Property developer behind incomplete Northampton football stadium banned
His 10-year disqualification as a company director follows an investigation into his opaque administration of over £6m of public funding to aid the redevelopment of Sixfields Stadium.
Howard Lawrence Grossman, 57, from Bushey, Hertfordshire, incorporated 1st Land Limited in August 2013 to act as the contractor for Northampton Town Football Club who wished to redevelop the Sixfields Stadium.
Grossman was appointed the sole director of the company and between December 2013 and July 2014, 1st Land received a balance of at least £6m from Northampton FC to go towards the costs of redeveloping the stadium. The football club in-turn received the funds from the local authority – Northampton Borough Council.
However, by January 2015, 1st Land entered into administration following the petition of a creditor before entering into Creditors Voluntarily Liquidation in December 2015.
Due to the high profile nature of the collapse and the use of public funds, the Insolvency Service carried out an investigation in the public’s interest into the collapse of 1st Land and Grossman’s conduct while a director.
Investigators discovered that Howard Grossman failed to ensure the company maintained adequate accounting records or deliver a sufficient amount of records to the administrators. Subsequently, it has been not possible to determine the exact nature of more than £5.6m worth of payments made to various parties from the company’s accounts.
Roughly £2.65m of transfers were made to two separate third parties, but it is unclear if they were loans, why they were paid or under what terms.
Another payment investigators were unable to establish was whether approximately £1.5m was paid to the benefit of Grossman, his family and other connected parties and whether such payments were treated as dividends.
Ultimately, Grossman did not dispute his failure to preserve adequate accounting records, or his failure ultimately to deliver accounts to the joint administrators.
Sue MacLeod, chief investigator for the Insolvency Service, said: “Howard Grossman, like all directors, had specific duties as a company director but he blatantly disregarded them.
“The company’s insufficiencies when it came to record keeping means that we are unable to determine the exact nature of payments worth millions of pounds of tax-payers money, who along with supporters of the football club are the real victims here.”
Northamptonshire Police is continuing its nationwide investigation into the missing Northampton Borough Council loan money and is working with other prosecuting authorities to recover the public funds.
Property developers banned after abusing £12m of investments
The group ran Liverpool-based property development company Absolute Living Developments Limited from around 2013.
The company pitched developments to investors, which focused on converting commercial buildings into homes.
Developments were predominantly located around Bradford and Greater Manchester.
However, the firm was found to provide misleading and incomplete information to investors, many of whom were based in Asia, meaning due diligence couldn’t be carried out.
Investors complained the developments had not been full completed and the apartments were unliveable.
In 2016 the company was wound-up over unpaid rates.
Investigators later discovered various examples of misconduct by the directors.
And the company had signed charges over Absolute Living Developments’ assets, which meant that a third party owns them and there are no remaining assets in the liquidation to pay creditors.
The Insolvency Service said Absolute Living Developments had no ability to ensure the terms of contracts with investors could be met and had failed to provide safeguards for money obtained.
For one of the developments, it was found the company requested completion payments from investors despite the development not being completed.
The six directors have now been disqualified for a total of 54 years.
Two of the directors live in The Wirral and London, while the rest are based in Malaysia.
London-based Daniel Mark Harrison was the last of the directors to be disqualified and he was banned for six years through a court order.
An independent insolvency practitioner has been appointed to investigate recovery of assets for creditors – to date claims from creditors in excess of £68m have been received.
Ken Beasley, official receiver for the Insolvency Service said: “This was a complex investigation, considering the amount of money that was invested, not all of the directors were based in the UK and we worked with several other authorities.
“We want to draw attention to these rogue directors so we can alert people about the risks involved when investing, while also warning that we will investigate and tackle those that set out to deliberately rip people off by misrepresenting the investment opportunity on offer.”
Lettings agency boss banned for spending £34,000 of tenant deposits
Dorset-based Kari Ridout ran Woodhouse Residential Lettings, collecting more than £34,000 in deposits from tenants between 2015 and 2017.
But instead of placing cash into custodial deposit schemes, the 46-year-old used it to pay the firms’ expenses.
The company went into liquidation in 2017, when it then emerged that deposits had not been kept safe.
Ridout has now been banned for six years from acting as a director or managing a company.
Jane Knight, the Insolvency Service’s deputy head of insolvent investigations, said: “Kari Ridout failed to safeguard the deposits she was entrusted to hold onto, resulting in losses to both landlords and tenants.
“Her conduct fell short of what is required of a director of a limited liability company and her disqualification will act as a deterrent to others from similar conduct in the future.”
Predatory mortgage support boss disqualified as company director
Helen Morten, deputy official receiver for the Insolvency Service, said: “Daljit Dhillon set out specifically to mislead members of the public who were in a vulnerable financial position for her own considerable personal gain.
“The court’s decision to disqualify her shows the seriousness with which this type of cynical financial service activity is viewed.”
The 42-year old, Daljit Kaur Dhillon from Sutton Coldfield, appeared at the High Court in Birmingham on 13 September where she was banned and ordered to pay costs of £12,000.
Known by a variety of names, including Kareena Kapoor, Lisa Dhillon and Daljit Kaur, Dhillon was the director of three companies: Repossession Management Bureau Ltd, RMB Assets Ltd and OM Payments Ltd.
The companies offered financial assistance to people with mortgage arrears but clients complained that they were unaware of the exorbitant fees they charged.
After an investigation by the Insolvency Service, the companies were wound-up in the High Court in September 2015.
Investigators found the companies were formed after a previous business, Red2Black Ltd, ceased trading after a government agency investigation.
This investigation led to the director of Red2Black, Gurpreet Singh Chadda – Dhillon’s former husband – being slapped with a Final Notice and record fine of nearly £1m.
The promise of equity protection
The companies all targeted people under threat of repossession offering to protect the equity, they would take out a charge on the properties.
However, the companies failed to properly disclose the fees it planned to charge or that the charge secured the indebtedness of the client.
When the property was sold, the companies exercised the charge to extract grossly excessive fees for which no record was maintained to support the amount of work that had purportedly been undertaken.
Meanwhile, representatives of the companies used false names, which prevented clients from determining who they were dealing with.
Investigators found that Repossession Management Bureau and RMB Assets held charges worth just under £4m over properties belonging to 97 clients.
Together, the two companies had a trade income of more than £1.2m, of which just over £1.1m was paid out to Daljit Dhillon.
The companies were also found to have charged VAT on invoices despite submitting nil VAT returns to the authorities.
Daljit Dhillon was declared bankrupt in June 2016 on the petition of the Official Receiver as liquidator of the three companies, after she failed to repay £353,550 worth of void transactions back to the companies.
The Official Receiver has also lodged debts of over £1.5m in Dhillon’s bankruptcy and has recouped a further £40,000 from a former sales agent.
Ponzi property scheme worth £20m shut down after buying one house
In just 18 months, more than 800 people invested between £5,000- £100,000 with Essex and London Properties Limited (ELP).
The firm claimed to purchase properties to either sell at a profit or generate rental income for investors, who were offered returns of between 8% and 12%
But in reality ELP only purchased a single property – a house in Harwich for £147,000, worth less than 1% of the overall amount of money collected from investors.
The company falsely told investors it had purchased numerous properties that had rapidly increased in value and created fraudulent Land Registry documents to show the company owned more property than it did.
Investors received their interest payments, not from any meaningful return on their investment but from payments made by new investors, the Insolvency Service said.
The company essentially operated a Ponzi scheme.
Money benefited company bosses
The Insolvency Service, the Secretary of State for Business Energy and Industrial Strategy issued the petition to wind up the company and in September the High Court ordered the company into liquidation.
David Hill, chief investigator for the Insolvency Service said: “The company persuaded members of the public to part with substantial sums of money to invest in property.
“Only one property was purchased and the money raised from the public in reality was used to benefit those running the company.
“As so often is the case, if an investment scheme appears to be too good to be true, it probably is. There is an ongoing investigation into those individuals controlling Essex and London Properties Limited by Essex Police, who are liaising with the Crown Prosecution Service with a view to prosecuting a number of suspects.”
The Insolvency Service advised investors to respond only to communications from the Official Receiver.
Swansea claims management bosses hit with 17-year ban
Clifford Stanford has been disqualified from acting as a director for 11 years for his conduct as director of Cerys-Angharad and Ifonic.
The other, Timothy Mark Schubert has also been disqualified from acting as a director, this time for six years for his conduct as a director of Ifonic.
The directors were disqualified in the High Court in November after a flood of consumer complaints to Trading Standards and the Ministry of Justice (MoJ) about both companies’ claims management procedures.
Cerys was found to have engaged in unfair trading practices in breach of the Conduct of Authorised Persons Rules 2006 and 2013 and had failed to comply with the compensation regulations 2006.
Shoddy customer service
Cerys misled the public in sales calls regarding claims services offered, fees charged and cancellations. Customers paid for services they never received, fees were deducted from customers without their authorisation and refunds of upfront fees were never issued.
Despite the MoJ issuing warnings, the company failed to rectify the breaches, resulting in Cerys voluntarily surrendering its authorisation to provide claims management services.
The Insolvency Service then looked into the activities of Ifonic and found that following the closure of Cerys in March 2014, Ifonic acquired over 4,000 of Cerys’ existing clients and proceeded to create similar problems to those at Cerys.
Customers complained to the Legal Ombudsman and the MoJ on the fact Ifonic provided misleading information in sales calls, had failed to address complaints and provide the service customers had paid for, taken unauthorised payments from customers and failed to issue refunds of upfront fees to customers who had cancelled their contracts within the cooling-off period.
Despite the MoJ issuing warnings, Ifonic failed to rectify the breaches, resulting in Ifonic voluntarily surrendering its authorisation to provide claims management services.
Robert Clarke, investigations group leader at the Insolvency Service said: “When company directors do not comply with legislation that is designed to protect customers and avoidable losses result, the Insolvency Service will seek lengthy periods of disqualification.
“This should serve as a warning to other directors who may feel tempted to breach customer protection legislation. The Insolvency Service will rigorously pursue directors who deliberately mislead and breach the trust of customers.”
Debt management directors disqualified for more than 11 years
The mismanagement included withdrawing client funds as fees and incorrectly paying customers.
Stephen Anthony Woolley and Kevin Dursley were disqualified from acting as directors for their actions which caused distress to public members who were already in financial difficulty.
Woolley was the director of Security and Wealth Credit Management Limited, trading as Brightsource Financial Solutions. Dursley was the director of Corders Administration Limited, which administered debt management plans on behalf of Brightsource.
On 16 September 2015, Security and Wealth Credit Management went into administration with debts of £2,058,219 – with Corders going into administration the same day.
The Insolvency Service’s investigation found that Dursley had failed to ensure Corders’ adequate management, supervision and administration of debt management plans on behalf of Brightsource – resulting in losses of at least £443,302.
The investigation found that Corders withdrew £262,456 more than it was entitled to from Brightsource’s accounts, and took this as fees, although the sum should have been returned to client creditors.
Further to that, Corders also incorrectly paid 172 client creditors £180,832 which rightfully belonged to other clients.
In addition, the Insolvency Service found that Woolley had “breached the fiduciary duties he owed to the company” by failing to ensure that Corders handled its administrative responsibilities property, resulting in estimated losses of between £413,657 and £2,042,007 to members of the public already in financial distress.
Consequently, Woolley has been banned from acting as a director for eight years from 11 Jan 2018. While Dursley has been banned for three years and six months from 21 November 2017.
Commenting on the disqualifications, Aldona O’Hara, head of Insolvent Investigations, Midlands and West, said: “This is a serious case where the failures of both companies have caused distress to members of the public who were already in financial difficulty.
“The Insolvency Service will look closely at any evidence of misconduct and take appropriate action where others have suffered as a result of directors’ actions, as has happened in this case.”
Failed claims management company directors banned for unfair trading
Swansea-based McCaskill & Morse launched in March 2012, offering a no-win-no-fee service for mis-sold payment protection insurance (PPI) and bank charges reclaims.
However, clients complained to the Ministry of Justice (MoJ) that McCaskill had failed to return upfront fees and paid refunds late following unsuccessful claims.
The MoJ warned McCaskill that it was engaging in unfair trading practices before the company was put into administration in November 2015 owing £93,700.
Subsequent Insolvency Service investigations confirmed many of the allegations and data revealed clients received their refunds between 180 and 380 days after the start of the claims process, more than double McCaskill’s 90-day contract terms.
McCaskill also failed to inform the Ministry of Justice about changes to its business model, including the charging of up-front fees which they had previously declared it did not intend to charge.
As a result, the Insolvency Service concluded that McCaskill had been engaging in unfair trading practices in breach of the Conduct of Authorised Persons Rules 2006 and 2013.
Clawback company failed to return money
The five directors are now banned from acting as a director of a company, cannot take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership, as well as being unable to be a receiver of a company’s property.
McCaskill traded from Suite 1, 4th Floor, Alexandra House, Alexandra Road, Swansea, SA1 5ED.
Timothy Chapple has been disqualified for eight years, Richard Adams for six years, Catherine Wood for five years, Gary Richards for five years and James Bell for four years.
Insolvency Service investigations group leader Robert Clarke noted: “It’s ironic that McCaskill, a company established to support consumers claw back money owed to them, consistently failed to return what was rightfully owed to its clients.
“The length of the bans should serve as a warning to other directors who may feel tempted to breach legislation intended to protect the public, that the Insolvency Service will seek lengthy periods of disqualification.
“I would also like to thank my colleagues at the Ministry of Justice and the Legal Ombudsman for their hard work and co-operation in achieving this outcome,” he added.
Directors of credit broker ‘shark that feasted on most financially vulnerable’ banned for 28 years
Secure My Money Limited (SMM) persuaded financially distressed people to provide bank or credit card details so the company could take money without their knowledge, the Insolvency Service said.
When confronted, the credit firm made misleading statements over refunds to customers, company bankers and the Financial Conduct Authority (FCA), the Insolvency Service’s investigation found.
The directors shared a 28-year ban with Mark Robert Kennedy and David John Carter Mullins banned for eight years each, Edward John Booth for seven years and Christopher Brotherton for five years.
The four had a responsibility for SMM trading with a lack of commercial probity from October 2013, the Insolvency Service said.
The regulator found the firm, which included brands Loan Zoo, Loan Junction, and i-loans direct, duped customers into paying a £69 upfront fee by promising to compare loans from a range of lenders – but in effect did nothing in return for the money.
The customer base for SMM was largely individuals who had been turned down by lenders and were searching for loans, the Insolvency Service said.
SMM was then found to have charged monthly fees without permission, knowledge or any clear explanation or justification.
Took advantage of desperation
SMM also directed customers to similar brokers, meaning these people were exposed to the potential to be charged a number of times by similar brokers, the Insolvency Service said.
Kennedy, Mullins and Booth shared responsibility for allowing the credit firm’s website to remain active, resulting in £181,393 being taken from individual bank accounts – even after SMM had agreed with the FCA to remove it from public access and sight.
At liquidation on 31 August 2014 SMM had liabilities totalling £357,628, with assets estimated to be £6,000.
Cheryl Lambert, chief investigator at the Insolvency Service, said: “This company was a shark feasting in a pool of the most vulnerable and financially distressed.
“It took advantage of their desperation for immediate funds, and its own technical expertise, to induce the unwary into a trap from which it was difficult to escape.
“The system that was created resulted in some of the least financially sophisticated members of society having their banking and personal details pinging around a school of sharks to create a feeding frenzy.
“This was utterly cynical and thoroughly reprehensible commercial activity.”
Three ‘recklessly negligent’ payday loan directors share 20 year ban
At the point of administration, Southend-based Speed-e-Loans.com Limited (SEL), which only traded for two years, had assets listed at £150,269 and liabilities to creditors of more than £4.3m.
The directors of SEL have been disqualified after an investigation by the Insolvency Service (IS) led to a ban for Philip Miller for nine years, Robert Alan Davies for six years and Daniel Jonathan Miller for five years. All three directors breached their fiduciary duties and the duties of care, skill and diligence, said the IS.
Philip Miller caused, while his son, Daniel Jonathan Miller, and Robert Alan Davies allowed, SEL, at a time when it was not solvent and had ceased lending to new clients to receive funds from private investors through pension liberation schemes. These investors became liable to pay a substantial tax charge and were also exposed to the risk of penalties.
SEL received £1,210,860.06 from private investors, funds which were in jeopardy and were in fact lost.
SEL traded as a payday loan provider from February 2010 until July 2012, when its then managing director was suspended and a new manager appointed, but the firm closed in August 2012.
Phillip Miller, also major shareholder in SEL presented a proposal to receive moneys from a pensions liberation scheme set up by third party brokers.
SEL was to be the underlying investment through which members of the public derived guaranteed annual dividend payments of 5% as well as a guaranteed return of the whole of their “investments” in ten years. The terms were that SEL would receive 54% of the moneys provided by the public but be contractually obliged to repay 100% plus the annual 5% dividend. The board agreed by majority to the proposals and set in place the necessary pension trusts and paperwork.
From October 2012, members of the public invested at least £2.6m through brokers, of which at least £1.2m was received by SEL and none of which was invested, but instead siphoned across to pay off company debt.
In January 2013 SEL became aware that that one of the brokers responsible for the scheme was on trial for fraud but the firm continued receiving investments until May 2013.
During May 2013 a BBC documentary was shown raising clear concerns over such schemes. SEL sought professional advice and entered into administration in June 2013.
Cheryl Lambert, chief investigator at the Insolvency Service, said: “The directors were collectively, and at the kindest interpretation, recklessly negligent in their desperation to save the company. None of them asked simple, obvious questions when it should have been clear to them the brokers were taking nearly 50% in fees, nor the type of scheme they had become involved with and the individuals who were pushing the scheme.
“Philip Miller, the proposer and principal character, stood to gain financially from individual the transactions through a commission and so his actions demand the harshest criticism.
She continued: “Taking action against the people most responsible is a warning to all directors that such behaviour will attract in a very significant sanction. You cannot hide behind a lack of technical knowledge of specialist schemes – you have to exercise independent and critical thought.”