Sam Eustace has been disqualified as a director for 11 years, according to the Insolvency Service.
He was director of Kingsman Property Ltd, which promised landlords guaranteed rent all year around as well as offering investors the opportunity to receive annual returns of 30% by investing money into the rental house for multiple occupancy (HMO) sector.
The company, set up in October 2015 originally as Samuel James Ltd, changed its name to Kingsman Property Ltd in May 2017.
The business took at least £6.7m ($8.8m, €8.03m) from would-be investors before it went into liquidation in August 2019, the Insolvency Service said.
An Insolvency Service investigation found that between October 2016 and March 2019, Kingsman Property paid out over £3m to investors, but “that this was funded by money received from new investors rather than any actual return on investment, similar to a Ponzi scheme”.
The company accounts showed the business was in fact insolvent as early as June 2017, with debts totalling around £700,000. It owed nearly £5m when it eventually went into liquidation.
The Insolvency Service added: “Despite this, Sam Eustace paid himself dividends from the company between November 2017 and June 2019 amounting to nearly £400,000.”
Ban
Kwasi Kwarteng, secretary of state for business, energy and industrial strategy, has accepted a disqualification undertaking from Sam Eustace after he admitted causing Kingsman Property to trade with a lack of commercial probity, including offering false representations as to returns on investments.
The ban runs from 24 March 2022 and lasts for 11 years.
The disqualification undertaking prevents him from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.
Martin Gitner, chief investigator at the Insolvency Service said: “Sam Eustace knew he was taking people’s hard-earned savings as part of a scam and has left countless people out of pocket.
“The Insolvency Service will not hesitate to investigate and use its powers against those engage in this kind of fraud.”
