Harlequin's Ames charged by Serious Fraud Office

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David Ames, the founder of the beleaguered UK-based resort property development company, Harlequin, has been charged by the Serious Fraud Office with three counts of fraud, in what will be seen as a potential setback for efforts he has been spearheading to revive one of the company’s properties in the Caribbean.

Ames denied all the charges and said he looked forward to clearing his name.

In a statement today, the SFO said the alleged activities for which it is charging Ames occurred between January 2010 and June 2015,  and came in the wake of a joint investigation into Harlequin it has been carrying out in association with Essex Police since the company collapsed in 2013.

Ames, who is based in Wickford, Essex, is to appear at Westminster Magistrates’ Court on 22 March.

Dossier ‘submitted in 2012’

In denying the SFO’s charges, Ames issued a lengthy statement in which he detailed how the case apparently began, in 2012, when it came to light that certain contractors Harlequin had employed – namely Wilkins Kennedy partner Martin MacDonald, Wilkins Kennedy senior manager Jeremy Newman and fraudulent contractor Padraig O’Halloran – had provided the SFO with a dossier to instigate an investigation.

“Since that dossier was submitted to the SFO, Padraig O’Halloran has been found liable for fraudulent misappropriation of millions of Harlequin investors’ monies, Jeremy Newman and Wilkins Kennedy settled a Harlequin claim for defamation, and Wilkins Kennedy have been found liable for professional negligence,” Ames said.

“It is also a matter of public record that Wilkins Kennedy advised on the business model, and Martin MacDonald was Harlequin’s de facto chief financial officer.

“If I did not care about investors or if I had something to hide, I could have thrown in the towel years ago, but right now my team is working on a proposal that would see me hand control of Buccament Bay Resort to 3,000 investors to help them save their investments in Harlequin Property (SVG) Ltd.

“Ever since the summer of 2010, I have fought tooth and nail to protect investors’ interests – and won important legal battles along the way – and I will continue to fight for their financial futures.

“I look forward to clearing my name.”

SFO announcement in 2013

The SFO first announced it was investigating the Harlequin Group of companies on 5 March 2013. In its statement today, it said this investigation continued.

It also noted that investors who invested in one of Harlequin’s property developments through a self-invested personal pension (SIPP) scheme under the advice of an independent financial adviser business which is no longer trading could be entitled to compensation from the Financial Services Compensation Scheme.

Buccament Bay rescue plan 

As reported,  Ames, pictured right, last month unveiled a plan he said had been “months” in development, which would take advantage of a new Saint Vincent and the Grenadines regime designed to give companies facing bankruptcy an alternative to liquidation.

As currently envisioned, the scheme would involve one of four as-yet-unnamed hotel management companies signing up to run the Buccament Bay development on behalf of the investors, who would be handed ownership of the business.

Ames unveiled his plan – still in draft form, as it is remains, for now – on 25 January, a day after the UK’s Court of Appeal turned down a request by the UK accountancy firm, Wilkins Kennedy, to appeal a High Court judgment last December, which ordered it to pay US$11.5m (£9.14m) to Harlequin, in connection with an over-payment to a construction company known as ICE Group.

Ames’s plan is to put the US$11.5m – minus legal fees and other costs incurred in bringing the legal case against Wilkins Kennedy – towards restoring the Buccament Bay resort in Saint Vincent to “full use for the benefit of Harlequin Property (SVG) investors”, who, he explained, would be handed ownership of the resort.

One of the hotel management companies that have expressed an interest in running Buccament Bay is located in the Caribbean and the other three come from elsewhere, Ames said.

If the SVG court rejects the proposal, HP SVG and its assets will enter a liquidation process. A vote on the proposal would be held within 21 days of its being officially published.

Last week, Harlequin said a survey it had carried out recently, of 700 of around 3,000 HP SVG invstors found that 90% of them said the key features of Ames’s rescue plan for Buccament Bay ‘appealing’”.

(The HP SVG business also includes an undeveloped beachfront site in Barbados known as Merricks.)

Based on the results of its survey, Harlequin said there seemed to be widespread support for going ahead with its rescue scheme, rather than seeing the business liquidated and the assets – such as would be left after trade and other creditors were paid – distributed to them.