Madeira luxury villa fraudsters jailed for £2.8m scam

Five people have been sentenced to almost 18 years in prison for their involvement in a boiler room scam that defrauded vulnerable individuals out of £2.8m.

In the FCA’s second largest ever criminal prosecution, the trial judge handed down sentences totalling 17.5 years for a scam that promised investors returns of between 125% and 228% for a planned property development in Madeira, Portugal.

The four men and the woman convicted put together the scam that took £2.8m from 175 people whom they cold-called, according to the UK’s financial watchdog, which prosecuted the case.

The group didn’t have a license to develop the land, which was on a slope away from the sea and had potatoes growing on it, according to the FCA.

In some cases investors, which included the elderly, lost their entire life savings.

Judge Hehir said the victims’ stories “were at times positively heart-breaking”. He said it was particularly repellent that the elderly had been targeted.

“Those who commit these offences cannot expect anything but firm punishment,” he said.

Senior broker Charanjit Sandhu was sentenced to five and a half years’ imprisonment. Hugh Edwards and Stuart Rea, who both recruited sales brokers, were sentenced to three years and nine months’. Jeannine Lewis, a personal assistant, received two and a half years’ while Ryan Parker received two years.

A sixth defendant Michael Nascimento, a former bouncer described by the FCA as the “controlling mind, instigator and the main beneficiary of the fraud”, will be sentenced at Southwark Crown Court next week.

“These fraudsters callously targeted investors who were often elderly and vulnerable, lying to them to get them to part with significant sums of money,” FCA enforcement head Mark Steward, said in an emailed statement. “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.”

Operation Tidworth was one of the FCA’s most complex fraud investigations and its first prosecution of an offence of perverting the course of justice.

The case involved seizure of over 100 computers and digital devices and 3,682 exhibits.

The case comes as the FCA has sought to show its strength as an investigator and prosecutor of financial crime, and stamp out increasingly sophisticated boiler room fraud.

Fraud has cost victims £706m in the six months through March, a decrease of 18%, according to police figures. Less than one in six reports of fraud result in charges, cautions or other judicial outcomes.

ABOUT THE AUTHOR
Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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