Veridicus

Where’s The City Watchdog When You Need It?

FCA takes months to act on warnings over Fabcourt Developments investment scam

The Financial Conduct ­Authority hasn’t exactly been quick to tackle a blatant investment fraud that it was warned about months ago. This scam begins with lead-­generating websites that are promoted through Google Ads and promise “secured regulated FCA bonds” with juicy returns.

There have been at least five sites that are almost identical – www.incomebonds.uk, www.ukincomebonds.com, bestbonds.today, incomeisas.co.uk and incomebonds.co.uk. The FCA has added them piecemeal to its consumer alert list of unauthorised firms, which has little effect because new versions keep appearing. It’s like warning about the bullets but not the gunman, the real culprit behind the sites.

They claim to be trading names of Quadreen Investment Management (UK) Limited and give the assurance of being regulated by the FCA. Quadreen’s director is a 78-year-old solicitor from South London called Hamid Iqbal. I’ve no idea whether he knows about the sites using his firm’s name because I can’t contact Quadreen, which has no website and, judging by its accounts, is not trading.

Quadreen used to be called GB Finance & Management Limited. A Facebook page in this name still exists. It includes a post that might give a strong indication about the sort of work it carried out: “We are pleased to announce that our ‘Introducers’ are earning on average £200-£300 per case as a result of doing business with us. Why don’t you apply to become our valued Introducer and use this platform to top-up your income.”

I contacted incomebonds.co.uk, one of the sham ­lead-generating sites, using a pseudonym and was phoned by a rep for Fabcourt ­Developments Limited called James Walker, who said I could get 8% annual returns by investing in their loan notes.

“We are one of the biggest ­property developers for boroughs and the Government in the UK,” he lied. “We deal in ­affordable housing, ­shopping malls, we buy land and then sell it with planning, last year we had a personal letter from the Government stating ‘we need your company to keep going’.”

He also lied about being covered by the Financial Services Compensation Scheme and insisted the company had assets of almost £140million.

Fabcourt’s sole director, according to Companies House, is 49-year-old Alan Goodban from Enfield, North London, but I wouldn’t put money on him existing. His LinkedIn profile states he left university in 1986, when he would have been 15, if we are to believe the date of birth on Companies House records. Then there’s a 28-year gap until he ­apparently started at Fabcourt in 2014, with no jobs listed inbetween. Despite being the sole director, the website calls him “Head of Operations”.

The photos of two other execs on Fabcourt’s site have been lifted from other websites. The picture of its chief operating officer Michael Donnelly is really a Brussels lawyer called Hendrik Viaene and the chief financial officer Lawrence Simpson shows a dentist in Pennsylvania, USA, called Andrew Kanter.

Fabcourt’s accounts are also a work of fiction, apparently showing funds of more than £139million for the year ending February 28, 2020, while claiming a similar figure for the previous year.

Yet those previous year’s accounts show that it had a mere £1.

One thing that might be true about the accounts is the claim to have a subsidiary called Texmoore Limited. This has an almost identical website and was added to the FCA alert list last May, so it’s bewildering that it’s taken so long for Fabcourt to be the subject of a similar warning.

The brochure that I was emailed claims that investors are protected by a security trustee called Sentor ­Solutions Commercial Limited, which allegedly has a charge of £10million over Fabcourt’s assets and is authorised by the FCA.

The Fabcourt rep James Walker made a lot of this security trustee when he was on the phone to me trying to get me to invest. I asked him if Fabcourt was regulated by the FCA and this is his reply.

“We are but it’s via our trustee, so you are covered by the FCA.

“So to protect our customers we work alongside a private company that overseas everything from start to finish. So when you are sending back paperwork, it all gets checked by those guys, they give it the thumbs up because they are there to insure you.

“Whenever you deal with us, because we are regulated and overseen by this company, they cover you under the FSCS compensation scheme. The director is approved.

“They’ve got a £10million first charge on our company. We’ve got £140million in the bank including assets, of that we have to have £40million available in cash always. Of that £40m they have a £10m first charge which means at any time if they see fit they have the facility to go in and take £10m from our bank account and pay all customers back.

“But there never have been any problems, the business model is fantastic, and it’s completely a regulated entity so from start to finish you are covered for £85,000, in fact you’re covered for £10million but the FSCS cover you for £85,000, Sentor cover you for up to £10million.”

Yet according to Companies House the company that has a charge over Fabcourt is not Sentor Solutions Commercial Limited but Sentor Solutions Limited. Similar name but with a crucial difference: Sentor Solutions Limited is not authorised by the FCA.

Like Fabcourt, its latest accounts are a fiction: in 2018 it filed dormant accounts with assets of just £1 but now claims it really had £96million.

All of which is of more than just academic interest, one online reviewer says she ­represents 12 investors ripped off by this network: “They are not FCA regulated so there is no protection if you invest with them and they defraud you.”

It’s four months since consumer investment campaigner Mark Taber alerted the watchdog to this.

Finally on Tuesday it got around to publishing a warning about Fabcourt itself, which may or may not have had something to do with me asking awkward questions.

Neither Fabcourt or Sentor have replied to me.

I asked Companies House if the accounts filed by limited companies are checked for accuracy.

“We can’t comment on the contents of individual company accounts,” a spokesman replied.

“Where we are made aware of potentially inaccurate of incomplete information, we will contact the company concerned and, if necessary, request that revised accounts are filed.”

The FCA said: “We are unable to comment on operational matters and individual firms.”

It denies that it has a poor record in prosecuting people behind misleading financial promotions, insisting it prefers to prosecute for more serious fraud offences, which carry tougher penalties.

This doesn’t wash wish Mark Taber, who said: “The financial promotions offence comes before the fraud had been committed, so policing financial promotions is policing the gateway to fraud to prevent it from happening and setting a deterrent, much as the police will catch and prosecute people for speeding on a dangerous stretch of road in order to reduce fatal accidents and prosecutions for manslaughter.”

In a separate development, the boss of Google UK has written to the Financial Conduct Authority setting out plans to stop investment fraudsters advertising on the platform.

“With this in mind, late last year we updated our ‘unreliable claims’ policy to restrict the rates of return a firm can advertise and ban the use of terms that make unrealistic claims,” wrote managing director Ronan Harris.

But what counts as an unrealistic claim? This week I came across a Google advert for searchukinvestments.com trumpeting “Up to 8% returns PA”.

That’s vastly higher than high street bank rates, but seemingly not high enough to be weeded out by Google’s new policy.

Mr Harris also claims that Google requires advertisers to submit “personal legal identification, business incorporation documents or other information that proves who they are.”

Really? Another website that was promoted this week by Google ads is bonds-invest.com, which made the vague promise of “high returns”.

I clicked through to its website, which has no company name and the privacy and terms and conditions buttons don’t work. So much for advertisers having to identify themselves then.

The site does have a phone number though, and this matches the number previously used by Compare-investment-options.com, Topukpropertybonds.co.uk, Findtopukbonds.co.uk, compareratebonds.co.uk, compareinvestmentoptions.co.uk and topbonds.net.

All of which are included on the FCA warning list for providing financial services without authorisation.

Seems like Google’s policies for spotting scams have some way to go.

And while I’m on the subject of consumer protection, the Financial Conduct Authority is always advising us to only deal with authorised investment firms.

The problem with this is that there are giant holes in the FCA’s register, as the case of Marche Du Monde Wealth Management proves. This lot have been pestering me to pay them for government bonds with returns of 5%. “We work with leading bond providers and asset managers throughout the UK, this allows us to introduce our clients to the best available rates on the market at any particular time,” they emailed.

Its website marchedumondewm.co.uk gives an FCA number, but is this a case of crooks cloning an authorised firm?

The best way to check would be to contact the genuine firm through the details given on the FCA’s register, but these are lacking a phone number, email address or website.

In fact the register only gives a postal address in France for Marche du Monde, so unless you’re going to go there in person or send a letter and hope they reply, you have got no way of contacting the genuine outfit.

Savers would be much better protected if all the authorised firms had to provide phone numbers and email addresses on the register.

PS My instincts were right, marchedumondewm.co.uk is a clone of a genuine firm and has now been added to the FCA’s consumer alert list. I just hope no one was fleeced before the warning was published.