Four men have been sentenced for running a scam that conned more than 340 investors out of £5.4m ($6.1m, €6.1m).
The fraudsters told their victims they worked for a company called IPR Capital which employed broker firms and sales agents to sell shares in an Ecuadorian gold mine. They also alleged the company had mining rights in the mine, the City of London Police said.
The four individuals are:
- Stephen Todd and Steven Mayne, who were sentenced to two years’ imprisonment, suspended for two years, alongside a 12-month curfew for conspiracy to defraud;
- David Williams, who was sentenced to 12 months in prison, also suspended for two years, with a 12-month curfew for money laundering; and
- John Andrews, who was given a 12-month prison sentence for money laundering.
City of London Police said that Todd was the “brainchild of the scam”, and, as a disqualified director, he provided training for sales agents. Mayne was the actual director and signatory to company accounts.
Williams was a director and also worked in IT at the company, while Andrews was the office manager and was in charge of authorising payments.
The City of London Police said the gold mine scam came to light following a warrant carried out at Kendrick Zale Limited in 2013, which resulted in a number of employees convicted for conspiracy to defraud and money laundering related to the sale of worthless carbon credits.
After the warrants and arrests at Kendrick Zale, the firm sold shares in a partnership which “purported to own the rights to the Chichi gold mine in Ecuador for five years”, the police said.
The shares were sold on behalf of IPR at the initial price of £3,000 for 0.03% and prospective investors were told their money was going to be used to modernise the exploitation methods and that proceeds would be made from the sale of gold.
Victims were promised an overall return of 250% with additional bi-annual revenue.
Some of the early investors received a revenue payment equal to 2.3% of their original investment in March 2013, the City of London Police said. But following a review of the bank accounts held by IPR and five separate escrow agents, the police discovered the money had actually come from new investor funds.
Just 7% of investor money was actually sent to the mine in Ecuador, the police added.
In May 2014, IPR received independent Ecuadorian advice which confirmed the rights were not properly owned by the mining company, which made the partnership null and void.
Yet it continued to promote and sell shares at an increased price – £6,000 per 0.02% – until it was put into provisional liquidation in February 2015, and was then wound up in April 2015.
In September 2019, charges were authorised against the four fraudsters. Mayne, Andrews and Williams pleaded not guilty in February 2020, while Todd was charged in July 2022 and also pleaded not guilty.
But in September 2022, they all changed their pleas to guilty after a four-month trial.
City of London Police financial investigator Hayley Wade said: “This was a long and complex investigation, fraught with challenges, but ultimately the weight of the evidence against the defendants led to late guilty pleas.
“We hope that the sentences will come as some comfort to the hundreds of people who fell victim to this scheme. Officers will now be continuing with the work in this case to try and recoup some of the money lost.”