An elaborate scam to persuade wealthy investors to stake their cash against growing truffles cheated more than 100 people out of £9 million.
The investors were conned into paying between £795 and £995 for saplings inoculated with truffle spores when the market rate was only £7.95 to £9.95.
Investors were told their money would go towards funding oak and hazel saplings that would host truffles on a commercial scale at special plantations worldwide.
However, the promises were false as investigators from the Insolvency Service found no harvesting or cultivation had taken place despite the scheme running from 2012.
Investors were also miss-sold the investment through unsubstantiated claims, such as having the option to trade out at any time of their contract and one investor was told they could expect a 200% return over a 10 years.
Companies wound up
But investors had little or no exit from the scheme and had no contractual relationship with the plantation companies responsible for maintaining the truffle trees for the contracted 15 years.
Five companies connected with the truffle scam were wound up by the High Court and named as Viceroy Jones New Tech Ltd, Viceroy Jones Overseas PCC Limited, Westcountrytruffles Limited, Truffle Sales Ltd and Credit Free Limited.
The court heard that Viceroy Jones New Tech targeted investors with pension savings from a network of unregulated financial advisory firms.
The victims were persuaded to transfer their pension funds into small self-administered schemes (SSAS) run by the firms.
Victims transferred £9 million into offshore bank accounts, with most paid out as commissions to sales people. None has been recovered.
A ‘significant amount’ of the missing money was paid to unregulated advisors, Truffle Sales Ltd, as well as to George Frost and his brother Brian, who was a former director of Westcountrytruffles.
Credit Free Limited, had not participated in the truffle scam but received funds raised in the scheme, along with commissions received from a separate carbon credits scheme also operated by George Frost and Viceroy Jones Limited.
Using these funds, Credit Free Limited paid more than £1.8 million over five years to George Frost and to former director, Jeffrey Hawes.
Cheryl Lambert, Chief Investigator for the Insolvency Service, said: “The companies and those behind them have showed no remorse in their calculated plan to scam investors of their pension pots. Although the Insolvency Service investigation was hampered by a lack of cooperation, the investigation pieced together the numerous layers in which the scam was wrapped.”