naked capitalism

This is Naked Capitalism fundraising week. Over 620 donors have already invested in our efforts to shed light on the dark and seamy corners of finance. Join us and participate via our Tip Jar or read about why we’re doing this fundraiser and other ways to donate, such as by check or another credit card portal, on our kickoff post and one discussing our current target.

By Richard Smith

“Carbon credit company hits out at ‘scammers’”, announces FTAdviser, unfortunately neglecting to consider the possibility that the very company doing the hitting out might itself be a scam.

Since this entire FTAdviser piece is, in fact, a transcription of a scammer’s schtick, and I really doubt that the FT wishes to enforce their copyright on that (while sort of hoping they try it), I’ll quote it in full:

After IFAs sounded the alert over a potential carbon credit boiler room operated by Carbon Trace Solutions, another carbon credit company has admitted to problems in its sector.

Validated Carbon Credits said it wanted to warn IFAs about the misrepresentations surrounding carbon credit investments.

The carbon credit company said IFAs needed to ensure credits were visible on a public registry and payment was made direct to the provider or seller of the credits and not to a third party or escrow agent.

It also advised asking about the exit strategy and how and when the credits were going to be sold as there were costs associated with this and it may be necessary to do some work to find someone to sell on the clients behalf or the client may need to open a trading account and manage themself unless a genuine alternative is available.

Validated Carbon Credits warned against any promise of returns as it claimed carbon credits were spot trades and so there were no fixed or guaranteed returns.

Ellie Richards, director of Validated Carbon Credits, said the company had come across other potential carbon credit boiler rooms.

She said: “We applaud your efforts in exposing the scammers who are destroying the industry and ripping off innocent victims with their clever sales patter.

“As a genuine company we have come across these and more. If it sounds too good to be true it usually is.”

So there we are: Validated Carbon Credits has wangled its little mention in the FT. The self-description (“genuine company”) goes unchallenged.

Let’s carry out a spot of due diligence, shall we? It’ll take just a few minutes. First, take a quick look at the Validated Carbon Credits web site, whose very design emits an unmistakable and unpleasing aroma; of rat. Validated Carbon Credits turns out to have a proxy domain name registration; there’ll be no quick discovery of the underlying owner’s identity, then. It’s an odd way for a “genuine company” to register.

Next it turns out that Validated Carbon Credits is a trading name of Baron Traders Limited. Down at the bottom of the web page, we read the dread words:

Baron Traders Limited is a Gibraltar registered company, Number 105368. Registered Office: Don House, 30 – 38 Main Street, Gibraltar. Baron Traders is VeriSign Trusted. The identity of BARON TRADERS has been confirmed using official records.

For American readers, here are a few Gibraltar stories plucked from, well, I’ll be damned, FTAdviser. You can get the gist from the headlines:

UK-based firms shut down by High Court for aiding share dealing boiler rooms (Two UK-based firms, Chesteroak Limited (Chesteroak) and Bingen Investments Limited (Bingen), incorporated in Gibraltar, have been placed into compulsory liquidation by the High Court for assisting share boiler rooms, the FSA said in a statement.)

Tax havens named and shamed

Diary: Don’t fear Gibraltar’s watchdog

Next, we look for Baron Traders Limited at Opencorporates. We get no hits at all for Gibraltar companies (there’s a UK company that was set up in 1995 and dissolved in 1997, so that doesn’t match either), so we look instead for every Gibraltar company with “Baron” in its name. This is what we get:

We’re five minutes in and the FT Adviser story is holed below the waterline. The bit’s between this blogger’s teeth now, so it’s on to Google. For leads, we’ve got Baron Traders Limited and we’ve got Ellie Richards. Via Baron Traders Limited we turn up another person, James Richards, on LinkedIn. Here’s a rough and ready paste of the highlights of his resumé:

James Richards’s Experience

Green and Ethical Investments. Carbon Credits – Purchase & Sales

Baron Traders. LazyBoy Investment. Green Investment (Sole Proprietorship)

Sole Proprietorship; 1-10 employees; Financial Services industry

January 2008 – Present (3 years 11 months)

Managing Director

Baron Traders (Sole Proprietorship)

Sole Proprietorship; 1-10 employees; Financial Services industry

March 1993 – Present (18 years 9 months)

Welcome to Baron Traders.

Negotiable Financial Instruments:

Type of Instruments

Commercial Paper

Bonds

Corporate Debt Securities

Commercial Paper Outstandings Federal Reserve

Bankers Acceptances

Guarantees

Bank Guarantees for officially supported exports

Zero-Coupon Instruments

Zero Coupons and STRIPS

Fixed Income – Zero Coupon Instruments

Advantages of Convertible Securities

Treasury Bills

Treasury Bills: How Marketable Treasury Securities Really Work

Treasury Bills, Notes &Bonds

Treasury Bills: U.S. Treasury Securities

Certificates of Deposit: Large Negotiable Certificates of Deposit

Certificates of Deposit: Advantages of certificates of deposit (CDs)

Certificates of Deposit Offerings

Certificates of Deposit: Utilizing foreign fixed deposits (CD’s) for credit lines

Eurodollar

About Corporate Medium-Term Notes

Repurchase and Reverse Repurchase Agreements

Alternative investments: Managed futures and hedge funds

We are regularly Selling: mtn’s, t-strips, bg’s, investment programs, currency exchange.

We are regularly Buying: MTN’S, T-Strips, BG’s.

Director

Baron Traders Limited (Sole Proprietorship)

Sole Proprietorship; 1-10 employees; Financial Services industry

February 1993 – Present (18 years 10 months)

Managing Director

Vogue Estates

1993 – 2008 (15 years)

Offering Real Estate investments in 17 countries.

That imposing list of securities traded by the nonexistent Baron Trading Limited, with the help of just 1-10 nonexistent employees,  looks exactly like a typical up-front-fee scammer’s mumbo-jumbo. I wonder if anyone fell for it.

Next, let’s check out the new companies this guy claims to be involved with. LazyBoy Investments gives no clear hits. Green Investments gives, of course, an unfilterably vast number of hits. Which leaves Vogue Estates. There’s no sign of a live site called “www.vogueestates.com”, but the wayback machine has this: apparently the first time the Wayback machine ever found it was in June 2007, and it does appear to be the relevant site. Odd, that, since we read elsewhere that:

Founded in 2000, Vogue Estates Ltd includes senior management with over 50 years experience in the Overseas Property sector, with the focus on providing investment properties to clients throughout the UK and Worldwide. The company is based in Strand, Trafalgar Square (London).

Vogue Estates

The overseas property specialists.

Buying a new home is always a big decision, but buying overseas can feel even more daunting.

Vogue Estates has built its business and reputation upon helping every client to find client’s perfect homes abroad and then completing the purchase as quickly and easily as possible. Vogue Estates is a family owned and operated business based in Marbella, Spain. Since Vogue Estates are entirely independent of any builders, bankers or brokers, Clients can always rely on Vogue Estates for completely impartial advice.

The company is managed by James Richards who has been involved in the Overseas Property business for many years. James Richards is well trained to look after the company, having previously worked for a large Blue Chip Company.

With a staff body of 1000 fully qualified employees, Vogue Estates Ltd has a growing team, qualified to an extremely high standard. With state of the art facilities and fully qualified staff, the company delivers a professional real estate to an International level. The service is designed to be relaxing and enjoyable, helping clients to find the right Investment / Lifestyle property.

So Vogue Estates started in 2000, grew to a size of 1,000 employees in multinational locations, and yet didn’t bother with a web site until 2007. And some time shortly after that, it vanished, leaving only its wayback machine traces. Remarkable.

Time to go to Opencorporates again to check on Vogue Estates, methinks, where we find five companies with some connection to that name, none of which was established in 2000 and none of which specialises in overseas property sales.

I think Vogue Estates is a figment of Mr James Richards’ fertile imagination.

The final exhibit is the result of Googling the string “On February 19th 2008, he started a trading account with $100,000″, in which we find James Richards spamming numerous message boards, etcetera, with minor variations of the following text:

Let me know if your interested in an introduction to this trader?

Why trade the markets yourself when there´s a world class trader ready to do it for you?

Having personally invested with this trader (and made handsome profits) I would like to introduce you to another type of investment, aside from real estate, which will greatly enhance any portfolio.

He trades the worlds financial markets for himself, and a handful of private clients.

On February 19th 2008, he started a trading account with $100,000.

On March 6th, at 6.15pm just 3 weeks later…. He closed it at $422,952.98

That fund is closed.

He is now accepting clients for his next trading period.

Full documentation with audited facts and figures can be provided upon request

For more information on how he could trade your account for you – call or email me today.

James Richards
Managing Director
Vogue Estates
james.richards@vogueestates.com

So much for James Richards.

What of Ellie Richards, who has the chutzpah to call the FT and spin them that indignant story about scammers? Two half-sightings hint at a possible modus operandi. First, here she is apparently dropping another bunch of scammers in it by ratting them out to Ripoff Report. It reads as if some sort of score is being settled. Second, here is a complaint about her activities by some other indignant anonymous person (who gets her husband’s name wrong):

Has anyone ever had this person working for them ?. Unfortunately, we discovered this information after our company database was manually copied by this person whom then went onto try and sell undervalued poor quality products to unsuspecting clients. This posting is to only prevent other companies in the future suffering a similar experience and prevent members of the public from losing their hard earned cash. How does she do it ? Having been unlucky enough to have employed her in the past, and having discovered both to my misfortune and that of other companies, that she has a history of joining telesales based companies both in the UK and Spain, then over a period of several months copying their client database before moving on. After leaving this company, this person in conjunction with her husband then calls the clients and offers them similar products to which the client was originally interested in.

I suppose the purloined mailing list is now being put to work on a Carbon Credit scam. With, of course, the inadvertent assistance of the FT’s publicity for Validated Carbon Credits. Perhaps the FT shouldn’t feel so bad: the specialist news agency Point Carbon News fell for Ellie Richards too, in the course of reporting on fraud concerns expressed by MarkIt, who have a role in running a big Carbon Credits registry. I do hope MarkIt have denied registry access to Validated Carbon Credits, or Baron Trading Limited, since they’re both utterly bogus. I suspect that the FT will want to follow up their original story, too.

Update 11/11/11: Followup from FTAdviser. They point out that I have been misspelling their name.