Investment group wound up after cheating investors out of £525,000

A bogus investment group has been wound up in the High Court after defrauding investors of at least £525,000, it has been revealed.

The report, published by the Insolvency Service, follows the case of three connected companies who promoted and sold investment into sustainable energy processing schemes.

According to court documents, Elcourt Ltd, trading as AD Baxton, acted as the brokerage service for people acquiring bonds in WSR Hawker Ltd and Devo Group Ltd.

WSR Hawker purported to be collecting used cooking oil from food and catering vendors to convert into biodiesel, while Devo Group described itself as a developer of wind power generation sites.

But concerns were raised in April 2019 after it was discovered that none of the companies had any presence at their respective registered address, sparking an investigation by the Financial Conduct Authority (FCA).

Warning the public, the regulator said it believed that the firms had been providing financial services or products in the UK without authorisation and was targeting UK investors.

On investigation, the Insolvency Service found that the firms had already cheated at least six investors out of £525,000.

Commenting on the case, Irshard Mohammed, Senior Investigator at the Insolvency Service, said: “All three companies fraudulently tricked people into investing in so-called safe and environmentally-friendly businesses.

“However, any trading presented by these companies appears to have been entirely fictitious and from the £525,000 worth of investments we know about, no returns have been received.”

The FCA added: “We strongly advise you to only deal with financial firms that are authorised by us, and check the Financial Services Register to ensure they are. It has information on firms and individuals that are, or have been, regulated by us.”

All three companies were wound up in the public interest on 9 June 2020.

Seamus Smyth, Partner at Carter Lemon Camerons, said: “The basic advice is: do not invest in things you don’t understand. Avoid anything glossy or fashionable, such as ‘energy-saving’ or ‘environmentally friendly’, in particular.

“It’s important to do some due diligence. In these cases, the investors didn’t even check that the ‘broker’ was authorised, or if the companies were actually at their registered offices.

“If you can’t do the due diligence, pay someone else to do it, it could save you £500,000. Money spent on advice before you part with your cash is always a very good investment!”

Seamus Smyth is our Head of Litigation and Arbitration. His practice is primarily commercial with an emphasis on arbitration, financial services and work for South African and Italian clients.

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