Latest news with #investmentFraud
Fox News
11-07-2025
- Business
- Fox News
Georgia man accused by SEC of perpetrating Ponzi scheme says he takes 'full responsibility' for his actions
The U.S. Securities and Exchange Commission filed a complaint against Edwin Brant Frost IV of Georgia and his First Liberty Building & Loan, LLC, alleging the business was operated as a Ponzi scheme. The document asserts that Frost and his company "raised at least $140 million from approximately 300 investors through the sale of loan participation agreements and promissory notes that offered annual returns of 8% to 18%. "As of 2021, approximately 80% of interest and principal payments to investors were sourced from new investor funds, and not from Bridge Loan interest payments or principal repayments," the SEC complaint claims. The SEC alleged Frost spent investor funds in various ways, some of which included making more than $570,000 in political donations, buying a $20,800 watch and making "over $2.4 million in payments to credit cards issued to him and his business entities." The Associated Press indicated that Frost is a Republican. "The promise of a high rate of return on an investment is a red flag that should make all potential investors think twice or maybe even three times before investing their money," said Justin C. Jeffries, associate director of enforcement for the SEC's Atlanta regional office, according to a press release. "Unfortunately, we've seen this movie before — bad actors luring investors with promises of seemingly over-generous returns — and it does not end well." Lawyer Joshua Mayes of Robbins Alloy Belinfante Littlefield LLC is representing Frost in the matter, and he provided Fox News Digital with a statement from Frost, who admitted he had misled people. "I take full responsibility for my actions and am resolved to spend the rest of my life trying to repay as much as I can to the many people I misled and let down. I will be cooperating with the receiver and federal authorities and ask that everyone allow the receiver time to sort things out and do his best to repair the damage I created," Frost noted in the statement. "I would like to apologize personally to those I have harmed, but I am under restrictions which prevent me from doing so. While I do not deserve it, I am grateful for the support of friends and family as I confront this situation I created."
CNA
07-07-2025
- Business
- CNA
S$1.5b nickel fraud trial: Accused swindler Ng Yu Zhi declines to testify, defence closes case
SINGAPORE: Ng Yu Zhi, the businessman at the heart of an alleged nickel investment fraud involving almost S$1.5 billion (US$1.17 billion), declined to testify in his case on Monday (Jul 7). Ng, 38, who ran Envy Global Trading and Envy Asset Management, chose to remain silent and accepted that the judge could draw an adverse inference from his choice to do so. He made this decision after speaking with his lawyers for under an hour on Monday morning. Defence lawyers Hassan Esa Almenoar and Nichol Yeo had no other witnesses to call, and the defence closed its case. Both the prosecution and defence are to file their closing submissions on whether or not Ng should be convicted, with a verdict to be given later. Lead prosecutor Gordon Oh said he had discussed the matter with the defence and it would be "preferable" to have the verdict on Aug 22. Judicial Commissioner Christopher Goh took note of that but said he would give the verdict date at a later time in case of any further developments or queries he may have. Ng went on trial in November facing 42 charges, including forgery, handling benefits from criminal conduct, cheating, fraudulent trading and criminal breach of trust. He has another 66 outstanding charges, but these were stood down or set aside for the time being while this trial goes on. THE CASE The prosecution's case is that Ng attracted hundreds of investors over five years from February 2016 with his companies' purported physical nickel trading. They said Ng was the scheme was Ng's "brainchild", but the nickel trading was "fiction" that he conveyed to investors either personally or through his sales representatives. Alleged victims of the scheme include lawyers and a venture capitalist, who testified about how he was "impressed" by Ng. Ng then lived lavishly on the proceeds of the fraudulent scheme, alleged the prosecutors, withdrawing at least S$201.2 million from Envy Global Trading to his personal bank accounts. He spent it on expensive artworks, property, cars and jewellery, charged the prosecutors. Over six years, Ng's companies received a total of S$1.46 billion in investments from 947 investors. Of this, about S$482 million was channelled to Ng's personal bank accounts. Ng was initially on bail running into the millions, but he was remanded after breaking bail conditions by allegedly committing fresh offences. His latest request for bail was rejected by the court last week.
The Guardian
29-06-2025
- Business
- The Guardian
‘He left us with nothing': the British investors swindled by a German property firm
'He took everything, left us with absolutely nothing,' says David Middleton, one of thousands of British and Irish investors who racked up huge losses from the collapse of a German property ponzi scheme. The 72-year-old pensioner from Northern Ireland is referring to Charles Smethurst, the German-British businessman who set up Dolphin Capital in 2008, later renamed Dolphin Trust, then German Property Group (GPG), with 200 affiliated companies. In July 2020, the business filed for insolvency, owing more than €1bn to up to 25,000 investors around the world. Smethurst was convicted this month of 'serious fraud' and sentenced to six years and 11 months in prison by a regional court in Hildesheim, in northern Germany. As part of a plea bargain, he admitted to four of 27 counts of commercial fraud, filed against him by the Hanover public prosecutor's office last October, for total damages of €56m. The other charges were dropped in return for his confession to speed up the trial, which was due to run into August. Dolphin's glossy brochures promised readers double-digit returns for investing their money in a scheme that pledged to restore historic buildings across Germany – including the ruins of castle Dwasieden on the Baltic Sea island of Rügen – and turn them into luxury apartments. However, few were ever restored. Investors were mainly from the UK, Ireland, France, Singapore and South Korea and included financial institutions and individuals, many of whom lost their pension pots or other savings after regular interest payments dried up in 2019. Smethurst's fraud conviction related to €60m in investments made by the French fund manager Horizon AM, including €30m in the Pariser Strasse project in Berlin. The court heard that the building was never bought, but the funds were used by Smethurst's company to meet other obligations. He served a prison sentence for fraud between 2000 and 2003 in an unrelated case. Horizon said it was 'led to believe we were partnering with an experienced and reputable real estate developer' as Dolphin provided the firm with 'highly detailed due diligence documents' and sent regular reports wrongly suggesting projects were 'progressing as planned'. The investor was not aware of Smethurst's previous fraud conviction. 'According to findings from the insolvency administrator and the criminal investigation, a significant portion of the funds was diverted abroad to jurisdictions with strict banking secrecy, notably the British Virgin Islands and possibly the Cayman Islands,' Horizon said. 'These jurisdictions do not cooperate with European authorities, which means that the money trail goes cold. This illustrates the systemic failure of cross-border cooperation in cases of fraud, and why victims like us are left without meaningful recourse. 'We are still wondering where the money went, what remains, and whether it is still possible to recover anything to compensate Horizon and its investors.' UK individual investors told the Guardian they are angry, and fear that Smethurst will be released early for good conduct and recover the hidden funds for himself. Middleton and his wife, Janet, invested in Dolphin in 2015: his pension lump sum of £100,000 and her inheritance of £120,000. Their financial adviser, the late Alastair Hooks, told them it was low-risk and supported by the German government, Janet Middleton recalls. 'To be honest, I was nervous about it and strongly stated that as pensioners we could not afford to lose this amount of money, but again we were assured there was no risk.' After Dolphin filed for insolvency, Hooks did not return their calls, and the couple discovered he had unregistered from the Financial Conduct Authority (FCA) in 2012. She says they have explored every avenue – even as they dealt with David being diagnosed with bowel cancer – but have not recovered any of their investment. Janet says Smethurst's sentence 'seems very lenient to me … Smethurst may well serve his sentence and even get early release for good behaviour while other people like David and I now serve a sentence in our retirement economically'. A former NHS nurse, she says the couple had been looking forward to a comfortable retirement but have had to budget their outgoings; they have not had a holiday in years and both drive 20-year-old cars. The Hildesheim court said it did not order Smethurst to make any payments to investors because it could not establish that he had personally siphoned off any funds. Justus von Buchwaldt, of the law firm BBL, the insolvency administrator who testified in June, subsequently said: 'I fear that this is only the tip of the iceberg. It is still unclear if other people were involved in this large-scale fraud and where most of the investments ended up.' Of an estimated €1.3bn of investments received by the property company, about €800m is missing. The Hanover prosecutor's office said it had investigated other company officials but could not find evidence of any wrongdoing. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion It is one of Germany's biggest investment scandals since the second world war, and the German authorities have been criticised for being slow to intervene, even though the property company stopped filing financial accounts in 2015. Alison Moncrieff-Kelly, 63, a freelance musician from Kent and former director of the Rye arts festival, was a Dolphin investor. She said: 'This seems a pathetically small price for Smethurst to pay for such heinous and convoluted levels of crime. Where's the money gone is the big question … and six years 11 months doesn't touch the sides.' Most of the listed buildings acquired by GPG were never redeveloped and left derelict. Von Buchwaldt at BBL has sold 20 of 75 properties so far, for more than €87m, and has yet to distribute the proceeds to investors. Those sold include castle Dwasieden, a listed former brewery in Bad Aibling in Bavaria and a period villa in Fürstenberg/Havel in Brandenburg. The property sales are expected to take years as the legal situation is often complex. Almost 8,000 creditors have filed claims with BBL against the collapsed property group, out of an estimated 15,000 to 25,000 investors globally. Von Buchwaldt has said BBL would work with the UK's FCA, Serious Fraud Office (SFO) and Financial Services Compensation Scheme (FSCS). Debbie Kay Randles, 67, invested £25,000 in Dolphin in 2015 and, like others, has also lost money in other investment schemes. She paid £6,000 to a financial claims company in an attempt to recover her Dolphin investment, but 'they just disappeared'. She even enlisted a private detective to track down the claims firm. 'It's just been an absolute ongoing nightmare,' she says. 'I've not got a lot left, so I'll just keep working, probably until I'm 75, and then retire.' A former TSB employee, she now works for a window blinds business and lives in York. Moncrieff-Kelly says the trial 'doesn't address this issue of how incredibly badly regulated financial affairs are in the UK … I don't know if it's happening so much in any other country in the world.' She points to the 'middlemen' – financial advisers who are typically paid commission of 20% to 30% and 'kept that money' despite 'selling a fraud'. She invested in Dolphin after her financial adviser suggested it. Moncrieff-Kelly has recovered about half her £80,000 investment – money she inherited from her late mother – from the FSCS, with the help of a claims company that took the other half as payment. The FSCS says it has paid compensation to more than 1,900 customers in relation to Dolphin/GPG investment products, and a further 150 people have open claims. Compensation may have been triggered in relation to unsuitable financial advice that customers were given. It says it cannot put a figure on the compensation paid because it includes payouts for other investment losses. The SFO declined to comment while the FCA said it could not comment on individual firms. 'People don't understand the trauma and the damage that [fraud] has done,' says David Middleton. 'People think [with] white collar crime, slick City crime, there's no victim. There is a victim.'
Yahoo
28-06-2025
- Business
- Yahoo
The hunt for Britain's ‘Wolf of Wall Street'
When Ben was convinced by a financial adviser to visit a swanky new trading floor at the top of a City of London skyscraper the Heron Tower, he couldn't believe his luck. Staff promised him returns of 60pc a year if he invested, and told him that the business – Capital World Markets (CWM) – was run by a 'Svengali-type individual who was hugely well-connected'. It sounded to good too be true. That's because it was. On the surface, Anthony Constantinou – the 'Svengali-type' – had made a fortune in a remarkably short amount of time. He had all the trappings of success, spending £600,000 on just six months rent for a home in London, as well as £427,000 on private jet trips, £2.5m on his wedding in Santorini and more than £70,000 on his son's first birthday party. Luxury cars lined the driveway of his rented Hampstead home. But there was one problem: the cash was coming from a multimillion-pound Ponzi-style investment scam, which relied on ordinary savers like Ben to buy into his story. Earlier this month Constantinou, 41, was ordered to pay back £64m or spend 14 more years in prison for his large-scale fraud, but police have no idea where he is. A death certificate filed last year stated that he died of a heart attack while in Guadalajara, Mexico, but investigators have since claimed that some of the documents contain inaccuracies, according to Bloomberg. CWM only operated from late 2013 until early 2015, but in that time captured hundreds of victims. Most were lured through word of mouth, with those who introduced people receiving a cut of the funds – a classic Ponzi trick. Before it all unravelled, prospective investors were told that they were putting money into 'risk-free' transactions on the foreign exchange (FX) markets, usually for a minimum investment of £100,000. In reality it was all a scam, underpinned by the illusion of wealth at the top. 'It was like the 1980s movie Brewster's Millions. [Constantinou] was spending money to create this impression of himself, creating a legend and cult of the individual,' says a source with close knowledge of the former City boss. They likened the atmosphere in his office to the Hollywood film The Wolf Of Wall Street, which chronicled the rise and fall of real-life investment fraudster Jordan Belfort. 'Everyone who spoke to [Constantinou] came away with the view that he was a massive c---. He's an absolute t-----, but he had the chutzpah not to worry about the size of the lies he was telling.' His lies were so convincing that Ben became one of hundreds of people lured in. Many believed that Constantinou was able to personally guarantee the cash because of the supposed wealth inherited from his fashion tycoon father, who was murdered in a case that remains unsolved. Aristos Constantinou, who ran a string of shops in London, was shot dead by masked men on new year's day 1985 at his home on The Bishops Avenue in Hampstead, north London, known as Billionaire's Row. Major CWM sponsorship deals, such as with Chelsea Football Club, also helped give the company the patina of legitimacy. Everything seemed calm, organised and above board. The hospitality was flowing, with potential investors given front-row seats to major events. Constantinou was filmed showing the Princess Royal around the 2015 London Boat Show, which CWM sponsored, just months before its offices were raided. 'It was a clever scam, there's no doubt about it,' says Ben. 'Everything was designed to pull the wool over our eyes.' Staff were told that CWM's investment strategy was simply too 'long and boring' for them to understand. The word 'Ponzi' was also not to be used in the office, with one member of staff allegedly sacked for uttering it in the office kitchen. The atmosphere in the office was said to be intimidating and volatile, with workers belittled by Constantinou and alcohol featuring heavily. In 2016, he was jailed for a year for assaulting two women. A court heard how he pushed a woman up against the frosted glass of the office reception area and went on to grope and kiss her against her will. While on bail for the attack, he assaulted another woman during drinks after a business meeting, shoving a chunk of hot wasabi paste in her mouth. It was around the same time that CWM began to unravel. CWM's Square Mile office was raided by police in 2015 after a tip off and the business shut down. Ben turned out to be one of the lucky ones. Despite seeing returns of 5pc a month after initially putting his cash in, he started to grow suspicious of Constantinou's tale and pulled his money out just before. 'It was too much of a red flag generating that amount of money from the margins – if it was that good it would have been discovered by a hedge fund,' he recalls. Hundreds of others ended up losing their lifetime savings. A person close to some of the victims and their families says: 'There was a retired lorry driver who put all his money in and lost the lot, and a group of Gurkhas who put their retirement funds in and lost the whole shebang.' Constantinou first disappeared in June 2023 when he was found guilty of fraud by false representations, fraudulent trading and money laundering at Southwark Crown Court. He was convicted by a jury in his absence and sentenced to 14 years in jail. Prosecutors estimated that Constantinou made £97m from the scam and recovered a Range Rover, Porsche and CWM-branded motorcycle during their investigations. A confiscation order for £64m was handed down this month. Adrian Foster, of the Crown Prosecution Service, said: 'This was a callous scam targeting members of the public. Many people lost their hard-earned money because of Constantinou's greed and false promises in this fake investment scheme.' The fraudster, who uses the aliases Antonis Hadjicostis and Georgios Arnaoutakis, was arrested in Bulgaria in 2023 while trying to enter Turkey with false documents, but was later released. Aside from the death certificate in Mexico, the trail has gone cold. As the hunt for Britain's 'Wolf of Wall Street' continues, those whose lives have been affected by Constantinou's tricks continue to feel haunted by the experience. 'I've been the target of another scam since,' admits Ben. 'So now I do all my own investments – I will not take the advice of anybody from anywhere. There are too many scams out there.' Some names in this article have been changed Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
The Guardian
28-06-2025
- Business
- The Guardian
‘He left us with nothing': the British investors swindled by a German property firm
'He took everything, left us with absolutely nothing,' says David Middleton, one of thousands of British and Irish investors who racked up huge losses from the collapse of a German property ponzi scheme. The 72-year-old pensioner from Northern Ireland is referring to Charles Smethurst, the German-British businessman who set up Dolphin Capital in 2008, later renamed Dolphin Trust, then German Property Group (GPG), with 200 affiliated companies. In July 2020, the business filed for insolvency, owing more than €1bn to up to 25,000 investors around the world. Smethurst was convicted this month of 'serious fraud' and sentenced to six years and 11 months in prison by a regional court in Hildesheim, in northern Germany. As part of a plea bargain, he admitted to four of 27 counts of commercial fraud, filed against him by the Hanover public prosecutor's office last October, for total damages of €56m. The other charges were dropped in return for his confession to speed up the trial, which was due to run into August. Dolphin's glossy brochures promised readers double-digit returns for investing their money in a scheme that pledged to restore historic buildings across Germany – including the ruins of castle Dwasieden on the Baltic Sea island of Rügen – and turn them into luxury apartments. However, few were ever restored. Investors were mainly from the UK, Ireland, France, Singapore and South Korea and included financial institutions and individuals, many of whom lost their pension pots or other savings after regular interest payments dried up in 2019. Smethurst's fraud conviction related to €60m in investments made by the French fund manager Horizon AM, including €30m in the Pariser Strasse project in Berlin. The court heard that the building was never bought, but the funds were used by Smethurst's company to meet other obligations. He served a prison sentence for fraud between 2000 and 2003 in an unrelated case. Horizon said it was 'led to believe we were partnering with an experienced and reputable real estate developer' as Dolphin provided the firm with 'highly detailed due diligence documents' and sent regular reports wrongly suggesting projects were 'progressing as planned'. The investor was not aware of Smethurst's previous fraud conviction. 'According to findings from the insolvency administrator and the criminal investigation, a significant portion of the funds was diverted abroad to jurisdictions with strict banking secrecy, notably the British Virgin Islands and possibly the Cayman Islands,' Horizon said. 'These jurisdictions do not cooperate with European authorities, which means that the money trail goes cold. This illustrates the systemic failure of cross-border cooperation in cases of fraud, and why victims like us are left without meaningful recourse. 'We are still wondering where the money went, what remains, and whether it is still possible to recover anything to compensate Horizon and its investors.' UK individual investors told the Guardian they are angry, and fear that Smethurst will be released early for good conduct and recover the hidden funds for himself. Middleton and his wife, Janet, invested in Dolphin in 2015: his pension lump sum of £100,000 and her inheritance of £120,000. Their financial adviser, the late Alastair Hooks, told them it was low-risk and supported by the German government, Janet Middleton recalls. 'To be honest, I was nervous about it and strongly stated that as pensioners we could not afford to lose this amount of money, but again we were assured there was no risk.' After Dolphin filed for insolvency, Hooks did not return their calls, and the couple discovered he had unregistered from the Financial Conduct Authority (FCA) in 2012. She says they have explored every avenue – even as they dealt with David being diagnosed with bowel cancer – but have not recovered any of their investment. Janet says Smethurst's sentence 'seems very lenient to me … Smethurst may well serve his sentence and even get early release for good behaviour while other people like David and I now serve a sentence in our retirement economically'. A former NHS nurse, she says the couple had been looking forward to a comfortable retirement but have had to budget their outgoings; they have not had a holiday in years and both drive 20-year-old cars. The Hildesheim court said it did not order Smethurst to make any payments to investors because it could not establish that he had personally siphoned off any funds. Justus von Buchwaldt, of the law firm BBL, the insolvency administrator who testified in June, subsequently said: 'I fear that this is only the tip of the iceberg. It is still unclear if other people were involved in this large-scale fraud and where most of the investments ended up.' Of an estimated €1.3bn of investments received by the property company, about €800m is missing. The Hanover prosecutor's office said it had investigated other company officials but could not find evidence of any wrongdoing. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion It is one of Germany's biggest investment scandals since the second world war, and the German authorities have been criticised for being slow to intervene, even though the property company stopped filing financial accounts in 2015. Alison Moncrieff-Kelly, 63, a freelance musician from Kent and former director of the Rye arts festival, was a Dolphin investor. She said: 'This seems a pathetically small price for Smethurst to pay for such heinous and convoluted levels of crime. Where's the money gone is the big question … and six years 11 months doesn't touch the sides.' Most of the listed buildings acquired by GPG were never redeveloped and left derelict. Von Buchwaldt at BBL has sold 20 of 75 properties so far, for more than €87m, and has yet to distribute the proceeds to investors. Those sold include castle Dwasieden, a listed former brewery in Bad Aibling in Bavaria and a period villa in Fürstenberg/Havel in Brandenburg. The property sales are expected to take years as the legal situation is often complex. Almost 8,000 creditors have filed claims with BBL against the collapsed property group, out of an estimated 15,000 to 25,000 investors globally. Von Buchwaldt has said BBL would work with the UK's FCA, Serious Fraud Office (SFO) and Financial Services Compensation Scheme (FSCS). Debbie Kay Randles, 67, invested £25,000 in Dolphin in 2015 and, like others, has also lost money in other investment schemes. She paid £6,000 to a financial claims company in an attempt to recover her Dolphin investment, but 'they just disappeared'. She even enlisted a private detective to track down the claims firm. 'It's just been an absolute ongoing nightmare,' she says. 'I've not got a lot left, so I'll just keep working, probably until I'm 75, and then retire.' A former TSB employee, she now works for a window blinds business and lives in York. Moncrieff-Kelly says the trial 'doesn't address this issue of how incredibly badly regulated financial affairs are in the UK … I don't know if it's happening so much in any other country in the world.' She points to the 'middlemen' – financial advisers who are typically paid commission of 20% to 30% and 'kept that money' despite 'selling a fraud'. She invested in Dolphin after her financial adviser suggested it. Moncrieff-Kelly has recovered about half her £80,000 investment – money she inherited from her late mother – from the FSCS, with the help of a claims company that took the other half as payment. The FSCS says it has paid compensation to more than 1,900 customers in relation to Dolphin/GPG investment products, and a further 150 people have open claims. Compensation may have been triggered in relation to unsuitable financial advice that customers were given. It says it cannot put a figure on the compensation paid because it includes payouts for other investment losses. The SFO declined to comment while the FCA said it could not comment on individual firms. 'People don't understand the trauma and the damage that [fraud] has done,' says David Middleton. 'People think [with] white collar crime, slick City crime, there's no victim. There is a victim.'
