The fraud involved the running of an electrical supply business targeting the hotel sector and convincing investors that because of the credit crisis it was difficult to obtain finance from the banks to purchase goods for which the company already had orders.
Investors were also told that obtaining finance from banks took time and they could make a bigger profit if the orders, referred to as deals, could be completed quickly and thus with higher returns.
The business, Saunders Electrical Wholesale Ltd, (SEWL), purported to be a successful supplier of electrical goods to blue chip hotel chains such as the Marriott, Hilton, Holiday Inn and Park Plaza.
The Serious Fraud Office (SFO) said around £45m ($65.1m, €58.4m) was invested in the scheme.
Misleading claims
“SEWL had the guise of respectability in that it supplied electrical goods to high profile hotels. However, this trade was fairly minor, and not to the high levels claimed to potential investors, the SFO said a statement.
Two men were convicted of a conspiracy to defraud investors in the case bought by the SFO and a third pleaded guilty ahead of the trial.
David Green, director of the SFO, said: “These three individuals preyed on investors, including vulnerable victims from their own communities. They had parted with tens of thousands of pounds, and in some instances their life savings.”
Sentencing will take place at a later date. .
