Court hears what happened to Arck cash

Court hears what happened to Arck cash

A ‘deluded’ conman who swindled £50m from investors and blew the cash on cars, holidays and even a yacht is set to pay back less than £350,000.

Richard Clay, 51, promised investors their money would be put into offshore property development schemes, and that their original investment sum was safe.

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

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Clay is said to have personally made almost £5 million from the scam.

He and his partner Kathryn Clark, 53, used marketing company Arck LLP to push unregulated financial products on individuals and IFAs.

A confiscation hearing at Southwark Crown Court on Friday (18 June) determined that Clay must repay just £344,244.07 of the £4.87m he made.

Judge Nicholas Loraine-Smith ordered that if the funds aren’t paid back in full within the next three months he will face an added three years behind bars.

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.

Clark 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 in October, Judge Loraine-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 Clay throughout their relationship.

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

She even lost her life savings after 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, 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.

In fact it was being rapidly spent by 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 Clay and 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.

The pair were both arrested in March 2012 and during searches of their properties police discovered a confession letter written by Clark.