InvestmentsOct 9 2015

Court hears what happened to Arck cash

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Court hears what happened to Arck cash

A ‘deluded’ conman who swindled £50m from investors and immediately blew the cash on cars, holidays and even a yacht was jailed for 10 years and 10 months today (9 October).

Richard Clay promised investors their money would be put into offshore property development schemes, and that their original investment sum was safe.

In reality, he either blew the cash on his lavish lifestyle or ploughed it into various other projects – all of which were haemorrhaging money.

Mr Clay and his partner Kathryn Clark, 53, used marketing company Arck LLP to push unregulated financial products on individuals and independent financial advisers.

Investors handed over millions of pounds, which they thought would be used to fund building projects, including a golf resort on the paradise archipelago of Cape Verde, off the northwest coast of Africa.

Arck took £47.5m between 2006 and 2011 – which Clay either used to fund his spending habit or his doomed business ventures.

Ms Clark even forged a bank statement for the Arck General Client account showing a balance of £12,269,425, when in fact it had a total balance of just £25.

Jailing Clay, Judge Nicholas Lorain-Smith said: ‘No sooner is other people’s money under your control, you start treating it as your own.’

Clark was spared jail on the grounds she had been subject to extreme ‘emotional manipulation’ by Mr Clay throughout their relationship.

Mr Clay withdrew £3.4m from the company for his own personal use between 2008 and 2011, while Ms Clark withdrew £129,845 over the same period – the majority of which was her salary.

She even lost her life savings after Mr Clay talked her into sinking £625,000 into the company.

Nottingham-based Arck was set up in 2006 and described itself as a management company, Southwark Crown Court heard.

Between 2006 and 2011, Mr Clay set up three different schemes allegedly investing in different construction projects in the tourism industry.

Clients were told that their original investment had been ring fenced in a client account, and was safe from dilution or dissipation.

In fact it was being rapidly spent by Mr Clay.

When investors asked where their money was, they were provided with ‘complicated and bogus’ excuses’ for delaying repayment, the court heard.

The frauds were only discovered after civil proceedings were launched and both Mr Clay and Ms Clark later pleaded guilty to fraud charges.

The court heard Clay gambled £900,000 in foreign exchange speculation between March and August 2011.

Clay used £300,000 belonging to an investor to pay off his credit cards, top up his personal investment account and treat himself to a £33,000 Landrover.