Developer who turned Caribbean dreams into nightmares in £226m fraud | Crime
Essex businessman David Ames lured investors with the promise of a Caribbean dream, but the £226m fraud he perpetrated has left thousands in the nightmare of losing their savings and pensions.
Thanks to glossy brochures, clever marketing events and the power of attracting celebrities, including former sports stars such as tennis player Pat Cash, golfer Gary Player and footballer Andy Townsend and the Liverpool football club, he persuaded people to invest in off-plan holidays. cabanas and apartments across the Caribbean and in Brazil.
Ames, 70, who was twice bankrupted through businesses selling garden furniture and windows, and had timeshare experience, set up the Harlequin Group, an international network of development companies of resorts, in 2005. By the time the company entered administration in 2013, it had sold 8,200 units at seven resorts.
The problem was that less than 200 units were built and they were all in the same complex, Buccament Bay in St. Vincent and the Grenadines, which was the only one of the seven that Ames managed to build. When it collapsed, Harlequin faced a £1.2billion shortfall.
As a self-proclaimed “very charismatic” Harlequin chair, Ames believed he was a “visionary”, but was described as a “Walter Mitty-type figure”. He was in charge of the day-to-day management of Arlequin, with his wife, Carole, and son Dan, as directors. Another son, Matthew, who in 2014 was jailed for three years for a fraudulent carbon credit investment scheme, handled the marketing.
The family have become £6.2million rich from the Harlequin business, enjoying a luxury lifestyle by flying to and from the Caribbean, with Ames employing his own chauffeur. Some family members were paid £10,000 a month, the Series Fraud Office said. Ames was even trying to build his own airline, Harlequin Air, to fly guests to and from the then nonexistent resorts. His wife and sons have not been charged with any offence.
Ames was convicted by a jury on August 3 on two counts of fraud by abuse of position after a five-year SFO investigation that began in 2012. The charges covered the period from 2010 – not 2005 , the date on which Harlequin was created. — because at that time the state of the business was such that he must have known it was putting investors at risk, the court said.
In 2011, Ames was advised by restructuring and insolvency practitioners that he could negotiate while insolvent. But he didn’t stop selling. In fact, it increased sales. By the time Harlequin collapsed, its aggregate losses were £398 million.
The SFO argued that Harlequin’s business model was fundamentally flawed. Investors paid a booking fee of £1,000 and a 30% deposit, half of which was for the costs of Harlequin and the relevant vendors, with the remaining 15% for construction.
Investor funds were not earmarked for particular resorts or properties, but spent throughout Harlequin Corporation. Ames never obtained external funding, so its operation was entirely dependent on new funds from investors. To build one unit, you had to sell three of them. It became a type of pyramid structure – which grew exponentially. Only 28 out of more than 8,000 investors have ever bought a unit.
Ames used 2,000 to 3,000 intermediary sales agents, some of them earning commissions of up to 10% of the purchase price, the SFO argued. He also used a network of Independent Financial Advisors (IFAs) who were incentivized with 10% commissions with no claw back, even if the investor later dropped out.
Investors advised by an IFA were able to claim a total of £125m through the Financial Services Compensation Scheme. However, the remaining half of investors – many of whom put in money from their self-invested personal pension (RSPP) – lost thousands of dollars. Among the victims are many pensioners, now forced to work until retirement. Some investors only got back a penny or two for every pound they invested.
They were attracted to Ames’ charismatic placements at high profile sales events at golf clubs, conference centers and exhibition centers across the UK. Harlequin’s call has been strengthened by stars such as Wimbledon champion Cash, who was to approve tennis academies at resorts, Player, a nine-time winner of major golf championships who was said to have had to design a golf course at a resort that would not was ever built, and, according to Harlequin’s promotional YouTube video, Liverpool FC, believed to be associated with football training at the stations. Ames had a corporate box at Wembley Stadium. Senior Caribbean politicians were also persuaded to support the project.
Ames did not testify at his trial, but blamed Harlequin’s failure on his accountants, who he said were negligent, and his Irish building contractors, ICE, who he said blamed him. fraud. He also blamed a “Harlecon” website set up to raise concerns about the company, as well as the global economic crisis, tougher SIPP investment regulations and the SFO’s investigation into it.
Said to be extremely litigious and who has threatened legal action against investors who made complaints public, as well as the BBC for its reporting on Harlequin, Ames sued ICE and accountants Wilkins Kennedy.
Harlequin paid ICE $52m (£45m) to build the Buccament Bay resort, without a written contract or detailed scope, monitoring or evaluation agreement. In 2013, ICE boss Padraig (Paudie) O’Halloran was ordered by an Irish court to pay 1.57 million euros (£1.38 million) in damages to Ames for embezzling Harlequin funds from his personal bank accounts.
There was ‘compelling’ evidence, the judge heard, that O’Halloran had diverted other substantial sums from Harlequin to items unrelated to Buccament Bay, including the purchase of a private jet, a racetrack in Saint Lucia, expensive gifts, including a $65,000 diamond ring for his girlfriend. , a career and renting an expensive mansion in Barbados.
In separate civil proceedings in London, Ames alleged negligence by Wilkins Kennedy, whose partner Martin MacDonald was allegedly too close to O’Halloran. A High Court judge awarded Ames $11.6 million, just half of the amount claimed in damages, due to Ames’ contributory negligence, and also ordered the amount to be placed on a escrow account, which can now be used to reimburse investors.