British expats lost almost £2 million in investment scam that targeted overseas independent financial advisers

Five men have been jailed for running an investment scam through which British expats lost nearly £2 million.

The men used overseas independent financial advisers to attract investments in a supposed commercial property loans business using the name Prudential Commercial Investments, according to the Serious Fraud Office.

They defrauded 56 investors, mostly British expats retired or living abroad, by conning overseas independent financial advisers into persuading their clients to invest money in the business which they claimed would be channelled into a lending scheme for commercial property buyers and reap high returns. Instead, the fraudsters diverted investors’ funds to offshore accounts for their personal benefit.

The fraudsters did not target consumers directly but instead used slick sales material to target IFAs operating in the expat investment sector and then relied on them to pull in business from their established client base.

The SFO said the group's website and its business and sales literature were produced to a high standard to impress both IFAs and their clients and convince them that it was offering a safe and attractive investment opportunity. A number of the victims also thought Prudential Commercial Investments was linked to British insurance giant Prudential, although there was no connection.

The fraudsters also offered IFAs commission of between 4 and 6% and told them it had a five year trading track record, worked with well known and reputable service providers and had a £12.4 million portfolio.
The SFO said the IFAs who agreed to promote the scheme were ‘unwitting pawns in this designed fraud’ but it added that not all IFAs approached were taken in by the group's sales pitch.

The scheme ran between March 2003 and March 2004 and came to an end when West Mercia Police received a tip-off, through the Metropolitan Police, from an IFA in the Far East who thought the scheme was too good to be true.

During the course of the investigation, the SFO and West Mercia Police saw witnesses from around the world, with people travelling from Pakistan, Brazil and the Far East to give evidence at the trial. The SFO sent out more than 50 letters of request to different jurisdictions and received assistance from authorities in a number of countries, including the Czech Republic, Malaysia and Australia.

Two of the defendants, Peter Roope and Gareth Matthews, who were based in Prague and played a key role in persuading IFAs they were offering a genuine investment, both pleaded guilty to conspiracy to defraud. They had both previously worked in the financial services industry and used their experience and knowledge to make the scheme look genuine.

Peter Roope was sentenced to seven years, reduced to four years and eight months because of his early plea, while Matthews was sentenced to six years, reduced to four years because of his plea. Three defendants, Charles Frisby, Douglas Miller and John Roope, were found guilty of conspiracy to defraud at Worcester Crown Court. The jury was unable to reach a verdict on a sixth defendant, David Usher.
Frisby, who was based in Yorkshire and helped to set up Prudential Commercial Investments, drafting its business documents and marketing literature, was sentenced to four years and six months. He worked with Miller, of Nottinghamshire, who produced the group's website and literature and was given a sentence of three years and six months.

John Roope, the twin brother of Peter Roope, who lived in Australia and promoted the group in south east Asia along with Matthews, was sentenced to two years.