Two former directors of illegal pension introducer firm Avacade have been given a six-year directorship disqualification each.
On 27 August 2021, Judge Halliwell in the Manchester high court said, that from 17 September 2021, Craig and Lee Lummis cannot be involved in the promotion, formation or management of a company without the permission of the court.
The father and son duo were part of the management team of pension introducer firm Avacade, which was ordered alongside Alexandra Associates and fellow director Raymond Fox to repay £10.7m ($14.7m, €12.4m) to clients who were induced to transfer their pensions into Sipps.
The Insolvency Service said that Avacade Limited was incorporated in January 2010 and traded as Avacade Investment Options. It provided unregulated investment brokering services, including free pension reviews and informed clients of Sipp schemes to invest in.
One such investment was in Costa Rican forestry plantations via company Ethical Forestry Limited. Its directors were also banned for six years in 2019 after withdrawing millions of pounds through a tax planning scheme.
Avacade entered into liquidation in November 2015, triggering an investigation by the Insolvency Service.
‘Total disregard’
The Insolvency Service said that the Lummis’ had a duty to act in the interests of the introducer firm’s creditors but, instead, they sold Avacade’s client book to a connected company for more than £150,000, when they “most likely knew the company was insolvent”.
Rather than the company receiving the payment for the database, just over £75,000 was deducted from the directors’ loan accounts. Investigators also discovered that, between August 2014 and May 2015, Avacade received more than £1.6m in commissions, and the two banned directors received £647,000 each to reduce their loan accounts.
Rob Clarke, chief investigator of the Insolvency Service, said: “It’s clear that directors must treat all creditors fairly when they know their company is insolvent.
“Craig and Lee Lummis totally disregarded their duties by ignoring the ongoing investigation into the tax planning scheme and ensuring they benefitted personally from Avacade’s only assets. This failing led to them each being banned from acting as a director for a significant period of time and should serve as a warning to other directors who follow a similar path.”
Avacade, Craig and Lee Lummis, and Alexandra Associates failed to overturn a judgement ordering them to pay restitution to clients.
In August 2021, they said they were considering taking the case to the Supreme Court.
