Five sentenced in FCA prosecution of £2.8m investment fraud

Written by Oliver Wade
10/09/2018

In a case brought by the Financial Conduct Authority (FCA), five individuals have been sentenced to a total of 17.5 years imprisonment for their roles in a shared fraud carried out through a series of boiler room companies, resulting in the loss of more than £2.8m of investors’ money.

Between July 2010 and April 2014, members of the public were cold-called and subjected to high pressure sales tactics to persuade them to purchase shares in a company that owned land on the island of Madeira. The investors were told that the value of the shares would increase substantially when permission to build 20 villas was granted, therefore enhancing the land’s value. Investors were promised guaranteed returns of between 125% and 228%. However, none were ever paid.

The sentencing of five defendants was concluded at Southwark Crown Court on 4 September 2018. The sixth defendant, Michael Nascimento, will be sentenced on 14 September 2018. The FCA has reported that Nascimento was the controlling mind, instigator and the main beneficiary of the fraud.

Commenting on the case, FCA executive director of enforcement and market oversight Mark Steward: “These fraudsters callously targeted investors who were often elderly and vulnerable, lying to them to get them to part with significant sums of money. Despite efforts to conceal and destroy evidence, the FCA, in one of its largest ever investigations, was able to ensure that these criminals faced justice and ended up behind bars.

“Applications under Proceeds of Crime legislation remain on foot and the FCA is determined to recover as much money from these defendants as possible for the benefit of investors.”

When sentencing the defendants, trial judge His Honour Judge Hehir labelled the incidents as “scams from start to finish” and that “some victims have lost everything they had”. The judge further added that it was “particularly repellent” that elderly people had been specifically targeted, and their stories were “at times positively heart-breaking”.

Charanjit Sandhu was sentenced to 5.5 years’ imprisonment, a senior broker who often adopted the bullying sales tactics and false names. The judge stated that he had “lost his moral compass” and was “dazzled by the rewards of crime”.

Hugh Edwards was sentenced to 3 years and 9 months imprisonment. Edwards recruited and trained brokers, drafted and sent misleading brochures to potential investors, while also personally pitching the product as a senior broker using a false name.

Stuart Rea was sentenced to 3 years and 9 months imprisonment, for fronting one of the companies, recruiting and managing the sales brokers and circulated the misleading promotional material.

Jeannine Lewis was given 2.5 years imprisonment, for acting as a personal assistant to Nascimento, helping him launder the proceeds of the fraud through multiple bank accounts including her own.

Ryan Parker was sentenced to two years imprisonment to be suspended for 18 months. Parker was also ordered to carry out 180 hours of unpaid work. He fronted two of the boiler rooms for Nascimento, and her personal bank accounts were used to conduit some of the money. His sentence was suspended by the Judge due to his age and personal mitigation and lower level of involvement. The Judge said that Mr Parker had “been exploited in a significant way by Michael Nascimento”.

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