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The recovery room scam is also a pretty simple idea, as the FCA kindly informs us (my italics and header formatting):
Victims of boiler room fraud and other investment scams are often targeted by criminals offering to help those that have already lost money. These scams are run from what the fraudsters call ‘recovery rooms’ and might even be carried out by the same group. Find out how to avoid becoming a victim of recovery room fraud.
Even seasoned investors have been caught out by boiler room fraud, with the biggest individual loss recorded by the police being £6m. We have found that boiler room victims lose an average of £20,000 each to these scams, with as much as £200m being lost in the UK each year.
If you have already bought or sold shares through a boiler room, you should also beware that fraudsters are likely to target you again or sell your details to other criminals.
How it works
Recovery room fraud may be related to a previous scam or a completely new one. Fraudsters hope that because you have already lost money to a scam, they might be able to steal more from you.
You will be reassured that your original investment is genuine and encouraged not to pull out of the deal or report it to us. You might even be threatened with legal action, although this is usually not carried through – get legal advice if you are concerned.
Claims that your investment will soon soar in value are common in recovery rooms, or you may be told you can swap it for another deal, with a transfer fee involved.
You might also be asked to pay a capital gains tax bill before the large profit you were promised can be released to you, even if it never actually will be.
An offer to buy back the shares or investment that you have lost money on, might need an administration fee or insurance deposit to firstly be paid. But you are unlikely to ever receive the money from their supposed sale.
What happens when you combine these two simple ideas? A semi-automated recovery room, that’s what.
Carbon Neutral Investments (directed, until just after a previous FCA warning was issued, by Paul Seakens) and Gemmax Solutions (director: Paul Seakens) are the subject of a warning from the UK’s Financial Conduct Authority, issued in July:
And finally, let us Google a few names from the consolidated client list of Carbon Neutral Investments (available here) and Gemmax Solutions (available here), and see what pops up. There are, by the way, just shy of 90 firm names on that consolidated list, which gives some idea of the scope of this operation.
…and so on. In fact, when one plods through the whole list, one finds that 31 out of 89 company name searches get the ad for whichcarboncredit.com, displayed either at the top or the bottom of the page. That may change, of course, but the screen dumps are in safe hands.
So who are whichcarboncredit.com, and why are they so well informed about the vagaries of a bunch of dodgy carbon brokers (“Broker disappeared”) that have fled by night? On their web site it appears that all whichcarboncredit.com really want to do is collect the enquirer’s email address and telephone number. Top tip: don’t give it to them.
Further illumination comes when one consults the whois record. It was registered by someone called Luke Ryan, who gives an address in Southampton, a city in Hampshire. There turns out to be another sighting, in November 2012, of a Luke Ryan connected with carbon credit dodginess in Hampshire:
Earlier this month, the BBC secretly filmed the director of UK-based company Enviro Associates making “apparently misleading” claims about the amount of money to be made by investing in carbon credits. The director, Luke Ryan, said there was “serious money” to be made.
Ryan was offering carbon credits for sale at a price of £5.50 each. He claimed that this was a discounted rate, compared to the “retail price” of £7. Ryan said that,
“In the next four to five years the market could go from anywhere from 100 to 500%. So you could be buying at £5.50 now, but in a year’s time it could be [worth] £10, £11, £12, £13.”
The BBC reports that it filmed Ryan explaining that “customers’ money would be held in accounts protected by the FSA”. On its website, Enviro Associates states that, “We are a clearing member of Carbon Neutral Investments Limited (CNI).”
Carbon Neutral Investments Limited was registered in the UK in May 2004. It has operated under six different names since then. On its website Carbon Neutral Investments provides a list of the companies for which it provides clearing and settlement services. One of the companies is Worldwide Commodity Partners Limited, which in common with Enviro Associates cold calls potential investors to encourage them to buy carbon credits. Carbon Neutral Investments is on the FSA register, where a note points out that the company is “Unable to hold client money.”
Carbon Neutral Investment’s company brochure (pdf file, 5 MB) certainly looks impressive. The company is working with What Car? magazine, to offset the emissions from its road tests and it’s sponsoring the What Car? Green Car awards. Carbon Neutral Investments was also involved in Vodafone Mclaren Mercedes becoming the world’s first carbon neutral Formula 1 team, including selecting projects to source carbon credits to offset the Formula 1 team’s emissions.
Another company, called AGT Investments is also involved. According to a sample “Offset Certificate and Receipt” available on Enviro Associates’ website, “All of our carbon credits are of the Verified Carbon Standard (VCS) and have already been purchased by AGT Investments Limited.”
So, a year ago Ryan’s employer Enviro Associates was tightly linked with AGT Investments; now someone called Luke Ryan is offering recovery services to people who’ve been bilked by AGT Investments. But this is the best bit:
All three companies, Enviro Associates, Carbon Neutral Investments and AGT Investments share the same office address in London. They also share the same director: Paul Seakens.
The reader is reminded of the italicised part of the FSA warning:
These scams are run from what the fraudsters call ‘recovery rooms’ and might even be carried out by the same group.
This made me laugh. After a brief wobble at the weekend, during which all the whichcarboncredit ads disappeared, Luke Ryan got his nerve back, and this showed up: