A specialist London court has found Paul Seakens (60) and Luke Ryan (22) guilty of running a business for fraudulent purposes.
Seakens was also convicted of money laundering and proceeds of crime charges, according to the Crown Prosecution Service (CPS).
Sentencing will take place on 28 May.
1,000% mark up
The duo were directors of a company based in Winchester called Enviro Associates.
They sold voluntary emission reduction (VER) carbon credits to mostly vulnerable individuals via a boiler room operation.
The VERs were essentially worthless but sold at between 200-1,000% mark ups.
They were purchased via a London-based company owned by Seakens called CNI, for very small sums and then sold on.
The money was paid directly into bank accounts of three London-based clearing companies controlled by Seakens; CNI, Tocan and Opus.
After a commission was deducted, the money was then passed back to the boiler rooms.
According to CPS, the clearing companies were created to give the VER transactions an air of legitimacy, so that customers would think that their payments were being made to a safe, Financial Conduct Authority-registered third party.
Cold called and pressured
Jane Mitchell, a specialist prosecutor with the CPS, said: “This was a particularly hideous scam operation, where vulnerable victims lost their life savings on so-called investments that had greatly inflated return claims and no resale market.
“In each of these frauds elderly and generally inexperienced investors were targeted. They were cold called in their homes and pressured into buying the so-called investments by criminals who made them look genuine and trustworthy.
“They were conned: the products being sold were, in essence, worthless.”
She expressed her gratitude to the City of London Police and Hampshire Police for their investigation “which enabled us to prove that Seakens and Ryan were exploiting vulnerable victims out of much needed savings for their own selfish purposes.”
Detective Inspector Paul Curtis, from the City of London Police’s Financial Investigation Unit, said: “This has been a complex and lengthy investigation and I would like to thank the victims in this case for their resolve and determination in seeing it through to a conclusion. We have believed from the very beginning that the evidence clearly proved these carbon credits were sold fraudulently to investors, often through cold calls and high-pressure sales techniques to the vulnerable and elderly.
“Purchasers of VERs were consistently given false and misleading information by the brokers as to their future profitability, and we are pleased the jury were able to convict these greedy and malicious individuals beyond all reasonable doubt for their crimes.”
Detective Inspector Andrew Symes, of Hampshire Constabulary’s Economic Crime Unit, said: “They caused immeasurable loss over a number of years in many different forms and preyed upon, at times, the most vulnerable – not only in Hampshire but country-wide. They deceived their victims by mis-selling of VERs, and grossly inflating mark ups, with little to no opportunity of the investor being able to sell their credits at any point in the future.
“We would like to thank those victims who courageously provided evidence in this investigation over a three-month period. To those affected, and their families, we hope that today’s result brings you comfort that justice has now been delivered.”
