in UK

Why does the Serious Fraud Office not take action on carbon credit scams?

Tweet about this on TwitterShare on Google+Share on FacebookShare on LinkedInShare on StumbleUpon

“The Serious Fraud Office is an independent government department, operating under the superintendence of the Attorney General. Its purpose is to protect society by investigating and, if appropriate, prosecuting those who commit serious or complex fraud, bribery and corruption and pursuing them and others for the proceeds of their crime.”

That’s what it says on the SFO’s website anyway. Surely, then, the SFO must take an interest in the large number of companies in the UK that are selling carbon credits as investments?

Apparently not.

In March 2013, Mark Hoskin, a Partner of Chartered Financial Planners, Holden & Partners wrote about carbon credit scams, under the headline, “The Voluntary Carbon Credit scam goes on”. The opening paragraph goes directly to the point:

The carbon credit floor introduced by the UK government in April 2013 of £16 does not apply to Voluntary Carbon Credits. Today I was called by a man who had invested £140,000 into Voluntary Carbon Credits. He wanted to know how to sell these now. There is no way to sell these. They are not investments. He has lost £140,000!

Hoskin’s blog post is an excellent overview of the carbon credit scam and includes some advice for people who have been scammed, and for people on the receiving end of phone calls offering investment advice:

[T]here is no secondary market in voluntary carbon credits. So if you have bought them already accept that you have lost all the money and register the tax loss. Voluntary carbon credits are not investments. After you have done this register a complaint with the SFO [Serious Fraud Office] and they might ask you for an interview. Do your civic duty, swallow your pride and stop these people and companies ringing up other unsuspecting people on the phone. Oh and then beware, your number is probably now in circulation for other scams. My client was then rung up by a supposed broker promising him listed shares at cut prices. This too was a fraud and he lost that money too. Beware… don’t trust people who ring you up on the phone to sell you ‘investments?’, even after you go to their supposed London offices to talk to them. If you do you will just be another person sucked in by a scam.

But when Holden wrote to the Serious Fraud Office, he got a reply from someone calling themselves “Intelligence Unit”, who told Holden that, “this is not a matter that falls within the remit of the Serious Fraud Office and no further action will be taken by us”:

Dear Mr Hoskin,
 
Thank you for contacting the SFO and for the information which you have provided.
 
After consideration of the information you have provided we have concluded that this is not a matter that falls within the remit of the Serious Fraud Office and no further action will be taken by us. That is not to say that the matter you have reported is any less important or any less distressing for you as a victim. It is essential that suspected offences are investigated expeditiously and our intention in informing you that this is not a matter for the SFO is to reduce the delay in it being brought to the attention of the appropriate organisation.
 
Should you wish, you may want to consider reporting this matter to Companies Investigations.
 
Companies Investigation Branch (CIB) which is part of the regulatory arm of the Department for Business, Innovation and Skills (BIS). Although CIB is located within the Insolvency Service, an Executive Agency of BIS, it is not limited to companies that have become insolvent. In fact, most of its investigations are into companies that are actively trading. Under the Companies Acts, CIB have the power to investigate companies and although they do not carry out criminal investigations their investigations may provide the basis for a subsequent criminal enquiry. The CIB would usually refer matters to us if on the information available to them they found that there is serious or complex fraud that the SFO should look at. Further details about the CIB are found on the following web page:
http://www.bis.gov.uk/insolvency/Companies/company-investigation
 
Please note that if you wish to complain about a company, the CIB’s preferred method is to complete the online Complaint Form which is found on the above web-site. Alternatively CIB’s contact details are as follows:
 
Companies Investigation Branch
Ground Floor
21 Bloomsbury Street
London WC1B 3QW
E-mail: enquiry@cib.gsi.gov.uk
Tel: 0845 601 3546 (Please note CIB cannot accept complaints by telephone)
 
You may also wish to contact the Financial Services Authority by completing their online form. Please refer to the attached link to their website.
 
http://www.fsa.gov.uk/pages/doing/regulated/law/alerts/form.shtml
 
http://www.fsa.gov.uk/Pages/Doing/Regulated/Law/Alerts/index.shtml
 
You may wish to report this matter to Action Fraud – It is the UK’s national fraud reporting centre. It provides a central point of contact for information about fraud. The service is run by the National Fraud Authority – the government agency that helps to co-ordinate the fight against fraud in the UK. Their online fraud reporting service http://www.actionfraud.org.uk/report_fraud is available 24 hours a day, enabling you to report a fraud and find help and support. They also provide help and advice over the phone through the Action Fraud contact centre. You can talk to their fraud specialists by calling 0300 123 2040.
 
You can now forward on scam emails you receive to Action Fraud at email@actionfraud.org.uk
 
Thank you
Intelligence Unit

No wonder Private Eye calls them the Serious Farce Office.

On 15 August 2013, I wrote to the Serious Farce Office to ask why carbon credit scams are not within the remit of the Serious Fraud Office, but answer came there none.
 

Tweet about this on TwitterShare on Google+Share on FacebookShare on LinkedInShare on StumbleUpon

Leave a Reply

20 Comments

  1. Excellent article Chris, and what a disgrace! No wonder that scammers feel free to go about their business in the UK without worry of being rounded up by the authorities. To what degree (in terms of numbers) do people need to be scammed by carbon credit fraud before the authorities sit up and take notice? Is the situation any better/worse in other countries? Maybe you should write to Action Fraud to see if they are doing anything about it.

  2. Unfortunately this is typical of the response from the authorities we rely upon for bringing criminals to justice. The SFO has brought a number of major cases which it failed to win in court. If this isn’t ‘Serious Fraud’ then what is?

    In fact one could argue that what it says on the SFO website is itself misrepresentation.

    I have written twice to my MP and had written responses – the second time from the department responsible (Sajid Javid). What they spend most of the time telling me is what I already know: there is a problem with companies selling VERs; there are not part of the certified (CER) market; they are not covered by the FCA as regulated investments etc etc. In other words they tell me what they can’t do but very little on what they are doing. Unacceptable. Keep writing and keep complaining and demanding action from those whose job it is supposed to be to protect us from fraudsters.

    Otherwise hang out a massive sign. The UK: OPEN FOR BUSINESS FOR FRAUDSTERS AND CONMEN

  3. The UK is the global centre for carbon boiler room scams. That is the reputation is has now.

    Australia has the Australian Securities Investment Commission that conducts surveillance operations. No boiler room could operate here and get away with it.

    It is just a matter of legislation. The issue needs political representation.

  4. MH Carbon is being investigated by the MET.Police Fraud Squad. Investigating Officer; DC A J Bailey Unit SC09. They are gathering information and interviewing suspects so I am told. I am sure that any further information from victims would be welcomed.

    With regard to comments listed earlier, recommending the reporting of fraud cases and scams to the FCA, it is worth noting that when one does that they immediately point out that Carbon Credit Trading is not an area that is covered by legislation and is non regulated, and so is not part of their remit.

    However, the banks are all FCA registered, and the banks basically facilitate the frauds that are taking place by allowing unscrupulous persons, who very often have a criminal history, to open and operate these Ltd. Company Bank accounts. It is due to a lack of due diligence and rigour on the part of the banks, in my opinion, that such accounts are allowed to be opened, and as a result of which, elderly trusting investors are being defrauded of their life savings.

    The banks need to be carrying out thorough background checks on all individuals, applying to open the account, they should be establishing how long the company has been trading, what the purpose of the trade is, and if it is an investment company, or a company set up to receive investors funds, then the bank should insist upon a client account being set up, from which funds can only be transferred to the intended investment project, and not used for the day to day running of the business, paying wages etc.

    The banks should then monitor the transactions in order to ensure that monies are not being misappropriated. They have a duty under their Code of Conduct, to report any suspected Money Laundering activity, and if they do not, then they can be fined.

    Limited Company accounts are able to be set up too easily with Companies House, they do not even require a home address from the Directors. They do not require any trading history either as a sole trader or a partnership, before applying, and are immediately afforded the protection of limited liability with no personal guarantees. They then operate for twelve months, after which they close the company down and disappear with the money, which often is transferred offshore.

    This can not be right, and legislation needs to be introduced to tighten things up, and to stamp out this rampant criminal activity, which is leaching away much of the hard earned savings of the country.

    My recommendation to begin with, is that all of you who have suffered at the hands of these fraudsters, should write to the FCA and to complain about the procedures used by the bank that processed your funds, procedures for vetting the operators of the bank account, and for not monitoring the banking activity of the account so that they were fully aware of what was going on. Every bank should have a full understanding of the operation of the businesses that they are supporting, otherwise they are liable to become complicit in the frauds that are being perpertrated by their clients.

    Demand from the FCA that they investigate the operations of the banks, demand to know just what questions were asked of the individuals opening the account. Do they have copies of Passports, Did they check residence history over the last three years, did they have a face to face interview with a senior manager, Did they gain a full understanding of the operation of the business, Did they monitor transactions so that they could see if a pattern was taking place or if there was a posiibility of the misappropriation of funds, Did they insist on the setting up of a seperate Client Account, Did they carry out a Voter’s Role search, Did they carry out a credit check. All these questions and more, need to be asked of the bank, and the FCA should be asking these questions at a face to face interview.

    The Bank’s vetting procedures, clearly need to be tightened up, and there needs to be a high degree of rigour employed in the application of those procedures, so that the criminals are denied the facility of Money Laundering through the major banks.

    Ultimately, the Treasury needs to be informed of these practices, and it is for them to introduce appropriate legislation that will tighten up and prevent the establishment of scam companies, and the use of the Banks as a conduit for processing their ill-gotten gains.

    Pick up your pens and your computers now, and start writing.

  5. ***********Blink and you might have missed it*************
    This morning on the BBC2 radio 2 news at 8am, there was an report warning small private investors about about a finacial scam involving carbon credit mis-selling. It breifly explained what carbon credits were, and how the market and prices have recently collapsed. It said that over 1000 people (mainly the elderly) have been scammed into parting with a total of £24 million (that’s an average of 24k each!) and that the Insolvenct Agency has so far closed 19 companies operating this scam.

    The news item was repeated verbatim a few minutes later on BBC radio 4 (as thier news slot is slightly longer and always lags radio 2), but the report was not repeated at 9am.

    It looks like that finally this scam is getting the brief coverage(!)and attention it deserves. I urge people to relentlesly report the bastards like Murdoch and Chase who phoned me the other day peddling their carbon credit scamming bullshit.

  6. @Milan C (#5)

    Also mentioned on the Guardian website today.

    Strangely, it only talks about CERs, which must be a mistake. Still, it’s a start…

  7. I bought £18000 of CER in 3 trades from Eco Global Markets which has gone into liquidation. The liquidated found that all accounts were bungled together so there was no way of finding what an individual investor had. Also the account where the money was stored was only accessed by one director! No trade is possible as Eco were the sole way of trading.
    A scam!! if not criminal it must be close to it.

  8. I am yet another victim of the Carbon Credits scam, investing a substantial amount in the notorious MH Carbon, money which it now appears I’ve lost to fraudsters. I’ve been approached by several companies offering to sell my VERs and rejected their offers. The latest is the most plausible, a company calling itself dresdeninvestments.com and purporting to be able to sell my holding at some loss but with a reasonable return in the circumstances. The operation allegedly involves selling to corporate buyers for them to offset losses against tax. Does anyone know of this company and is it yet another scam operation, as seems most likely, or is this a feasible way to redeem at least some of my losses? Grateful for any comments.

  9. @Jeremy Lane (#9) – Dresden Investments is running a Recovery Room scam. No reputable company would cold call you. Once you’ve been scammed into buying carbon credits (or rare earth metals, coloured diamonds, land banking schemes, worthless shares, or whatever) you will be contacted by other firms offering an exit strategy – for a fee. This is the “Recovery Room” part of the scam.

    Dresden Investments is not registered by the German Federal Financial Supervisory Authority and there is no record of a company called Dresden Investments being registered anywhere on Open Corporates. (Details here.)

  10. Chris, thanks for your reply ref Dresden Investments.

    I’ve received confirmation of my holdings of carbon credits (VCUs) from a company called MH Carbon Nominees Ltd, which states that, unlike MH Carbon, it “has not gone into liquidation”. The listing of my holdings appears to be accurate. MHC Nominees states that the holdings were originally on the CDC Register, which closed in December 2012, and they are to be submitted to “APX and/or Markit to decide if they are in agreement to hold these credits on their directory” A list of other “suppliers/guardians is also in MHC Nominees’ letter. Also enclosed with their letter is a letter to MHC Nominees from CDC Climat R&S in Paris providing a list of projects registered with them, which include those in which I invested and stating that “The VCUs listed in the statement will be recognized by VCSA, and respectively by APX and Markit, for the credits issued in their registry, in accordance with the last inter-registry reconciliation dated December 1st 2012.” I’m wholly unclear what this all means, other than apparently moving carbon credits around between registries/custodians. It at least appears to acknowledge that carbon credits I purchased still exist and haven’t vanished into the ether. However it presumably holds no promise of any return on these purchases. I’d be very grateful for any light you can throw on this. (I’ve received a confirmation of custodianship from Gemmax Solutions with reference to another small purchase of VCUs. From what you say about Gemmax I shouldn’t be holding my breath about this either, I guess.) cheers, Jeremy

  11. I left a message on this blog in Nov 2013. The scam from Eco Global markets now seems complete in the fact that no one is getting their money back. The official report by the liquidator finds several fraudulent practises but still no action taking place. I now have a company elite-assetexchange wanting to sell my credits provided I buy some more!!
    Please give your opinion on this latest company

  12. they are the absolute scum of the earth. what a sad world after 2 world wars when valiant people gave their lives to foster such trash

  13. Hi,

    To Buying and selling of voluntary carbon credits i use the carbonpeer.com platform.

    Carbonpeer.com is the first and largest international trading system for voluntary carbon credits. Safe investments with digital certificates.

    With the future of an international climate agreement still in flux, governments worldwide are turning to markets for voluntary carbon offsetting to engage private sector.

    An American Express card is available to worldwide FREE. It?s a safe, easy way to manage spending every day. You can use the Card at millions of locations around the world: in stores, online and at ATMs. The Carbonpeer Amex Card has no recurring fees. Unlike many other cards, you keep more of your money in your wallet?where it belongs. Open an account Free in carbonpeer.com

    Open an account free.
    Sign up com Jeff refid. Thanks

  14. @Jeff Mayell – Sounds a lot like carbonbookers.com (which has now disappeared). Both companies registered in Costa Rica. Comments about carbonbookers.com and carbonpeer.com appeared on REDD-Monitor shortly after the company was created. Both comments came from someone with an IP address in Brazil.

    Here’s the comment about carbonbrookers.com and here’s my response.

    Carbonpeer’s website was registered on 30 March 2015. Just like carbonbookers.com, the website features transparently obvious nonsense. Like this:

    “Invest in carbon credits now

    “Carbonpeer is the first and largest international trading system for voluntary carbon credits.”

  15. I was sold £60,000 of VCR being told, Government will set price at £16.00 per credit in next few months. A barefaced lie. VCR’s purchased between 43 & 76 pence are then sold by scammers for £6.50 each. They do not tell you that you cannot sell them, many excuses about firms operated by Paul Seakens not responding to requests about setting up a ‘Trading Floor’. Blue Horizons Ltd. website says ‘Guaranteed Returns with possibility of capital growth. Blue Horizons was the seller, now pushing Storage Pods and car parking space. Guy telling me he was Sean or Shaun Williams from Oswestry interested in shooting and everything to do with me gave me a mobile no. which was not in service, he conned me for £33,000

  16. has anyone been approached by Goldberg Management offering to buy carbon credits think another scam ? ? ?

  17. @rosemary oates (#17) – Goldberg Management is a scam. No legitimate company would contact you out of the blue with financial advice. The company wants an upfront fee, and they claim to be able to sell your carbon credits, even though they are worthless.

    There are two other discussions about Goldberg Management following comments on REDD-Monitor, here and here (click on the links and scroll down the comments to see the discussions).

  18. I am 70yrs old and bluehorizons ltd have swindle me of all my savings even cash for my funeral i was pressured into buying cer units and investing in wine by a person named David Henly he would be on the phone for at least 1hr telling me my money was safer invested with him and i would get a better return,he even rang me as late as sept 2015 asking me to invest more cash i understand they were forced into liquidation by the economic crime team.

  19. @jackie parsons (#19) – I’m very sorry to hear about this. Blue Horizons Trading Ltd was one of the companies shut down in the High Court earlier this month, following an investigation by the Insolvency Service:

    Another 19 carbon credit boiler room scams bite the dust. Including (not before time) Carbon Neutral Investments

    The companies scammed £36 million from retail investors. Three years later, the Insolvency Service has succeeded in closing down some of the companies involved. The money is still missing. In March 2013, the Financial Conduct Authority has issued a statement about Carbon Neutral Investments, but it’s not done much more than that. The Serious Fraud Office hasn’t (as far as I’m aware) changed its position that carbon credit investment scams are “not a matter that falls within the remit of the Serious Fraud Office”.