HMRC is chasing more than 200 pension savers involved in a £12 million pension liberation scam wound up in the High Court.
KJK Investments Ltd encouraged retirement savers to buy shares in the company with the promise of a 6% return on investment, according to consumer web site Pension Life.
Another company G-Loans, offered the savers loans to buy the shares.
But the way the transaction was structured meant G-Loans could never repay as KJK lent the money to G-Loans to lend to the investors with accrued interest.
The bad debt then meant KJK could not pay a dividend to the 209 shareholders, who lost their money.
Video campaign against fraudsters
The tax man is now demanding investors who were aged under 55 at the time should pay tax at 55% because their switch into the scheme broke pension transfer rules.
The details of the pension liberation scam were revealed as The Pensions Regulator released a video warning savers not to fall victim to fraudsters.
Victims of pension scams tell their stories in the film.
Launching the campaign, Pension Minister Ros Altmann said: “Thousands of people have their lives ruined by fraudsters.
“Police, the government and regulators are ceaselessly working to shut illegal pension schemes and put these fraudsters before the courts.”
Lies and false promises
She warned that reputable financial firms do not send out mass emails or cold call potential customers with offers of a pension review.
“Yes reputable firms will help you with financial planning, but they do not try and trick you out of your cash with lies and false promises,” she said.
“Too many people are still falling for these scams and savers need to find out how to protect their money even if a recommendation to use an adviser comes from trusted friends or family.
“Don’t be next by falling for the fraudster’s lies.”
The video shows a retirement saver calling the Pension Advisory Service who had signed more than £100,000 over to scammers who lured him with a free pension review offering an 8% guaranteed return on an overseas hotel complex investment.
Despite widespread publicity, two videos posted by The Pensions Regulator on YouTube have only had 3,426 views since July 2015.
Here is the video below.
