The Serious Fraud Office (SFO) has charged former Ethical Foresty Ltd directors Stephen Greenaway, Paul Laver and Matthew Pickard with fraud in relation to a collapsed scheme where 3,500 UK investors lost millions of pounds.
All three directors have been charged with two counts of conspiracy to commit fraud by false representation and one count of fraudulent trading.
They will appear at a hearing at Westminster Magistrates’ Court on 28 June, before the case is tried at crown court.
For over eight years, Ethical Forestry Ltd operated tree plantations in Costa Rica and sold investments in fast-growing hardwood saplings on their sites, offering a return once the trees were grown, logged and sold. According to the Insolvency Service, it attracted 3,500 UK investors who collectively put around £70m ($88.6m, €81.9m) into the venture.
The unregulated investment scheme collapsed in December 2015 after it was abandoned by its UK directors and the plantation suffered hurricane damage, triggering an investigation by the SFO. Investigators heard from hundreds of savers who lost their savings and found most of them used funds from their self-invested personal pensions (Sipps), using providers such as Liberty Sipp.
Lisa Osofsky, director of the SFO, said: “We delivered justice for over 10,000 victims of complex investment fraud in 2022 and we won’t stop fighting this threat. This company’s abrupt collapse impacted thousands of British savers and pensioners. We could not have brought this case without the many victims who bravely shared their experiences; we are grateful.”
Bans and tax dodge
This comes years after Pickard, managing director and founder of Ethical Forestry, Greenaway, who was appointed co-director, and Laver, who was appointed as a director in November 2009, were banned from acting as directors for six years.
In 2012, the directors entered Ethical Forestry into a tax planning scheme, which made £28.8m available to them through loan accounts. The company’s financial statement for 2012 to 2014 shows that more than £19m was withdrawn during this period.
In 2013, HM Revenue & Customs informed the Ethical Forestry it was going to investigate the tax planning scheme. This did little to deter the directors, however, and £7.2m of the £19m was withdrawn after the taxman made it known the firm was in its crosshairs.
This triggered an investigation by the Insolvency Service, which announced the bans on 8 May 2019.
In August 2017, International Adviser reported that investors were being urged to make claims for compensation on the grounds that their original investment could have been mis-sold.
Many were introduced to Ethical Forestry via unregulated investment brokers, such as Avacade Investment Options, which offered free pension reviews.