Kevin Kirkwood and Gary Quillan headed KJK Investments, while Gregory Garrett was the director of G Loans.
They ran a pension liberation scheme, which allows individuals to access their pension funds before age 55.
Clients could borrow money from G Loans provided they invested their existing pension in KJK Investment shares.
The value of the investment tended to be twice the sum of loan received.
KJK promised up to 6% annual return on the shares.
The client’s pension would then be used to repay the loan once they retired.
The trio managed to ‘liberate’ £11.9m ($14.6m, €13.3m) over 30 months from 209 individuals.
The high court was told that KJK loaned around half of the sum to G Loans on uncommercial terms, meaning that clients were basically borrowing their own money.
Add insult to injury
Around £900,000 of the remaining funds were used to pay sales commission, with just under £500,000 paid out in director salaries.
The remaining roughly £4.6m was loaned to other companies, also on uncommercial terms.
But the directors failed to follow tax advice, which resulted in clients being charged as much as 55% tax on the money received.
The liberation scheme was uncovered by the Insolvency Service; which, following an investigation, wound up both companies in April 2015.
Presiding judge Araba Obodai called the scheme a “house of cards”.
Kirkwood was given a 10-year ban, while Quillan and Garrett have been disqualified for 12 years each.
Alex Deane, chief investigator for the Insolvency Service, said: “None of the directors expressed any real regret for deliberately misleading people who were mainly small pension investors, and who were targeted because they were unable to get credit and required cash.
“Pension liberation is being widely promoted as an easy way of gaining early access to pension savings.
“Any schemes offering such benefits should be viewed with caution and independent financial advice should always be sought before entering into such a scheme.”
This was only one of such schemes investigated by the Insolvency Service.
In August 2016, it shut down five firms that managed to defraud £128m from investors.
A year later, the service worked with the Spanish tax authorities to tackle pension liberation fraud worth £120m; while, in 2018, two fraudsters were jailed for conning 16 victims out of nearly £1m.