SFO completes investment fraud investigations

The Serious Fraud Office (SFO) has completed its investigations into three investment frauds which lost hundreds of investors millions of pounds following a decision at Harrow Crown Court last week.

One man, Richard Gunter, was involved in two of the cons which involved alcohol investments and promised returns, in some cases, of 110% in three months.

Last year, Gunter was sentenced to five years' imprisonment for his involvement in the most recent scam. This will run concurrently to a previous four-year sentence he received in 2008.

The latest fraud concluded last week after a jury was unable to reach agreement following a six-week trial of another defendant, Robin Grove.

In that case, Gunter admitted he dishonestly obtained money from individuals mainly based in the USA and Canada using investment programmes based on various alcohol products.

The investments were sold through a UK based partnership known as The Hallmark Partnership and later through a number of UK based companies controlled by the directors, including Vintage Hallmark.

The SFO said this investment scheme was similar in nature to that of a ‘Ponzi' scheme wherein investors are promised high returns and are lured into investing money. The money is then mismanaged by those who control the scheme.

Some £30m of investors' monies was obtained as a result of the fraud. Had it been a genuine business and delivered to investors what it claimed could be achieved, the £30m was projected to become £100m.

The SFO said, throughout the operation of the investment schemes, Gunter alone withdrew in excess of one million pounds from the business for his own benefit and spent this money to buy and lease luxury cars, personalise car registration plates and invest in shares.

The other frauds

In September 2008, four defendants (including Gunter), were convicted at Southwark Crown Court for their involvement in a similar fraudulent wine investment business, Vintage Wines of St Albans

In March 2010, Umar Khatab and his son Haroon Khatab were ordered to pay almost £70,000 in compensation to two victims of a fraud relating to their Bedfordshire based frozen food company. The business purported to produce Asian frozen foods but used fictitious performance figures to encourage American investors to provide funds believing the money would be used in connection with a legitimate business.