A solicitor is among five people jailed this week for their role in £6m fake investment schemes.
The group of fraudsters ran two bogus schemes – including one for a litigation finance vehicle – and coerced more than 150 victims to pay in.
City of London Police began a money laundering investigation in August 2016 after receiving information that large and unusual payments had been made by a company called Sable Intl Ltd to a newly-incorporated law firm, MR Finch.
Sable had launched a £3.5m corporate bond scheme offering 7% returns on investments in distressed property. This scheme was linked to an earlier entity called Equitable Law Capital, registered in Lancashire, that specialised in litigation funding and promised high fixed interest returns.
But neither company was generating returns and instead money was used to repay other investors and shared among the group.
David Clarkson, 70, from Blackburn, was described in court as the ‘controlling mind’ behind the fraud and used a front company based in the Seychelles and Switzerland to launder funds stolen from both schemes. Solicitor Mark Fallon was involved in laundering funds from one of the schemes through his law firm.
Both ELC and Sable entered administration and voluntary liquidation at the end of 2016. They owed a collective total of over £4m.
Victims, many of whom were elderly and/or vulnerable, lost life-changing sums of money. One woman said she was ‘hounded’ into making an investment, while others claimed to have been befriended by those involved. A number of victims died during the course of the investigation, including one elderly woman who invested £80,000 into ELC which had not been recovered.
Detective Constable Jay Smith from City of London Police’s specialist operations team said: ‘These fraudsters stole life savings from hundreds, abusing their trusted positions out of pure greed. Clarkson, in particular, showed no remorse - cloning a regulated insurer and impersonating the broker to trick victims and later forging medical documents to avoid trial.’
Clarkson pleaded guilty to all charges including conspiracy to defraud, money laundering and perverting the course of justice at an earlier hearing. He was sentenced at Southwark Crown Court to seven years and six months in prison.
Fallon, 60, from Rossendale in Lancashire, was found guilty of conspiracy to defraud and money laundering and sentenced to four years and six months in prison.
He remains on the roll and is listed on Companies House as a director of MR Finch Limited, dissolved in January this year, and Legal 4 Ltd, a company based in Bury.
He was fined £25,000 by the Solicitors Disciplinary Tribunal in 2021 for his involvement in a funding arrangement that bore the hallmarks of a dubious investment scheme. In 2016, Fallon’s firm MR Finch received more than £1m from Sable International Finance Limited, according to the tribunal ruling.
