Bankrupt couple take in £7.8 million in property scam

Investment Scams:

These scams abound and property, it would seem, has more
than its fair share of these frauds. Glossy brochures, slick looking websites
and smooth talking sales people lure unsuspecting investors with tempting high
interest and capital returns.

The usual warnings should always apply: if it looks too good
to be true, it usually is. When most savings accounts are paying no more that 1
to 2% interest, claims of up to 8 or 10% are wildly optimistic, and for a
passive investor, largely unattainable.

Investors should ALWAYS do thorough due diligence checks before investing in any project, or pay a professional to do this for them. Check out companies and their accounts with Companies House, do credit checks with a good reference agency, check out individual directors – bankruptcies, court judgements and criminal convictions will often show up on-line with a quick Google search.

Request detailed accounts to assess potential profits, visit the development and talk to local agents to assess values and seek testimonials from previous investors who have had experience with the company concerned. Always search the Bankruptcy and Individual Insolvency Register and Companies House.

So, in the above case, enter Stroud based declared bankrupts
Matthew and Charlotte Roberts who set up an extremely and exceptionally
complicated investment scam which lured numerous investors to part with their
hard earned savings totalling £7.8 million

The High Court has now wound up thirteen companies set up by
the couple who managed to sustain this highly sophisticated scam over a considerable
period of time. The thirteen companies were wound up by the High Court in the
public interest following investigations by Company Investigations of the
Insolvency Service.

The companies all traded from one address in Stroud and were
all set up by husband and wife team Matthew and Charlotte Roberts, who are both
bankrupt. They had targeted high net worth individuals and ‘sophisticated
investors’ for two projects and succeeded in raising at least £7.8 million.
Insolvency Service investigators are now seeking to track down funds and assets
but have warned a significant amount of the money may not be recoverable.

David Hill, chief investigator with the Insolvency Service,
said,

I am very pleased to see that the Court has called a halt to
the unscrupulous activities of these companies. The Insolvency Service will
continue to investigate and bring to a halt the activities of companies harming
or about to harm the public by operating in this way.

The companies have shown no regard for the law.

The 13 companies purported to be involved in two projects.
11 were concerned with a project to acquire and convert a former convent in
Woodchester, near Stroud in Gloucester, into a hotel and music venue. The
remaining two companies were involved in a second project to acquire and develop
a property in Norway to create an ‘eco resort’.

The Matthews raised at least £7.8 million from private
investors who were told their investments would be fully asset backed with the
companies in which they purchased shares acquiring ownership of various land
and buildings at the two sites. In fact none of the land, or buildings was
found to be owned by the companies in which investors had invested.

Investors were invited to buy preference shares in a number
of companies with a particular purpose in defined project on the promise of
annual returns from 10% and guaranteed buybacks up to 150% depending on the
length of the investment term which could be between one, three or five years.
They were then told that their investment was high risk and having certified
themselves as either ‘high net worth individuals’ or ‘sophisticated investors’,
they would have no access to the Financial Services Compensation Scheme.

Both Matthew Roberts and Charlotte Roberts are bankrupt. The
former has been bankrupt since 3 September 2014 and his discharge has been
suspended. The latter was made bankrupt on 25 August 2016 and her discharge is
also currently suspended

In respect of the UK project (“The Convent Hotel & Spa�)
the Court heard that the site of the former convent had been acquired by the
Roberts and/or HH Property 4 Limited, a company under their control, in May and
June 2013, through the use of bridging loans secured against the properties.

In the first phase of fund raising investors were encouraged
to buy shares in Special Purpose Vehicle (“SPV�) companies, again controlled by
the Roberts and which each owned a single share in BBH Property 1 Limited. In
subsequent fund raising phases investors purchased shares directly in BBH
Property 2 Limited, Crowdseed3 Limited and Crowdseed4 Limited. In total some
£5.8 million was raised from investors in the UK project.

Investors were told their funds would be used to enable the
purchase by those four companies of various buildings at the Convent site thus
providing security for investors by shared ownership of the companies that
owned the buildings free from debt. The investment companies would then lease
the buildings to hotel operating companies and receive a dividend based on the
rent received by the companies plus a guaranteed buy back of their shares at
125% of investment after 3 years or 150% after five years.

Investors were given comfort that their monies would be paid
into solicitor client accounts and held in escrow and only released when
adequate security was in place. This did not happen and funds were released by
solicitors on the directions of the Roberts and large sums were applied for
other purposes, or purposes that the investigators could not identify.

The Court saw evidence that, save for one set of buildings
known as The Barns, none of the properties were ever transferred to the
investment companies as purported would happen in the brochures and other
documents provided to investors. The Barns, which the investigators found to be
derelict outbuildings, were subsequently transferred by BBH Property 1 Limited
to Thornley Property Stroud Limited without the investors’ knowledge leaving
the investors without any security at all.

Thornley Property Stroud, which was used by Mrs Roberts as a
personal management company and latterly as the hotel operating company, is
recorded as having paid £300,000 for the purchase of the Barns from BBH
Property 1. However; the investigators found no evidence that any such
consideration was ever paid by Thornley Property Stroud for The Barns.

BBH Property 1 Limited was incorporated on 11 December 2014,
registration number 08675992. The registered office of the company is at The
Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire, GL5 5HS.

BBH Property 1 Limited was incorporated on 11 December 2014,
registration number 09012571. The registered office of the company is at The
Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire, GL5 5HS.

Crowdseed3 Limited was incorporated on 15 September 2014,
registration number 09217756. The registered office of the company is at 54
Mallorie Park Drive, Ripon, N Yorkshire, HG4 2QF.

Crowdseed4 Limited was incorporated on 30 January 2015,
registration number 09415203. The registered office of the company is at 54
Mallorie Park Drive, Ripon, N Yorkshire, HG4 2QF.

HH Property 4 Limited was incorporated on 02 April 2012,
registration number 08016267. The registered office of the company is at The
Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire, GL5 5HS.

Convent (Stroud) Limited was incorporated on 15 September
2015, registration number 09778052. The registered office of the company is at
The Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire, GL5 5HS.

Roomco Limited was incorporated on 03 September 2014,
registration number 09200891. The registered office of the company is at The
Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire, GL5 5HS.

Convent Live Limited was incorporated on 15 September 2014,
registration number 09218722. The registered office of the company is at The
Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire, GL5 5HS.

Thornley Property (Stroud) Limited was incorporated on 25
April 2014, registration number 09011046. The registered office of the company
is at The Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire,
GL5 5HS.

Netgiglive Limited was incorporated on 20 November 2012,
registration number 08300688. The registered office of the company is at The
Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire, GL5 5HS.

Music Show Limited was incorporated on 21 November 2016,
registration number 10489610. The registered office of the company is at The
Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire, GL5 5HS.

In respect of the Norway Project (“The Convent in the Hills
Investment�):

Convent in the Hills Limited and Covent in the Hills 2
Limited were companies used to raise investment to purchase and develop land in
Norway to create an eco resort.

There were two elements to the development the first was a
proposal to build a central hotel and 224 houses on a plot of land. Funds were
raised by The Convent in the Hills Limited and were used to purchase five plots
of land in Mr and Mrs Roberts’s names, only one of which had planning
permission and was subsequently transferred into the ownership of a subsidiary
company of The Convent in the Hills being Convent in the Hills AS

Convent in the Hills AS is a Norwegian company and is
currently subject to an insolvency process in that country.

The plot was purchased from Mr and Mrs Roberts for NOK 5
million (Norwegian Krona), being the same price that they had paid for all five
plots in the previous year. The Court accepted the evidence that a significant
proportion of the monies raised was paid to Mrs Roberts, or to companies, or
individuals with whom she was connected, including paying expenditure
apparently unconnected with the Norwegian Project.

The Convent In The Hills Limited was incorporated on 3 June
2014, registration number 09068955. The registered office of the company is at
The Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire, GL5 5HS.

The Convent In The Hills2 Limited was incorporated on 23
July 2014, registration number 09144068. The registered office of the company
is at The Convent, Convent Lane, South Woodchester, Stroud, Gloucestershire,
GL5 5HS.

The winding-up petitions were presented under s124A of the
Insolvency Act 1986. The Official Receiver was appointed as provisional liquidator
of the companies on 10 August 2017 by Mr Justice Roth, a Judge of the Chancery
Division of the High Court.

Company
Investigations, part of the Insolvency Service, uses powers under the Companies
Act 1985 to conduct confidential fact-finding investigations into the
activities of live limited companies in the UK on behalf of the Secretary of
State for Business, Energy and Industrial Strategy.

The Insolvency
Service, an executive agency sponsored by the Department for Business, Energy
and Industrial Strategy (BEIS), administers the insolvency regime, and aims to
deliver and promote a range of investigation and enforcement activities both
civil and criminal in nature, to support fair and open markets. We do this by
effectively enforcing the statutory company and insolvency regimes, maintaining
public confidence in those regimes and reducing the harm caused to victims of
fraudulent activity and to the business community, including dealing with the
disqualification of directors in corporate failures.

Bankruptcy and Individual Insolvency Register

Companies House – Company Information

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