The court case against the managing director of Jersey-based IFA firm Lumiere Wealth finally started on Tuesday, nearly two years after the firm was ordered to be wound up.
In a trial that is expected to last six weeks, Chris Byrne is facing 18 charges, all of which he denies, reports local newspaper Bailiwick Express.
He first appeared in court in October 2016 when he was charged with falsely obtaining money from a pensioner.
The current trial centres on nine investors, many of whom were previous clients of Byrne’s from other advice roles, friends, or friends of friends.
In total, he is accused of losing £2.73m ($3.5m, €3.1m) of client money.
Investors were told in January 2017 that it was “highly unlikely” that they would get their money back.
Under pressure
The prosecutor, advocate Simon Thomas, reportedly painted a picture of Byrne as a man under increasing pressure to meet targets, plug financial holes and deal with growing regulatory scrutiny.
In December 2015, two investors became so concerned about their investment that they demanded their £250,000 back.
Rather than have them go to the Jersey Financial Services Commission (JFSC), it has been claimed that money was ‘found’ to refund them. This left Byrne having to find more investors to cover the payments.
Investing in Brazilian debt
The fate of Lumiere has been closely linked with Guernsey-based Providence Global, which collapsed in August 2016.
A subsidiary of US firm Providence Group of Companies, it promoted two funds that offered investors returns of up to 28% from a Brazilian factoring operation, where company debt was purchased at reduced prices.
The scheme was also promoted by Lumiere.
According to the prosecution, Byrne failed to tell investors that it was high risk and only suitable for experienced investors.
Many Lumiere investors were elderly or vulnerable, only had a small amount of money to invest and were allegedly financial cautious.
Byrne also neglected to tell investors that Providence was a major shareholder in Lumiere and that he was getting commission for pushing investments into the fund, reports Bailiwick Express.
Providence boss pleads guilty
Byrne is not the only person to stand trial over the fund.
The chief executive of Providence Companies Group admitted to orchestrating a $150m (£117.6m, €131.7m) scam that duped mostly elderly and vulnerable people across the world.
Antonio Buzaneli entered a guilty plea for one count of conspiracy to commit mail fraud to a court in the US on 19 April 2018.
FBI acting special agent in charge Robert Bone said the “vast and sophisticated fraud scheme truly circled the globe, touching venues as near as St Louis Park, Minnesota and as far as Brazil, the United Kingdom and China”.
Providence opened offices and affiliates around the world; including in London, Guernsey, Hong Kong, Taipei, Shanghai, Singapore, Vancouver and Panama.
