Acquittals in Ponzi Prosecution Across the Pond: Jury Acquits Imperial Consolidated Execs Fraser and Brook
UK citizens Lincoln Julian Fraser and Jared Bentley Brook, former executives with the Imperial Consolidated Group (ICG) were acquitted today at the Old Bailey at the conclusion of a nearly nine month trial, according to the Guardian and the Telegraph. The jury acquitted Mr. Fraser and Mr. Brook of one count of conspiracy to defraud, and deadlocked over another conspiracy charge and a fraudulent trading charge.
The fraud charged against Mr. Fraser, Mr. Brook, ICG (headquartered on a Royal Air Force base in Lincolnshire, England, with offices in Europe, Australia and the Caribbean) and others, involved offshore investments in South American mining operations and havens such as the British Virgin Islands and Greneda, in what has been alleged to be Britain's largest Ponzi scheme. From 1998 through 2002, approximately 3,000 investors around the world invested nearly £253 with ICG on the promise of high-yield returns of up to 36 percent and "total asset protection." The loss to investors is alleged to be £150 million. One investor alone, Yuichi Yoshida of Japan, invested £16.7 million. The defendants were also alleged to have provided false information to investors, including falsely inflating the alleged value of mining interests in South America, and publishing false or misleading performance figures in the Financial Times. The defendants allegedly used investment monies to cover overhead and expenses, and for investments in failed mining interests in Argentina.
ICG's business declined precipitously when a Spanish newspaper article allegedly linked ICG to Osama bin Laden in 2001. The company failed in 2002.
The British Department of Trade and Industry disqualified Mr. Fraser and Mr. Brook from acting as directors of ICG for alleged unfit conduct relating to a failed hotel business in Morecambe, Lancashire, England.
The Crown has attempted to prosecute Mr. Fraser and Mr. Brook three times over eight years. The first trial of Mr. Fraser and Mr. Brook two years ago ended in stalemate, forcing the judge to discharge the jury. The second trial was abandoned by the Serious Fraud Office (SFO) as a result of legal errors. The SFO has seven days in which to choose to seek a retrial, but has announced that it will cease its efforts to prosecute Mr. Fraser and Mr. Brook, the investigation and prosecution of whom has cost British taxpayers approximately £10 to £20 million.
A co-defendant, Bill Godley, pled guilty to a charge of conspiracy to defraud in 2007. Godley claimed to have posed as a dynamic entrepreneur and to have transformed ICG into an international business empire. Godley is expected to receive approximately three years in gaol.
Mr. Fraser's and Mr. Brook's former solicitor, Michael John Harvey, was struck off by the British Law Society in a disciplinary proceeding for alleged involvement in Mr. Fraser's and Mr. Brook's dealings.
