Sami Raja, along with four others, mis-sold carbon credits to unsuspecting victims via two companies, Harman Royce and Kendrick Zale, between January 2012 and August 2013.
How the scam worked
Homeowners over the age of 55, living in affluent post codes, were cold-called by brokers from Harman Royce and persuaded to invest in voluntary emission reductions (VERs), a type of carbon credit.
Between January and October 2012, 130 victims were charged between £5.26 and £6.50 per carbon credit, totalling a loss of £1.5m ($1.9m, €1.7m).
Evidence from an independent consultant suggests that the real trading price for carbon credits at this time was between 25p and 30p. It also confirmed that VER carbon credits do not have a secondary market and, as such, the profits projected by Harman Royce of between six and 100% over four months to 10 years were false.
The money paid into the Harman Royce bank account was used in many ways. This included paying staff wages and buying luxury items, including an Aston Martin worth £33,000 and a £4,000 watch.
Similar tactics were used by Kendrick Zale.
Victims reported receiving unsolicited phone calls from Kendrick Zale, which used high-pressure sales techniques to persuade them to invest in certified emission reductions (CERs); another type of carbon credit, at an inflated price per unit.
In many cases, investors were persuaded to cash in individual savings accounts (ISAs) or sell existing shares with reputable companies.
Between May and August 2013, Kendrick Zale was found to have sold over 300,000 carbon credit units to 28 individual investors, totalling £900,000.
Senior investigating officer Hayley Wade, of the City of London Police’s Fraud Squad, said: “The set-up of Kendrick Zale just months after clients of Harman Royce had been defrauded shows the callous nature in which these fraudsters operated.
“Raja cruelly targeted often elderly individuals with the intention of defrauding them of their life savings. He clearly felt no remorse for their actions, closing one company, only to set-up another and commit the same offences.
“The custodial sentences imposed will hopefully go some way to deterring others from committing such offences.”
Four other men were sentenced in relation to this case in September 2018, as follows:
Michael Nascimento – pleaded not guilty and was sentenced to two years for each of the three counts of money laundering to run concurrently. He was convicted on 13 February 2018. As a result of the offences investigated by the FCA, he received a sentence of 11 years, meaning his total sentence is 13 years.
Sandeep Dosanjh – pleaded guilty to two counts of conspiracy to defraud and was sentenced to four years and six months for each count to run concurrently.
James Lanston – pleaded guilty to two counts of conspiracy to defraud and was sentenced to two years and three months imprisonment.
Charanjit Sandhu – pleaded guilty to two counts of conspiracy to defraud and was sentenced to three years. As a result of Sandu’s offences that were investigated by the FCA and other law enforcement agencies, he received a total sentence of nine years.