation Scheme (FSCS) has invited investors in Arck to claim compensation.