David Ames, the chairman of failed Caribbean property investment scheme Harlequin, has been found guilty of two counts of fraud after investors lost almost £400m in total.

The SFO said it had secured the conviction of Ames, 70, at Southwark Crown Court. Ames, who offered no evidence in his defence, was convicted of two counts of fraud by abuse of power.

The SFO said the Harlequin scheme had actually been a multi-million-pound fraud involving celebrity-endorsed luxury resorts in the Caribbean.

It said Ames deceived more than 8,000 UK investors in the Harlequin Group, a hotel and resorts development venture. Victims were led to believe they had a secure investment in property whereas, in reality, Harlequin Group was never operating as promised, said the SFO.

It explained the business model relied upon investors paying a 30% deposit to purchase an unbuilt villa or hotel room, half of which went toward fees for Harlequin and relevant salespeople, while Harlequin put the remaining 15% toward construction.

Investors were fraudulently told that the building of the properties would be further funded by external financial backing.

Uncomfortable reading: 21 years punctuated by advice scandals

With no additional source of funding, three properties needed to be purchased to finance just one of the luxury accommodation units, said the SFO. This led to the "exponential expansion of the scheme, the diversion of investor money between resorts and ultimately a funding shortfall of over £1.2bn by 2012 - seven years after Ames launched the scheme".

By this point, an expert accountant told Southwark Crown Court that investors were exposed to a near 100% risk of loss, which Ames did not contest. 

The SFO investigation revealed that by the time it went into administration in 2013, Harlequin had sold around 9,000 property units to investors, with less than 200 ever actually being constructed. Throughout the entire eight-year project, only 28 of over 8,000 investors ever completed on a purchase, leaving well over 99% with no return on their investment.

The Harlequin Group ultimately lost a total of £398m of investor funds.

Several thousand victims lost pensions and life savings to the fraud, while Ames and family pocketed £6.2m, the SFO added. The Harlequin companies were family businesses, employing at certain times both David Ames' wife and his son, who was paid £10,000 per month, it added.

Source: SFO

Ames, it said, had been temporarily barred from serving as a company director due to a previous bankruptcy and therefore styled himself as the "chairman of Harlequin".

The SFO uncovered how he repeatedly ignored warnings that the business was likely insolvent, while concealing this reality and continuing to sell more units to investors. Ames sacked associates who raised the alarm, and on one occasion told colleagues that concerned investors needed "to be put in their place" to avoid attracting "bad press".

Serious Fraud Office director Lisa Osofsky said: "David Ames committed fraud on a huge scale, knowingly exposing thousands of UK investors to losses totalling hundreds of millions of pounds.

"Diligent SFO investigators reviewed millions of documents, traced over 8,000 investor deposits and called on more than 25 witnesses, to expose the full extent of Ames' deception."

Ames will be sentenced in September 2022.