Mark Kelly and Rikki Nicholls were each sentenced to six years imprisonment for conspiracy to defraud and money laundering at Southwark Crown Court last week (July 15).
According to the Crown Prosecution Service, both men devised a plan to persuade pension holders, predominantly Equitable Life customers, to transfer their pensions into accounts controlled by Mark Kelly.
The court heard how Nicholls and Kelly set up a scheme named PCD Wealth & Pension Management in 2007 with the aim of transferring clients’ pensions to investment funds for growth.
Using others, known as introducers, Kelly and Nicholls convinced pension holders to move their plans from underperforming companies into a self-invested personal pension scheme.
Certain sections of the application forms were left blank to allow Kelly and Nicholls to later complete them.
The pair then went on to invest this money into risky investments without the pension holders’ consent, charging high rates of commission.
Kelly and Nicholls extracted around 10 per cent of the gross sum in unauthorised commission payments – in excess of £1mn each – for their own benefit.
According to the CPS a number of those pension funds have subsequently collapsed, resulting in some pension holders losing substantial amounts of their pension provision, while some victims lost their whole pension.
Victims lost anything from £10,000 to £200,000 of their pensions.
Detective Superintendent John Roch, head of the Met's economic crime, said: “Both men put their own financial gain over the interest of over 250 victims, losing their money and leaving some in financial ruin, whilst earning lucrative sums themselves.
“I would ask anyone who is contacted by a cold caller about an investment to be vigilant. Please consider getting independent professional advice before making a significant financial decision.”
Denis Mountford, from Birmingham, who was defrauded by the men, said: “When I first discovered that my pension fund was rapidly diminishing and inaccessible, I was very cross with myself for trusting poor financial advisers who had taken a high percentage commission and also I was disgusted with them.
“I don't know how one can tell if a financial adviser is totally trustworthy, except by recommendations from people you can trust and I hope that this case will be a warning to others.”
A confiscation investigation will follow convictions, where assets are sought in favour of returning some of the losses to the victims.
Jane Mitchell of the CPS said: “The harm caused by these fraudsters is immense, involving raids on the victims’ pension pots which wrecked their future livelihood and post-retirement plans. Many victims were left with no pensions and will have to work well beyond their retirement date to provide for themselves and their families.
“Mark Kelly and Rikki Nicholls cynically misled pension-holders, telling them they would have safe control over their pension funds but actually transferred the funds into high risk investments, without the pension-holders consent or knowledge.
“The fraudsters did so for their own personal gain, knowing the high-risk investments generated high commissions for them but had no concern for their victims who were losing money they’d worked all their lives for.”
amy.austin@ft.com
