During a Southwark Crown Court hearing last week, former Arck partner Richard Clay, 51, was ordered to pay more £344,000 to the UK’s Treasury department, despite making 4.87m from the fraud.
His former lover and business partner Kathryn Clark, 53, was ordered to pay £218,000.
The pair, which were convicted of fraud and forgery charges last year, must settle the confiscation orders within three months with the proceeds being paid out to their victims.
Unregulated property investments
In 2012, the Serious Fraud Office (SFO) announced that it was investigating Arck after investors faced losses of around £50m following the liquidation of the firm, which invested pension savings through Sipp provider HD Sipp.
Clay and Clark used marketing company Arck LLP to push unregulated financial products on individuals and IFAs.
The pair which were also two of the trustees at HD Sipp, then funnelled the money through the Sipps provider which went into liquidation in June 2014.
Estrela Santiago, Paradise Beach and Joyston, are just a few examples of the Arck schemes investing in holiday properties.
The unregulated investments offered high returns, with no risk to capital, to about 700 investors between 2006 and 2011.
In reality, Clay used the money to fund his lavish lifestyle or ploughed it into various other failed money-making schemes.
Describing him as the “driving force” behind Arck, the SFO said Clay is currently serving a prison sentence of 10 years for his role in defrauding investors out of their money, pension funds and life savings.
Clay, who spent 11 years in South Africa between 1994 and 2005, is still wanted by South African police for allegedly offering illegal money changing service to cheat South Africa’s financial controls.
According to the case hearing, on his return to the UK he lied on his job applications to get a job in the financial services industry.
Meanwhile, Clark was handed to two year suspended sentence for her role in the scheme which included creating forged bank statements that were used to dupe investors who were concerned about their investments.
She was spared jail after the court heard she had been subject to extreme “emotional manipulation” by Clay throughout their relationship.
Clark has been banned from directorship for 14 years, while Clay has been banned for 15 years.
FSCS claims
In September last year, the Financial Services Compensation Scheme (FSCS) said it was looking in to claims against Arck and HD Administrators, which is liable for losses in relation to Arck investment schemes held in the HD Sipp.
At the time, investors could potentially make two separate claims – either against the financial adviser on the grounds they gave bad advice, or a claim against HD Administrators relating to its role as operator of the HD Sipp.
