Regulation  

Companies offering gold mine investments shut down

Companies offering gold mine investments shut down

Five companies which offered and provided an investment vehicle for partnerships in gold mining projects in South America have been wound up by the High Court.

The group of connected companies - Santo Montana LLP, Lorem Ipsum Trade Services Limited, Cedar Trade Services Limited, McKinley & Grant Ltd and Evolution Trade Services Limited - had been operating an unauthorised, fraudulent gold mine investment scheme, banking more than £330,000 from this between them.

The companies are connected by one individual who exercised control over them: Harvey Bennett.

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Lorem Ipsum, Cedar, McKinley and Evolution all acted as sales agents for the gold mining scheme, in which partnership rights were sold in the investment vehicle Santo Montana LLP, which was said to hold rights to gold mining concessions in Peru.

The agents, none of whom were authorised by the Financial Conduct Authority, cold called members of the public, whose names had been acquired from database leads, offering them the opportunity to invest in three existing gold mining concessions in South America.

In a statement the Insolvency Service said: “The investigation found no evidence that any of the funds paid by the investors had been used to acquire or to finance Santo Montana LLP’s investment in any gold mines or that Santo Montana LLP had any genuine interest in any gold mines, whether in Peru or otherwise.

“In the absence of cooperation from any of the companies, the limited accounting records obtained appear to show the main beneficiaries of the fraudulent scheme being sales agents and Mr Bennett.”

Prospective investors were enticed by offers of an initial dividend of 20 per cent to 50 per cent of their investments and further dividends every six months for a period of six years. No such returns were ever paid.

Prospective investors were told that they could expect, “on a conservative basis”, to receive returns of between 206 per cent and 457 per cent over their six year investment term.

The Insolvency Service’s investigation found prospective investors were informed that Santo Montana LLP had a joint venture stake in unspecified mines in South America, with at least one of those located in Peru, the joint venture partner being a company called Montana de Oro S.A.

Not only could the service not trace that company, but Santo Montana LLP failed to cooperate with the investigation, its registered office location having been vacated without notice and the last of its designated members having resigned by January 2016, leaving the investment vehicle “essentially rudderless” since that time.

With Santo Montana LLP having abandoned its Essex-based trading premises the company’s investors have no means to contact any of the scheme companies, the Insolvency Service stated.

damian.fantato@ft.com