The Financial Services Compensation Scheme has paid 2,700 investors around £125m compensation after they lost money in Harlequin Hotels and Resorts-related schemes, with further claims still coming through, the lifeboat fund has revealed.
Around 6,000 investors invested an estimated £400m in the property development projects and the FSCS confirmed to Professional Adviser it was still receiving associated claims.
Advisers - or ‘agents' - who sold Harlequin earned commissions of up to 15% of the investment. Ultimately, the villas were never built, and the investment is now worthless. In some cases, the same property was sold to multiple investors.
Harlequin Group was linked to companies owned by chairman David Ames and his family. The companies dealt with the marketing, sale and construction of resorts on the Caribbean islands of St Vincent and Grenadines, St Lucia, Barbados, and the Cayman Islands. Ames is subject to an ongoing prosecution by the Serious Fraud Office.
Financial advisers mainly pushed Harlequin hotels and resorts as an unregulated investment for self-invested pension plans (SIPPs). The Buccament Bay resort (pictured) in St Vincent and the Grenadines was earmarked as Harlequin's flagship resort.
The hotel 'soft-opened' when part built in 2010, closing in December 2016. Hundreds of local workers were sacked without pay and have received no compensation.
The hotel remains closed, despite a bid by a local consortium to take over the property from bankruptcy trustees last year.