Martin Kinsey and Stephen White allegedly put client money into three funds managed by Montague Morgan Slade (MMS), which, according to the court documents, were a scam.
The funds in question are the MMS Absolute Performance Fund, the MMS Diversified Fund and the MMS 1095 Fund.
The court papers show that the fraudulent fund was established by three individuals; Anthony Heald, Michael Brown and Gordon Spedding who together owned MMS Enterprise, a British Virgin Islands-based company, with a Wall Street office in New York.
According to the summons, which was issued by the New York court on 18 April, the accused, including White and Kinsey, “intentionally combined or agreed to improperly deprive plaintiffs, and other MMS investors, of their funds”.
In its overview of the case, the court documents state: “The key overarching fact that must be understood in order to understand the MMS Enterprise is that there is no MMS beyond the Wall Street virtual office….In reading the prospectuses for MMS’s various funds, it is easy to forget that there is no fund, there are no files, there are no investments; it is all a sham created by Brown, Heald and Spedding…”
The court documents state that White, while working for ExPat Solutions, put “at least nine investors” into the funds “with a total investment of approximately $3.9m”. The document added that a further four investors with a total investment of approximately $1.1m were also put into the fund “by someone at ExPat Solutions, perhaps by White but also perhaps by someone else”.
In addition, the document stated that “White and ExPat Solutions both received money from MMS’s bank account at Jyske Bank, totalling nearly $200,000”.
It is also alleged that one of the main “conspirators”, Spedding, worked at ExPat Solutions’ office in Dubai and that ExPat Solutions “assisted MMS with its website, otherwise consulted MMS, and shared office space with MMS.” It added that Spedding was billed, on behalf of MMS, for $74,870 by Expat Solutions.
While in Dubai, White also worked for advisory group Globaleye, which he left in 2003 to form Expat Solutions with Kinsey.
The court documents accuse Kinsey of similar offences and state that he put “at least 11 investors in MMS with a total investment of approximately $2.1m”. However, it said Kinsey was paid less than $1,000 from MMS’s bank accounts at Jyske Bank.
Currently White and Kinsey are working as IFAs based in Prague.
Both White and Kinsey have denied the claims, stating that the fund, as far as they were aware, is not fraudulent. Speaking to International Adviser, both claimed they have themselves invested substantial personal money into it.
According to the summons, the accused have 30 days to answer the claims.
