London Police Acts against Alternative Investment Fraudsters

on Dec 11, 2012

**Police Arrests 11 Involved in Carbon Credits Scam**

Last week, several scams which involve fraudulent companies offering alternative investments were busted, following a number of victims’ complaints and a City of London Police investigation. An FT Adviser report from 10 December 2012 revealed a coordinated police raid on locations across the South East including two City of London offices linked to fraudulent companies Hudson Forbes, Burlington Energy Markets and CT Carbon. In the action, 10 men and one woman, suspected of running a criminal operation selling worthless carbon credits to UK investors, were arrested. The 11 suspects, who have all since been released on bail, are said to have conned investors out of tens of thousands of pounds for overpriced certificates supposedly linked to carbon offsetting initiatives.

According to a police statement, the arrests are the latest development in a City of London Police investigation into a growing number of suspected carbon credit frauds, where UK investors buy the products in the belief that they can be traded to companies in a legitimate market, when the credits actually either do not exist or can only be traded voluntarily, where they have no natural market or set price and are open to abuse.

Matthew Bradford, detective inspector for the City of London Police, who led the recent raid, warned that carbon credits are the latest in a growing list of products marketed by fraudsters. He said: “They exploit people’s misguided belief that environmental investments cannot fail, and then use teams of cold callers to seal the deals, often bullying victims into handing over their savings against their better judgement.” Mr Bradford added that this type of alternative investment is designed for companies and small businesses to offset their carbon emissions and not for the individual investor looking for a tradable product.

**UK’s First Criminal Convictions for Land-Banking Fraud**
In a separate report from 7 December 2012, the FT Adviser announced that a City of London Police investigation has led to the UK’s first criminal convictions and prison sentences for a £3 million land banking fraud, conning more than 300 investors over a two-year period. According to the report, last week, Omar Eshpari and Stefan Mitchell were sentenced to seven and six years, respectively at Isleworth Crown Court, having been found guilty of five counts of money laundering.

!m[Carbon Credits and Land-Banking Investment Scams Busted after Police Investigation](/uploads/story/1016/thumbs/pic1_inline.png)The police said that the pair had launched a number of fraudulent companies including Pemberton International, Eldon International, Willow International, Allied Investment and Abacus Investment. They all were conning the elderly and vulnerable into buying plots of land which were either worthless or massively over-priced. While the investment locations were marketed as being in a prime position for development, investors were actually putting their money into plots “with no chance of gaining planning permission let alone building houses”. By late 2009, this fraudulent practice had caused numerous reports by victims. They triggered a City of London Police investigation, which then led to a series of arrests in October 2009 and now results in these first criminal convictions.
Commander Steve Head from the City of London Police said: “The UK’s first land banking fraud convictions is a landmark moment for all those committed to combating and preventing fraud and sends out a clear message to the criminal community that law enforcement is wise to their new tricks and is taking decisive action.”