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Bosses banned over £9m property investment scam

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  • 25/02/2020
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Bosses banned over £9m property investment scam
Two bosses who obtained £9m from people who thought their money was being invested into the American property market have been banned for total of 22 years.

 

Kevin Antony Neil, 57, and Peter Leonard Shuttleworth, 37, were each given 11-year directorship disqualifications by Judge Burton at the High Court of Justice in London on 11 February 2020. 

Effective immediately, both have been banned from acting as directors or directly or indirectly being involved in the promotion, formation or management of a company, unless they gain permission from the court. 

 

Dishonest investment 

The scam came to the attention of the Insolvency Service after Colonial Capital Group PLC, the company Neil and Shuttleworth were directors of, entered liquidation in February 2018. 

Investigators discovered that the company, based in Chelmsford, Essex, was incorporated in February 2014 and invited investors to subscribe to bonds with the incentive of a 12 per cent fixed interest rate per annum. 

Bond holders were told their payments would be invested into Colonial Capital Group, who would then forward the funds to a connected American company over whom Colonial Capital Group would hold security. 

The American company was supposed to use the money to buy and renovate distressed properties in the USA which would be rented out or sold once the properties were renovated. Income secured from rents or proceeds of the sale would then be passed back to the bond holders. 

Between February 2014 and March 2017, Colonial Capital Group secured just over £9m from bond holders. 

However, investigators found that no funds were invested into the connected American company over whom Colonial Capital Group would hold security. 

Some £6.6m was paid, via an unsecured loan, to a separate company in the UK that shared the same directors as Colonial Capital Group. A further £2.3m was paid to a separate connected American company over whom Colonial Capital Group held no security. 

Enquiries found that Colonial Capital Group had 244 investors who are owed approximately £11m, including unpaid interest due. 

Dave Elliott, chief investigator for the Insolvency Service, said: “Whenever anyone injects funds into an investment opportunity, at some point they will want to see some form of returns.  

“However, these unsuspecting victims saw no returns on the millions they invested and instead Kevin Neil and Peter Shuttleworth used the funds to pay other connected companies.” 

“11-year bans are substantial disqualifications, severely curtailing the ability of Kevin Neil and Peter Shuttleworth from running companies, and should serve as a stark warning to other directors that they shouldn’t attempt to hoodwink their investors,” he added. 

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