Investment fraudsters found guilty of £2m scam after eight-year-long investigation
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Two men have been convicted of fraudulent trading following successful investigations by the City of London Police and Hampshire Police, with the support of the Crown Prosecution Service.
Paul Seakens and Luke Ryan were part of a criminal enterprise that used high pressure sales tactics to convince victims to purchase Voluntary Emission Reduction (VER) carbon credits that were essentially worthless. Individuals were sold these VERs on the basis they were good and promising investments but, in reality, there was no market for investors to sell them on and no realistic likelihood of there ever being one.
In addition, they sold VERs to individuals at inflated mark-ups of over a 1000 percent, unbeknown to investors. This meant that, even if a secondary market should develop, the value of the VERs would have to go up by very large percentages before the buyer could even recoup monies paid, let alone make a profit.
A number of victims were also persuaded to make further purchases from ‘recovery room’ scams. In these scams, VER brokers would offer victims an ‘exit strategy’ for their investments, but only on the basis that the investor made a further purchase of VERs to make their ‘portfolio look more desirable to a purchaser’, or a payment for some other commodity.
Paul Seakens, 60, from Whitewebb, Enfield, and Luke Ryan, 33, from Eastleigh, Hampshire, were found guilty by a jury at Prospero House on Wednesday 12 May 2021. Seakens was also found guilty of four separate counts of money laundering.
They are due to be sentenced on Friday 28 May 2021 at Southwark Crown Court.
Detective Inspector Paul Curtis, from the City of London Police’s Financial Investigation Unit, said:
“This has been a complex and lengthy investigation and I would like to thank the victims in this case for their resolve and determination in seeing it through to a conclusion. We have believed from the very beginning that the evidence clearly proved these carbon credits were sold fraudulently to investors, often through cold calls and high-pressure sales techniques to the vulnerable and elderly.
“Purchasers of VERs were consistently given false and misleading information by the brokers as to their future profitability, and we are pleased the jury were able to convict these greedy and malicious individuals beyond all reasonable doubt for their crimes.”
Both Seakens and Ryan were directors of a company called Enviro Associates Ltd (Enviro), until a BBC documentary captured Ryan mis-selling VERs to undercover reporters. Seakens then removed himself as Co-Director, but remained closely linked to the company. During the trial, the court heard how a number of victims who purchased VERs through Enviro had lost £368,428.94 in total. The prosecution argued this was almost certainly an underestimate of the true extent of Enviro’s fraudulent trading, as evidence recovered by police showed sales of approximately £2 million in VERs. Ryan then used Seakens company Carbon Neutral Investments (CNI) to launder these illicit gains.
Detective Inspector Andrew Symes, of Hampshire Constabulary’s Economic Crime Unit, said:
“This case epitomises the strength of joint partnership working when investigating serious and complex crimes – as is the case with this particular investigation. Working alongside the City of London Police, the Crown Prosecution Service and most importantly the victims – Hampshire Constabulary can take pride in the fact that we have helped to bring these offenders to justice.
“They caused immeasurable loss over a number of years in many different forms and preyed upon, at times, the most vulnerable - not only in Hampshire but country wide. They deceived their victims by mis-selling of VERs, and grossly inflating mark ups, with little to no opportunity of the investor being able to sell their credits at any point in the future.
“We would like to thank those victims who courageously provided evidence in this investigation over a three-month period. To those affected, and their families, we hope that today’s result brings you comfort that justice has now been delivered.”
The pair didn’t just use CNI to launder their proceeds of crime, 73 other VER brokers used the company’s banking facilities, and the facilities of other affiliated companies linked to Seakens, who would then take a proportion of the sales revenue. Given the fraudulent nature of the selling of VERs as investments, this meant that the bank accounts controlled by Seakens acquired and transferred extensive amounts of criminal property from these scams, acting as a money laundering scheme on a vast scale to facilitate fraud. This scheme was undoubtedly of assistance to the VER brokers as it provided reassurance to potential investors that their money was going to a safe independent third-party company such as CNI, which, at the time, was a FSA (now FCA) regulated company.
With the money made from fraudulent VER sales, Ryan and Seakens funded lavish lifestyles, buying sports cars including a Bentley Continental GT, and using the company accounts to purchase designer clothes and other luxury items.
Jane Mitchell, specialist prosecutor of the Crown Prosecution Service, said:
“This was a particularly hideous scam operation, where vulnerable victims lost their life savings on so-called investments that had greatly inflated return claims and no resale market.
“In each of these frauds elderly and generally inexperienced investors were targeted. They were cold called in their homes and pressured into buying these so-called investments by criminals who made them look genuine and trustworthy. They were conned: the products being sold (Voluntary Carbon Credits or VERs) were, in essence, worthless. I would like thank the work of the City of London Police and Hampshire Police on their excellent investigation which enabled us to prove that Seakens and Ryan were exploiting vulnerable victims out of much needed savings for their own selfish purposes.”
Total losses attributed to the victims identified in the case amounted to £1,847,630.94, but again, this is believed to be a large underestimate of the total scale of the fraud as financial analysis of bank statements showed well in excess of £30 million went through various company accounts controlled by Seakens.