Two former partners of property investment marketing firm Arck LLP have today been charged with fraud and forgery offences by the Serious Fraud Office and Nottinghamshire police, following their arrest in March 2012.
Kathryn Clark (51) from Nottingham was arrested by Nottinghamshire Police on 2 March 2012 for suspicion of fraud by false representation and money laundering in relation to Arck LLP. The other managing member, Richard Clay, (48) from Leicestershire, was also arrested.
The SFO said between 2006 and 2012 Ms Clark and Mr Clay allegedly created and marketed various unregulated financial products which they made available to individual investors through regulated independent financial advisers. It is estimated that approximately £60m was invested in these products by individual investors and, in some cases, IFAs themselves.
Arck LLP is a Nottingham-based partnership that created and marketed property investment financial products. Arck is now in liquidation.
The charges against the duo relate to fraud by misrepresentation and forgery offences. Both have been bailed to appear at Westminster Magistrates’ Court on Friday (29 November).
In March 2012, the Financial Services Authority issued a supervisory notice on one of the Sipp operators, HD Administrators.
The FSA said at the time that Ms Clark appears to have received, circulated or been involved in the provision of forged bank statements purporting to relate to the Arck General Client account at Yorkshire Bank to Arck investors.
In addition, Ms King could not adequately explain to the FSA how a Sipp operated and “did not understand her regulatory responsibilites”, the FSA said.
In response to enquiries made of Arck by investors as to the funds it held, Mr Clay sent an email dated 29 July 2011 to an IFA acting on behalf of investors attaching a bank statement purportedly showing the balance of the Arck General Client account at Yorkshire Bank to be £12,269,425 as at 1 July 2011.
In fact, at this date the real balance was £25.87, according to the FSA.
Also, in March 2012, self invested personal pension provider Greyfriars Asset Management sent out a warning letter to its self-invested personal pension clients and spoke to IFAs who recommended certain investments by Arck.
Last year, FTAdviser revealed that Sesame was investigating one of its appointed representatives who recommended two clients invest pension fund money into a property investment in Cape Verde, which were being managed by Arck.
Julian Pruggmayer, IFA of Financial Risk Management, told FTAdviser that an AR of Sesame converted two of his clients’ funds into self invested personal pensions and then invested a total of £54,000 into a holiday complex called Paradise Beach in Cape Verde being marketed by Arck LLP.
The SFO and Nottinghamshire police have worked jointly on this investigation since May 2012.