IFA jailed for $800k Brit expat fraud

Purported IFA Alan Gardner has been jailed for defrauding British expats in Indonesia of over US$800,000 through a fictitious investment scheme.

The Bromsgrove-based adviser faces six years imprisonment for devising and orchestrating an investment scheme claiming to involve foreign currency trading, luring four British and a Canadian expat into "a classic case of high-yield investment fraud".

The court found the high net worth expats were seduced by the notion they could be involved in exclusive financial deals, normally the preserve of institutional investors, with the supposed (and false) backing of UBS.

Gardner had a brief spell with an IFA firm in Jakarta but did not complete his employment probationary period. He returned to the UK and resumed financial dealings in 2003 when he set up the alleged Aegis Forex fund.

By 2004 he was promoting the fund in Indonesia, with the assistance of Ashley Anderson, an adviser he met at the Jakarta-based firm.

Gardner created false publicity material, fund documents and statements of accounts, including unauthorized use of the UBS logo.

Operating from a room in his Bromsgrove home, he used Anderson and linkes with the expat community to attract investors. Anderson, who died in 2007, received payment from Gardner for each client he introduced, but otherwise did not benefit from the fraud.

The five expat investors involved worked in the petro-chemical industry in Indonesia. One investor was shown a fabricated table of figured showing a growth of a $100,000 investment to $151,000 over a three month period.

To allay skepticism the returns were too good to be true, assurances were given that access to the fund had previously been the exclusive privilege of institutions, but was now open to private investors who could be confident "in the validity of the opportunity given that International Banks alone trade in excess of $US 15 Trillion Dollars daily on the money markets".

Once investors opted into the scheme, Gardner created the documents and instructed the investors to send funds to bank accounts in Switzerland and the UK, which he controlled.

The funds were extracted almost immediately, with the patterns of withdrawal suggesting there was no intention to invest on behalf of the clients.

One investor lost $357,000, while in total; Gardner's scheme reeled in $820,000.

The fraud only unraveled in 2005 after other advisers operating in South East Asia became suspicious of the scheme which they knew to be touted around the expat community.

Errors in the documentation, spelling mistakes, oddities in the use of the UBS logo and using private bank accounts for transfer of funds, instead of a UBS account raised adviser suspicions.

A Kuala Lumpar-based IFA sent the Aegis UBS Forex fund material to UBS in Singapore, which raised the alarm to the SFO in September 2005.

Investigators discovered only £97,000 remained of the invested sums, after Gardner blew the rest on a Jaguar plus friends and family.

The jury found the defendant guilty of six counts of Obtaining by Deception and four counts of False Accounting. The judge said Gardner had "hijacked" company names and "recklessly gambled" investors' money.

As well as receiving six years imprisonment, Gardner has been disqualified from acting as a company director for seven years.