The UK’s Insolvency Service has banned two bosses who defrauded £9m ($11.6m, €10.8m) from investors who thought their money was invested in the American property market.
Kevin Antony Neil and Peter Leonard Shuttleworth were each handed 11-year directorship disqualifications at the High Court of Justice in London on 11 February 2020.
Effective immediately, Neil and Shuttleworth cannot act as directors or become involved, directly or indirectly, in the promotion, formation or management of a company without the permission of the court.
US property investment
The service investigated Neil and Shuttleworth after their company, Colonial Capital Group, entered liquidation in February 2018.
Investigators found Essex-based Colonial invited investors to subscribe to bonds with the incentive of a 12% fixed interest rate per annum.
Bondholders were told their payments would be invested into Colonial Capital Group, which would then forward the funds to a connected, but unnamed, American company.
The US company would use the money to buy and renovate distressed properties in America and, once the properties were renovated, they would be rented out or sold.
Income secured from rents or proceeds of the sale would then be passed back to the bondholders.
Between February 2014 and March 2017, Colonial Capital Group secured just over £9m from investors.
No funds invested
Investigators, however, “unearthed that no funds were invested into the connected American company over whom Colonial Capital Group would hold security”.
Some £6.6m was paid, via an unsecured loan, to a separate company in the UK that shared the same directors as Colonial.
A further £2.3m was paid to a separate connected American company “over whom Colonial Capital Group held no security”.
The service found that the scam had attracted 244 investors who are owed approximately £11m, which includes unpaid interest.
Stark warnings
Dave Elliott, chief investigator for the Insolvency Service, said: “Whenever anyone injects funds into an investment opportunity, at some point they will want to see some form of returns.
“However, these unsuspecting victims saw no returns on the millions they invested and instead Kevin Neil and Peter Shuttleworth used the funds to pay other connected companies.
“[The] bans are substantial disqualifications, severely curtailing the ability of Kevin Neil and Peter Shuttleworth from running companies and should serve as a stark warning to other directors that they shouldn’t attempt to hoodwink their investors.”
