TTF Blog: 30 November 2020

by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting

One of the devastating features of investment scams is that they tend to appeal to their victims’ social conscience.

“They’ll have some renewable energy plant in some third world country that will benefit from your investment,” explained pensions expert Lesley Carline, at a TTF Symposium last week.

Scammers often speak to victims like a friend, in a manner that true professionals cannot emulate. Carline compares their bluster to that of Donald Trump: “When pensions people are talking to members about their retirement options we use very complicated words and we are hamstrung by regulation about what we can and can’t say. If you listen to Donald Trump, he used soundbites, he says what you want to hear, he used short sentences and simple words. You may think the guy’s a plonker but he’s very effective. So is your scammer. They research you, they’re friendly, they’re approachable, it always seems to be quite timely when they contact you.”

“Ecohouse” transparency gap?

As TTF’s head of investigative journalism I took a call last week from an investor who was motivated by this kind of ‘social good’ messaging. He’d put savings into a “social housing scheme supposedly affiliated with the Brazilian Government”. However, the plots of land offered for sale in Brazil, it now appears to him, were registered to a different entity than the one advertised. He had lost all of his investment, as had hundreds of other people.

By the caller’s understanding the investors altogether lost £33M and there had been complaints to regulators about the scheme for months before he had put his money in.

It was called Ecohouse, a scheme that was suspended six years ago, since deemed a fraud by  Brazilian authorities. So far, these authorities appear to be hot on this scheme, while UK authorities lag behind: “the Brazilian Government intervened against the scheme because it was fraud. Our Government, or the Solicitors Regulation Authority, they treated it as if it was a collapsed scheme” he said.

By his account, investors’ hopes had briefly alighted on a dogged and ‘brilliant’ Met Police officer, before being held in suspense. Detective Richard Kirk had travelled around the country, interviewing victims.

In June 2017, Kirk wrote to the victims’ group to explain that he had obtained: “copies of all the receipts that Ecohouse held in respect of their expenditure. These will enable me to give a much more detailed report into where and when your funds were dissipated. They also have bank ledgers that give me more information than I have received previously. These show the destination of some of the funds, especially to overseas accounts. This information will potentially save me months of work waiting for information from abroad.”

Investors understandably hoped they were about to get transparency on where their money had gone — but they are still waiting. Kirk moved to a different police force and the case was transferred to another experienced officer. More than three years on an enduring cloud of mystery is hanging over this case, which has not been resolved during the pandemic. Gallingly, my caller was aware of an attempted suicide among the investors.

The victims of this scam were drawn to something called ‘Ecohouse’ because they had a social conscience, and it has now been more than six years since the scheme was shut down. Will they ever find out where their money went?