A former business owner has been disqualified as a director by the Insolvency Service for 11 years after his company "scammed" £6.7mn from investors by promising false investment returns.
According to the Insolvency Service, Sam Eustace caused his business Kingsman Property to trade with “a lack of commercial probity” which included offering “false representations” as to returns on investments.
Eustace’s director ban began on March 24, 2022, and will run for the next 11 years. The 36-year-old south Londoner, also known as Samuel Jaz Eustace, will not be able to directly, or indirectly, become involved in the promotion, formation or management of a company, without the permission of the court.
Between October 2016 and March 2019, the Insolvency Service found Kingsman Property had paid out more than £3mn to investors, but this was funded by money received from new investors rather than any actual return on investment.
The regulator said the company operated "similar to a Ponzi scheme".
Kingsman Property went into liquidation in August 2019. Prior to its collapse, the firm had promised landlords “guaranteed rent” all year around and offered investors annual returns of 30 per cent, the Insolvency Service said.
Investors were asked to put their money into rental housing with at least three tenants or more in order to make their returns. It took at least £6.7mn from would-be investors before its liquidation.
Originally set up in October 2015 under the name ‘Samuel James’, the company changed its name to Kingsman Property in May 2017.
According to company accounts, the business was insolvent by June 2017, with debts of nearly £700,000. “Its deficit grew exponentially,” the Insolvency Service said, adding that it owed nearly £5mn when it eventually went into liquidation.
Eustace, who claimed to be “a successful entrepreneur” who was “honest and trustworthy” on his company's Facebook page, paid himself dividends from the company between November 2017 and June 2019 amounting to nearly £400,000.
“Sam Eustace knew he was taking people’s hard-earned savings as part of a scam and has left countless people out of pocket,” said Martin Gitner, chief investigator at the Insolvency Service.
Gitner added that the regulator will not hesitate to investigate and use its powers against those engaging in this kind of fraud.