Financial Conduct Authority wins High Court case against Capital Alternatives

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In February 2014, the UK’s Financial Conduct Authority won a case in the High Court against two investment schemes promoted by Capital Alternatives and other firms.

The FCA accused the firms of “promoting and/or operating collective investment schemes (CISs) in the UK illegally and without our authorisation”.

Judge Nicolas Strauss QC ruled that the schemes were collective investment schemes:

“I declare that all the schemes under consideration are, and have been since their inception, collective investment schemes within the meaning of Financial Services and Markets Act.”

The fact that the investment schemes were not authorised by the FCA means that they were operating illegally.

The FCA took out the case against the companies and individuals in July 2013. The case focussed on two investment schemes:

  • African Land (also known as Agri Capital) which offers investments in rice farm harvests in Sierra Leone, and is operated by African Land Limited.
  • Reforestation Projects (also known as Capital Carbon Credits) which offers investments in carbon credits generated from land in Sierra Leone, Brazil and Australia. It is operated by Reforestation Projects Limited.

The full list of defendants is as follows:

  1. Capital Alternatives Limited
  2. Capital Secretarial Limited
  3. Capital Organisation Limited
  4. Capital Administration Services Limited
  5. MH Trustees Limited
  6. Marcia Hargous
  7. Renwick Haddow
  8. Richard Henstock
  9. African Land Limited
  10. Robert McKendrick
  11. Alan Meadowcroft
  12. Regency Capital Limited
  13. Reforestation Projects Limited
  14. Mark Ayres/Eyres
  15. Mark Gibbs and
  16. The estate of David Waygood.

REDD-Monitor wrote about the hair-raising background of some of these companies and individuals in August 2013.

In a statement on FCA’s website, Tracey McDermott, FCA’s director of enforcement and financial crime, said:

“The FCA has an objective to protect consumers and enhance the integrity of the financial system. The Court’s ruling contributes to us achieving both. Collective investment schemes are complicated and investors put their money into the operator’s hands with no real control over what happens to their money. This ruling shows that even if operators have deliberately tried to structure their scheme to avoid regulation, the court will still look at whether those operating the scheme should in fact be regulated for consumer protection.”

Judge Strauss granted permission for African Land and Reforestation Projects’ Australian carbon credit scheme to appeal the decision. However, he rejected appeal pleas from Reforestation Projects’ Sierra Leone and Amazon carbon credit schemes.

In a statement on its website, African Land confirms that it will appeal:

African Land are pursuing an appeal to the Court of Appeal and have today obtained permission to do so. African Land is confident that its appeal will succeed. In the meantime Yoni Farm remains operational. Pending the appeal, African Land have agreed, at the request of the FCA, not to make any returns to investors either from rice harvests or land redemptions.

As journalist Andrew Penman at The Mirror points out, African Land made the bizarre claim that the High Court ruling was a victory:

“The FCA’s case against African Land was, in effect, presented as a fraud case. The underlying implication and tone of the FCA’s case was that the scheme was a sham. The African Land scheme has now been found to be a legitimate business.”

The reality, Penman writes, is that the court heard that the company sold more farmland to investors than it actually owns. “This is not a comfortable situation,” Judge Strauss commented. “Purchasers of some 4,300 acres have so far received no return and most of them still have no land allocated to them.”

Capital Alternatives, which marketed the scheme for African Land, took a 50% cut of the money invested. The money invested would therefore have had to double for investors just to break even. To sell the land, Capital Alternatives was advertising “Projected returns up to 175% in over five years.”

On its website, the FCA explains that the High Court ruling that the defendants were operating the collective investment schemes unlawfully means that the Court could order the defendants to pay compensation that can be passed on to the investors.

First though, investors have to wait for the appeal hearing and any remaining aspects of the case that still need to be ruled on by the Court. The FCA states that,

The FCA has explained to investors in each of the schemes that they do not need to take any action at this stage regarding the FCA’s case. At present, the previous undertakings and injunctions obtained by the FCA in July 2013 remain in place. Further information will be provided to affected investors when it is available.

Judge Strauss will rule on who will pay the FCA’s legal bill of £423,000 at a future hearing.


PHOTO Credit: Capital Alternatives’ stall at the UK Investor Show 2013.


UPDATE – 6 March 2014: Andrew Penman works at The Mirror. Capital Alternatives’ PR firm, City Road Communications, seems to think this is an important piece of information. Here’s more from City Road Communications.

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42 Comments

  1. i was duped into buying into the australia project by capital alternatives. can you please advise what action i should take given this ruling? Thanks!

  2. Can someone please answer some or all my layman questions:
    Do or don’t I have an investment with Capital Alternatives & carbon credits?
    If Yes who is looking after it?
    If No do we know if the FCA will help in getting some of the funds back?
    Is Capital Alternatives Palm oil worth anything, it’s not mentioned in any of the schemes and no payments or contact?
    Basically I get the feeling that I am £35K down, not bad when you consider one of the directors mentioned above can take more than this per month to cover his expenses so the say the courts and is selling African logging.

  3. If Cap Alternatives lose their appeal, will the court order them to pay back investors like me? Would they have the funds to do so?

  4. I invested £20,000 in the Gola carbon credit. Can anyone let me know what the process is to recover some or all of these monies, now that Capital Alternatives have lost the court case?

  5. @nik (#1) – On its website, the FCA makes the following statement:

    The FCA has explained to investors in each of the schemes that they do not need to take any action at this stage regarding the FCA’s case. At present, the previous undertakings and injunctions obtained by the FCA in July 2013 remain in place. Further information will be provided to affected investors when it is available.

    If you are not already in contact with the FCA I would suggest getting in touch with them – click here for their contact details. I would also recommend getting in touch with Action Fraud and Crimestoppers:

  6. @Tony (#2) – I assume you have handed over money to Capital Alternatives in exchange for carbon credits. I don’t know where your carbon credits are, or even whether they exist. Sorry. But even if you did know where they are, the trouble is that there is no secondary market for voluntary carbon credits. Which means that they are very difficult to sell.

    This presentation by Andrew Ager (ex-head of carbon and emissions at Bache Commodities) to the City of London Police is a very good explanation of why voluntary carbon credits are not a suitable investment.

    On its website, the FCA explains that,

    As the Court has ruled that these are collective investments schemes which the defendants were operating unlawfully it may order the defendants to pay compensation that can be passed on to the investors. (emphasis added)

    But before that can happen we have to wait for any appeal hearing and its outcome.

    I don’t know anything about Capital Alternatives’ palm oil investments, I’m afraid.

    I would recommend getting in touch with the FCA, Action Fraud and Crimestoppers – see comment (#5), above.

  7. @XYZ (#3) – On its website, the FCA explains that the Court may order the defendants to pay compensation that can be passed on to the investors. Whether the defendants have the funds to do so is the £16.9 million question. You can check the financial status of the companies on the DueDil.com website – Capital Alternatives currently has liabilities of £357,200, for example.

    I would recommend getting in touch with the FCA, Action Fraud and Crimestoppers – see comment (#5), above.

  8. @Andrew White (#4) – See comment (#6). Once the court has heard the appeal, the Court may order the defendants to pay compensation that can be passed on to the investors.

    Please get in touch with the FCA, Action Fraud and Crimestoppers – see comment (#5), above.

  9. Could someone please provide some detail about the Australian projects? An acquiantance just got contacted about “investing in Gippsland” but didn’t give me any more detail. If they’re using the Australian Carbon Farming Initiative, the project should be listed here: http://www.cleanenergyregulator.gov.au/Carbon-Farming-Initiative/Register-of-Offsets-Projects/Pages/default.aspx – and I can’t see it.

  10. Does anybody know where Capital Alternatives are. They have 3 different addresses in correspondence , each with the same phone number never answered. I went to the county court to get my money back. CA did not even respond so I was given judgement to get my 37.5K back even before the high court decision. The Bailiffs are finding the gentleman from CA difficult to track. If any of them are out there perhaps we can arrange a time to meet the bailiffs. Please feel free to arrive by Aston Martin or helicopter.
    All of this does not make sitting tight look an attractive plan.

  11. I have invested a lot off money though these people concerned, will I ever get my money back,112,500 to African rice land and 75,263 to QGI(prime)ltd,as due to ongoing court case I don’t know what to expect this was my frozen pension though a company I worked 4r all my life am I being conned

  12. Hi Samuel

    Not sure who QGI are (or were).
    If you invested thro a SIPP and/or financial adviser. you have a better chance than the rest of us of recovering some money. You should check out Regulatary Legal who have posted on some blogs.

  13. I am from Australia. I’ve invested $58,850 with Capital Alternatives in Rice, Carbon Credits, and Palm oil. I’ve received no returns yet. Can you please tell me, am I going to lose all my money, or there is a hope? Can you please advice me what to do?

  14. @Tamara Socratous (#14) – I’m sorry to hear about this. I’m afraid I can only repeat the advice given in comments (#5), (#6), and (#7) above. If you have not already done so, please get in touch with the FCA, Action Fraud, and Crimestoppers – see comment (#5) for contact details.

  15. Tamara
    Capital Alternatives in Australia have reinvented themselves as Velvet Assets (they have a website).
    Hope this helps – The same chap Geoff Woodcock is running it

  16. I am from Australia, a retired school teacher/church minister, age 77, and I too appear to have been duped. I am stupid and gullible as it is not the first time that I have been taken down. However, this is the most serious of all as it was for $115,000. My wife and I lost more than half our life’s saving in the 2008 crash and this was by far our biggest investment. I happened to see about it just at the time when we had a large amount of cash. The salesman was XXXX XXXX and much of what he told us was simply not true, but I believed him. (He has since been dismissed I understand.) My wife and I are both devastated by this loss as there is no way that we will ever be able to make it up. We both worked hard all or lives (particularly her at her teaching – first to school in the morning and last to leave at night) and now for this to happen to us it is almost more than we can bear.

    [R-M - 15 May 2014: The name of the salesman has been deleted from this comment.]

  17. Can someone tell me more about Geoff Woodcock? Does anyone know more about him and velvet assets? I invested in palm Oil, Wheat and Rice and haven’t received any returns yet and they keep making excuses, and Geoof Woodcock appears to be the ringleader in all this but won’t take any calls on it. Does anyone have more info i can take to the authorities?

  18. Investment transparency

    ATTENTION TO ALL CLIENTS OF CAPITAL ALTERNATIVE AND VELVET:
    > LEN, TAMARA, JOE and anybody else.

    I know many of the details surrounding the comments above and much more. I choose to remain anonymous for now. for anybody wanting more in depth information write an email to: investmenttransparency@gmail.com

    Capital Alternatives Australia was run by the same director, Geoff Woodcock as Velvet Assets. his name may not have been on the directorship, but its the same guy, who is also in partnership (splitting profits/investor money) with Renwick Haddow (google his name for more info). Many inconsistencies began arising mid 2013. Companies in due diligence documents were seemingly just fabricated, and logos were lifted from other companies. Parties in the wheat investment were contacted by brokers at the company and the company had absolutely no idea who capital alternatives or velvet where. A huge amount of money didnt reach the rice investment and there was a legal battle to resolve this. There was much more.

    There was a 2-3 day period where roughly 7 brokers both junior and senior all quit and walked out. The brokers did not wish to partake in something which had so many inconsistencies. To address Len above, I know this broker personally and what you have been told from velvet about the circumstances of him leaving is absolute utter rubbish, he left because things arose that didnt make sense, and when he confronted the director he was told he was just a salesman, it was none of his business, above his pay-grade, and to get back on the phone. He left very shortly after this. If you wish to speak with him Len, I know he would be more than happy to talk to you. leave your phone number or email in a comment and I will pass it on to him.

    Every single product promoted by capital alternatives as “unique products by unique promotors”, it is now seemingly obvious as returns are late, and nothing is paying out that these were all run by friends and assosciates of the top Capital Alternatives UK director. “Patsies” names may have been used on directorships to protect certain people, but it appears nothing was unique.

    No products promoted by Capital Alternatives nor Velvet Assets have EVER paid capital back to our knowledge.

    We have made direct contact with companies claimed to be involved in the wheat investment. They have absolutely no idea who velvet or capital alternatives are. We suspect the wheat project does not exist. The FIRST returns are now almost 6 months late.

    Palm Oil which is apparently a fixed return, is also 6 months late.

    Before the brokers walked out, returns were paid on time, after they left and the money flow into the investments was stagnated, they werent. Money flow into investment should not affect payouts. Whilst there is no proof as yet, it certainly smells like ponzi. Who knows perhaps its all just a co-incidence that the returns for 4 are all non-existent now.

  19. Thanks – really appreciate your detailed information. I invested in Cap Alternatives African Land scheme (Sierre Leone). If the UK courts order Cap Alt to repay investors, how many cents in the dollar/pence in the pound are we likely to receive? Or do you think the money is all gone? Thanks!

  20. Further to the above – I initially dealt with Laura Hunt, later I was passed to Jack Bone and finally to Moses – sorry forgot his surname. Are these names familiar to readers?

  21. I dont believe its the brokers in this case to take aim at, rather they’re directed to sell by people like Renwick Haddow and Geoff Woodcock. I also know they’ve now setup in Dubai under Platinum Commodities, so beware ANYONE looking at this as a possible opportunity. Also beware of VELVET ASSETS in Australia. These guys are scammers through and through. They put on fronts like it is all upfront and honest and its just lies and they don’t care who they con. Haddow and Woodcock, Mark Eyres etc are the true criminals here.

  22. I posted my comment on 9th May and since that time I have been contacted by a number of people involved in this matter. Therefore I need to correct a couple of statements that I made. One of my sentences read-

    “The salesman was XXXX XXXX and much of what he told us was simply not true, but I believed him. (He has since been dismissed I understand.)”

    I inadvertently named the salesman involved but his name has now been replaced by the XXXX XXXX. I stand by my statement that much of what he said was not true, but I will now add that he was passing on to us the situation as he understood it and thought it to be. Secondly I was told by those who are currently running Velvet Assets that he was dismissed, but I now believe that this is not true – the truth is that he and a number of others, resigned when they discovered some of the true facts about the company.

    What has become clear to me is that this is indeed a murky business and that I have very little hope of recovering much of my money. I hope that I am wrong – but I think not.

  23. Sadly Len I think that you are right. However, all the action so far has taken place in the UK. Marcia Hargous, one of the guilty defendants, is Australian and it is believed that she is back in Australia. There needs to be some action taken in Australia to get a judgement against the guilty parties over there. Eventually one of them is going to break ranks and tell the truth in order to get a lighter sentence. It may even have started already. It isn’t really acceptable for brokers to claim they are innocent parties unless they have gone to the authorities and made a statement. To my knowledge only one broker in the UK has done that. Whilst the FCA have not prosecuted the brokers that does not mean that investors will not mount their own prosecutions. There are several legal options available to investors which are likely to be followed if there is a shortfall for investors. Prosecuting brokers is one of those options. Innocent brokers would be co-operating with the authorities, guilty ones will be keeping their heads down.

  24. Hi Len and others

    I believe that brokers/salesmen that duped us all are now posting on this site – either to get us to invest more or alleviate their plight. It seems strange that all has gone quiet since Court Watcher posted. All investors need to keep remembering that we got duped cos we are trusting and we need to beware of anyone who was ever associated with any of these firms. Everyone one of them were out to dupe us and if they haven’t given evidence to the authorities they are out to dupe up AGAIN !! – Even if it is just to save their own skin.

  25. Investmenttransparency is not answering enquiries to the email address he/she has supplied. This invitation to communicate with an anonymous individual, who apparently has more information, appears somewhat suspicious.

  26. Bit sad – this was a place where we who had been duped could come together – I do hope it hasn’t been hijacked by people who were selling dud goods BUT, by the silence that now prevails, I think it might have been. Investors should NOT give up, if you feel shy of posting here because of what has gone on recently there are other sites, but you can still post here and ignore those that as always promise things they were never going to give. I was pleased to see Australians joining us but it appears that the sellers of this s… go to them.

  27. HERE ARE 3 MORE CON MERCHANTS TO WATCH OUT FOR

    RONNIE DU BOIS ( CAPITAL ALTERNATIVES )
    KEVIN PRIOR ( WAS GOING UNDE5R A FIRM CALLED ( CARBON CENTRAL )

    AND HIS SIDEKICK GIOVANNI OLIVA.

    ALL THREE OF THEM ( TOO SWEET TO BE WHOLESOME )

    THE FCA & ACTION FRAUD HAVE THE DETAILS ON THEM.

  28. Anyone who has had any dealings with Capital Alternatives or Velvet Assets should read a new article called We Harvest You Profit. Its mainly about the rice investment but no doubt the wheat or CCs are probably similar
    The article and press release are
    We Harvest You Profit
    http://www.oaklandinstitute.org/publications
    Happy (?) reading

  29. Pls learn more and educate the others by downloading new information at http://www.oaklandinstitute.org/we-harvest-you-profit.

  30. I invested in 2 lots of palm oil with Capital Alternatives and like everyone else have not been paid my dividends.
    I have now been approached by Platinum Alternatives who have said that they will transfer 50% of my palm oil holdings to Voiptel and as for the other 50% of my holdings, that too will be transferred if I give them another cash outlay to the value of the 50% of the holdings. They have promised a return of 9% annually paid monthly on the total amounts and my capital returned in 18 months.It all sounds too good to be true and I just smell a rat somewhere.
    Has anyone been offered the same deal?

  31. Have any of you invested in AgriFirma Capital Limited’s
    (AFCL) wheat farm? I’ve and I am a victim. AgriFirma Capital Limited (AFCL) is closely associated with Capital Alternatives. Managing director of AFCL is Richard Henstock; who is also one of the board members of Capital Alternatives.

  32. @ Too trusting (Post #31) I have been offered a similar deal. I didn´t have an opportunity speak with Platinum Commodities yet though. The letter I received didn´t have a name and date on it. Which bank´s letter of credit were you offered? Do you know VoIP Tel is registered in Russia? We can kiss our money goodbye once it enters Russia.

  33. Does anyone know if this Vodacom which sells VOIP time is a legitimate business? It has an address in Bulgaria which sounds a bit suss. There is a solicitor’s letter of guarantee. All phoney?

  34. Hi
    Yes you should smell a rat.
    You say Platinum Alternatives have contacted you. I have hears of Platinum Commodities, an offshoot of Capital Alternatives. Did you get a letter and do you have a contact name?

  35. I think Vodacom is a name Vodaphone use in South Africa. This is definitely not vodaphone!!!

  36. Richard Henstock and Co have appointed liquidators.
    It is very IMPORTANT that investors make contact with the liquidators ASAP

    Resolutions for Winding-up

    AGRI FIRMA CAPITAL LIMITED
    (Company Number 07692576 )
    Registered office: 23-24 Westminster Buildings, Theatre Square, Nottingham, NG1 6LG

    Principal trading address: Mayfair House, 124 New Bond Street, London, W1S 1DX

    At a General Meeting of the members of the above named Company, duly convened and held at The Holly Bush Inn, Holly Bush Lane, Priors Marston, Warwickshire, CV47 7RW on 09 July 2014 the following resolutions were duly passed as a Special and as an Ordinary Resolution:

    “That it has been proved to the satisfaction of this meeting that the Company cannot, by reason of its liabilities, continue its business, and that it is advisable to wind up the same, and accordingly that the Company be wound up voluntarily and that Anthony John Sargeant, of Bridgewood Financial Solutions Ltd, 23-24 Westminster Buildings, Theatre Square, Nottingham, NG1 6LG, (IP No. 9659) be and he is hereby appointed Liquidator for the purposes of such winding up.”

    Further details contact: Tel: 0115 871 2926.

    Richard Henstock, Chairman

  37. On one hand I feel sorry for most off you people, but I know Geoff and have met him a few times, he goes around the world finding gullible young boys whom he promises riches as long as they sell air by putting pressure on the clients. None of his investments exist. He refuses to be a director for any of his firms because that way nothing goes back to him. Geoff is part of a group of English con artists who are targeting retirees in Australia , New Zealand and Dubai. Geoff Woodcock should be in jail. On another note if you are too stupid to invest money in people you have never heard about then maybe you deserve this

  38. I have had the same offer as To Trusting. I have invested about $67000 in this scam and they are trying to get more out of me.

  39. Hi Tom

    I am from the UK and loads of us have been duped too.
    Don’t for one minute think we don’t feel very stupid – we do. That is probably why so few of us are squaring up to these crooks whilst the FCA and SFO in UK just look to get them for a collective and score brownie points. At some point the investors even a few of us (as stupid as we are) will get these b……s

  40. @Tom: Victims have already lost a lot of money. The last thing we need is to be criticised for being naive and gullible.

    Action fraud doesn’t seem to take any notice of our complains despite the compelling evidence we provided them. FCA has also clearly let us know that they won’t take any action for the time being against Capital Alternatives for their Australian land schemes.

    People like Richard Henstock have walked away with investors’ money time after time. Why don’t you criticise the authorities for being reluctant and sending us discouraging replies instead of taking action in public interest? Don’t you believe it’s high time these crooks were arrested?

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