Trustees banned over their roles in schemes that were subject to a suspected multimillion pound pension scam
Tuesday 19 September 2017
Three people have been banned from acting as trustees of pension schemes over suspicions that millions of pounds were scammed from investors using schemes of which they were trustees.
Timothy Walker, Desmond Cheyne and Macalister Lindsay have all been banned by The Pensions Regulator (TPR) from ever again acting as a trustee because of their links to the Milton and Carrick Harbour occupational pension schemes. The men’s names have been added to TPR’s register of prohibited trustees.
TPR has today published a determination notice (PDF, 152kb, 24 pages) explaining its action to highlight the danger of scams and has urged pension savers, trustees and administrators to be aware of them.
Members of other pension schemes were encouraged to transfer their pensions into the Milton and Carrick Harbour schemes. TPR believes the trustees then invested funds held by the pension schemes in high-risk, unregulated investments in the UK and overseas without the members’ knowledge. Among the investments were land and failed hotel developments in Scotland, acquired at grossly over-inflated prices.
The Determinations Panel found that Mr Lindsay showed “reckless disregard for his obligations” and “did know, or should have known that pension liberation was at least a likely explanation” for activities in the schemes for which he was a trustee.
The panel found that it was “more likely than not Mr Walker was complicit in the pension liberation activities”. It also concluded “that Mr Cheyne’s actions, or lack of them, and the gravity of the consequences for scheme members demonstrated a lack of competence and capability” for him to be a trustee.
Independent pension professionals alerted TPR to their concerns about the actions of the trustees, including reports of suspicious transfers from late 2012 to May 2013 and those involved having conflicts of interest.
Dalriada was appointed by TPR as an independent trustee to the schemes in 2013 and it is working to recover as much of the invested money as possible for the members.
The Determinations Panel ruled that Mr Walker and Mr Lindsay should be prohibited on the grounds that their lack of integrity, competence and capability means they are not fit and proper people to act as trustees of a pension scheme. The panel ruled that Mr Cheyne, who did not contest his prohibition, should be prohibited on the grounds of his lack of competence and capability.
Mike Birch, TPR’s Director of Case Management, said:
“The trustees showed a disregard for their obligations resulting in scheme assets being gambled on high risk investments that are now worth a tiny fraction of what was put into them.
“This has jeopardised the financial futures of the scheme members they were supposed to be supporting.
“Savers have the right to expect trustees to manage their pension schemes effectively. Where trustees cannot or do not do this, we will take action to protect members’ benefits by replacing them and then, where appropriate, ensuring that they can no longer act as trustees.”
The multi-agency Project Bloom taskforce – led by TPR and including the Department for Work and Pensions, the Financial Conduct Authority, HM Revenue and Customs, the Serious Fraud Office, City of London Police and the National Crime Agency – was set up to tackle pension scams.
Visit pension-scams.com for tips on how you can prevent yourself, your friends and family from becoming a victim.
- This case concerns two sets of occupational pension schemes. Six schemes together are referred to in the determination notice as the Milton Schemes and one as the separate Carrick Harbour Scheme.
- In the region of £9 million was transferred from the schemes into investments between November 2012 and May 2013.
- Once TPR became concerned about the activities of the trustees, it appointed Dalriada as an independent trustee to make decisions for the scheme members. Dalriada is continuing to investigate what assets the schemes hold and their value.
- The Determinations Panel – a TPR committee that operates separately and has separately appointed members – decided on 15 December 2016 to prohibit the above three trustees from being trustees of schemes in general under section 3(1) of the Pensions Act 1995. Those involved had the right to challenge the decision within 28 days. When the appeal period had expired, a number of other agencies still had ongoing investigations linked to some of the individuals connected to the Milton and Carrick Harbour schemes. It was agreed that we would wait to publish the determination notice so that it would not affect those ongoing investigations. The prohibition of the men came into force from the moment the panel made its decision and the men were made aware of this.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of TPR’s functions under Part 3 of the Pensions Act 2004 only).
James Glover 01273 662098
Matt Adams 01273 662086