The High Court ordered those behind a series of scam pension schemes to pay back £13.7 million following a request by The Pensions Regulator.
Members of the public were convinced to transfer their pensions into schemes whose funds were syphoned into accounts in the name of Friendly Pensions Limited and The Friendly Investment Company plc. These companies are both in liquidation with Michael Leeds & Nicholas Wood of Grant Thornton UK LLP appointed as Liquidators. Both also act as Trustee in Bankruptcy of the individual whom the Judge described as the ‘kingpin’ fraudster, David Austin.
As part of the Liquidators’ and Trustees’ investigations, an extensive tracing exercise into the flow of funds was carried out through offshore jurisdictions involving both criminal and civil proceedings in Switzerland, Cyprus and Andorra using local counsel. It transpired that Mr Austin’s family members were used in name to set up various companies to receive the misplaced funds. These family members, when interviewed by the Liquidators, claimed no knowledge of these entities and claimed to have been tricked into signing documents or providing their passport. The evidence obtained from these investigations supported The Pension Regulators’ claim.
This case demonstrates the extent of an Insolvency Practitioner’s power of investigation, particularly in overseas jurisdictions, and how it can be used to evidence fraud to recover misappropriated funds for victims.
The Liquidators' and Trustees' investigations were critical to the The Pension Regulators’ case.
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..the High Court ruled that Austin, Dalton, Barratt and Hanson should repay millions of pounds they took from the schemes over a two year period The Pensions Regulator (TPR) had asked the High Court to order the defendants to repay the funds they dishonestly misused or misappropriated from the pension schemes – the first time such an order has been obtained. Austin laundered funds from the schemes into his bank account and the accounts of family members in the UK, Switzerland and Andorra through a number of businesses that he had set up in the UK, Cyprus and the Caribbean, including FPL. TPR showed the High Court evidence of how members of Austin’s family had lived a life of luxury using the money – including showing off their spending on expensive goods, ski holidays and trips to Dubai.....