16TH July 2009
PAULDEROME.COM
Press Release from Serious Fraud Office
To obtain in .pdf format goto:
http://www.paulderome.com/press.pdf
Serious Fraud Office
News release
19 June 2009
Four sentenced in a $10 Million “Ponzi” fraud
Four men who operated high-yield investment schemes have been sentenced
today to a total of over ten years after admitting their participation in defrauding
investors worldwide of a total of US$10 million. A fifth man was sentenced in
September 2008. At the centre of the fraud, entailing one of the most complex
investigations undertaken by the SFO and Cheshire Police, was a project to
extract gold from spent ore, though not an ounce was produced, and no revenue
generated.
Maincrest Investments Ltd and London & General Finance Ltd
Two of the men, Frederick Taylor and Martin Shaughnessy, (both former Cheshire police
officers) ran Maincrest Investments Ltd (“MIL”) and London & General Finance Ltd (“LGF”)
between 1996 and 1998 from an office in Lymm, Cheshire. They solicited investments in
multiples of $100,000 (usually through intermediaries who were paid high levels of commission)
from investors in locations across the world including Arizona, Texas, New Mexico, Netherlands,
Holland, Bulgaria, Hungary, Canada, Spain and Singapore as well as the United Kingdom, The
investigation was greatly assisted with co-operation from these various overseas jurisdictions
and the US Federal Bureau of Investigation, the Department of Justice in Texas and the
American Embassy in London.
The investors were typically high net worth individuals. Each believed they were buying into a
lucrative opportunity to be involved in select bank trading programmes where returns would
reach 80 to 100% within 12 months. No risk was the promise, because their investments were
secured by “bank guarantees” and supposedly with the protection of insurance, both, in reality,
had no substance. Investors, further comforted by the presence of an independent
“stakeholder” in the form of an English solicitor named Christopher Darke, were invited to
transfer funds electronically to a US$ client account of Mr Darke. Almost $9 million was handed
over by nearly 30 investors. These funds were not invested in the way proposed and instead
earlier investors were paid with later investors’ monies, essentially a “Ponzi” scheme, and the
insurance policies that were in place proved worthless. Moreover, Mr Darke far from being
independent, was in fact a Director of one of Mr De Rome’s companies, Anglo American Metals
Inc, and was pivotal in the creation of loan agreements between MIL and LGF and AAM
unbeknown to the investors.
The existence of two former police officers and a solicitor was relied upon by investors and
clearly lent credibility to the scheme.
Anglo American Metals
Without the knowledge of the investors, the funds were transferred to an enterprise ostensibly
set up for the commercial extraction of gold from spent ore or power station waste ash at a plant
in Texas. The company, Anglo American Metals Inc (“AAM”) was set up by Paul De Rome with
its base in Victoria Texas. Some of the funds were used to buy equipment but the business did
not go into production and therefore did not generate any income. De Rome claimed academic
achievement though his BSc in Chemistry and his BA in Automotive Engineering Design were
internet purchases. Darke, together with another participant Ian Whittock (a financial
consultant) were engaged to help promote investments in the business. Both were old
acquaintances of Mr De Rome and became Directors of AAM.
De Rome had to obtain insurance to cover risk of failing to make payments due to MIL and LGF
but the arrangements he put in place were inadequate, unauthorised or simply false.
As De Rome’s metals business was not generating any revenue he needed to raise funds to
pay instalments to the earlier investors obtained through Taylor’s and Shaughnessy’s
companies, MIL and LGF. He set up a scheme to sell shares in other companies he controlled
and, together with Taylor and Shaughnessy, offered sell-back options at a guaranteed 100%
profit. Again, they claimed it was all insurance-backed. Existing and new investors were
attracted. Although some early payments were made, the guaranteed buy-back promises were
not honoured.
“Debt for equity”
In 1999 Taylor and De Rome offered investors a settlement. Investors could agree to take
shares in Anglo American Metals in return for foregoing outstanding profits from their Maincrest
Investments and London & General portfolio. They were told that the shares would be listed
and could then be sold or alternatively there would be an option to sell the shares at a later date
to another of De Rome’s companies. The flaw however is that the underlying value in this
arrangement was a business that had failed to commence production and had therefore
precipitated the initial shortage of funds.
Another of De Rome’s schemes was to offer investors a settlement whereby the money owed to
them would be met by way of share lots in another of his companies, Ventura, on the basis that
they would then relinquish their claims against Maincrest Investments and London & General.
The plan was to then sell the Ventura shares to new investors and the resulting proceeds going
to the original investors, who were also encouraged to introduce new investors to Ventura,
though none did. A lien was attached to the share lots so that when new investors could not be
found, the existing investors received the shares.
Proceedings
Following a joint investigation by the SFO and the Cheshire Constabulary, on dates between
February and April 2006 the defendants Frederick Taylor, Martin Shaughnessy, Christopher
Darke, Ian Whittock, Paul de Rome and Malcolm Bradley were charged with one or more
offences of;
- Conspiracy to defraud contrary to common law
- Fraudulent trading contrary to the Companies Act
- False accounting contrary to the Theft Act
- Making false or misleading statements contrary to the Financial Services Act
De Rome was additionally charged with using a false instrument contrary to the Forgery and
Counterfeiting Act
For trial management purposes four of the defendants (Taylor, Darke, Shaughnessy and
Whittock) were tried first. This trial was due to commence at Liverpool Crown Court in
September 2008, however before the prosecution formally opened their case Taylor, Darke and
Whittock admitted to conspiracy to defraud. They were bailed to be sentenced after the second
trial. Shaughnessy, who admitted to fraudulent trading, was sentenced on 23rd September 2008
to 16 months’ imprisonment suspended for two years and a seven-year disqualification from
holding a company position. He was ordered to pay £38,000 by confiscation.
The trial of De Rome and Bradley opened in February 2009. De Rome pleaded to conspiracy to
defraud and to making false and misleading statements. Bradley was acquitted by the jury.
Today [19 June] the sentences handed down by HHJ Swift were:
Paul De Rome 46 months in prison
Frederick Taylor 36 months in prison
Christopher Darke 28 months in prison
Ian Whittock 14 months in prison suspended for 2 years
In addition De Rome and Taylor were disqualified from being a Director of a company for 10
years.
Confiscation proceedings are underway against De Rome, Darke, Taylor and Whittock and are
due to conclude in September 2009.
Serious Fraud Office, Elm House, 10-16 Elm Street, London, WC1X 0BJ
Press Office tel: 020 7239 7000/7004/7001/7045 or mobile: 0777 616 0985
Main switchboard tel: 020 7239 7272
press.office@sfo.gsi.gov.uk - or via – www.sfo.gov.uk
IF YOU HAVE ANY INFORMATION
PLEASE EMAIL
Any inquiries or information provided, will be held in strictest confidence.
Hello and let me introduce myself.
I am a former employee and shareholder of Anglo American Metals
I am also seeking information about the following companies:
Foureyes Holdings (US) formerly listed NASDOTC
Foxley Management (London, UK)
Anglo American Metals, Inc (Texas, US)
Sarista Limited (Malcolm Bradley)
QUESTIONS ABOUT THIS WEBSITE CONTACT WEBMASTER
ZADKIN@HOTMAIL.COM