A fraudulent financial adviser who masterminded a boiler room scam relating to shares in a Madeira-based real estate investment has been jailed for 13 years, concluding the largest fraud investigation ever undertaken by the UK’s financial services regulator.
41-year-old Michael Nascimento, was sentenced to 13 years’ imprisonment for his role in a share fraud carried out through a series of boiler room companies in Pearl Island International LLC (later known as Paragon Private Wealth LLC) or Berkeley Brookes LLC (later known as Atlantic Equity LLC), which led to the loss of more than £2.8m of investors’ money, the UK’s Financial Conduct Authority said.
He was the “controlling mind, instigator and the main beneficiary” of the fraud, the UK regulator said in a statement announcing there sentence.
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, thereby enhancing the land’s value. Investors were promised guaranteed returns of between 125% and 228%.
None were ever paid. Investors’ money was used to maintain the fraud and particularly to fund the lifestyle of Nascimento. Over 170 members of the public invested more than £2.8m in the shares. Many were elderly or vulnerable, and lost life-changing sums, in some cases all their life savings.
This latest sentencing follows that of five other individuals involved in the same fraud on 4 September 2018, as reported, and takes the total imprisonment for all six individuals to 28.5 years.
Commenting on the case, Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
“This brings to an end the FCA’s largest fraud prosecution which has seen the perpetrators imprisoned for a total of 28.5 years, affording justice to victims who were the subject of their calculated deception. We are continuing to fight for compensation for victims out of their assets.”
In sentencing Nascimento, earlier today (Friday September 14, 2018) at Southwark Crown Court, the trial judge, Judge Hehir, remarked that Nascimento had shown “utter cynicism and contempt” for some of the victims.
He also said it was “particularly repellent” that elderly people had been specifically targeted and that many of the victims were vulnerable. He said that some of the stories he had heard during the trial were “positively heart-breaking” and that many of the victims had suffered “life-shattering losses”. The Judge said, “despicable was not too strong a word” to describe some of Mr Nascimento’s actions.
The Judge commented that Nascimento was “very adept at getting others to do his dirty work for [him]” and that many of his actions were “specifically designed to frustrate the task of the FCA and to prevent apprehension” but nonetheless “the FCA had built a formidable case” against him.
Nascimento “very rarely broke cover and revealed his identity” however, where he did he was “quite happy to defraud people [he] was looking at in the eye”. He also added that “over a period of years Nascimento] acted single-mindedly in pursuit of riches through fraud.”
Nascimento also received an additional sentence of 2 years for further criminality in respect of a separate prosecution by the Crown Prosecution Service and the City of London Police. This makes his total sentence 13 years.
On 4 September Charanjit Sandhu received an additional consecutive sentence of 3.5 years in relation to matters prosecuted separately by the Crown Prosecution Service, City of London Police and Kent Police. Taking account of the 5.5 years sentence passed in Operation Tidworth, this makes his total sentence 9 years’ imprisonment.
The FCA added that this was one of its’ most complex fraud investigations, and the first FCA prosecution of an offence of perverting the course of justice. It involved:
- Four separate search operations and one unannounced visit
- Seizure of over 100 computers and other digital devices
- Four million documents and (after de-duplication) over 1.4 million documents ingested into the FCA’s Evidence Management System requiring evidential assessment and review
- 142 witnesses
- 287 witness statements (2,406 pages)
- 3,682 exhibits (23,642 pages)
- Three defendants remanded in custody for breach of court bail by committing further offences.