Five fraudsters who used puppet trustees as a tool to steal almost £3m from a final salary pension fund have been jailed for a combined total of 26 years.
A total of £2,918,915 was stolen from the pension fund of CW Cheney & Son, a small Birmingham based manufacturing company, in 2000 after it was acquired by Cumberland Leasing, a company controlled by two of the convicted men, Kevin Sykes, and Simon Maya. By this time Cheney & Son was no longer a going concern and its single biggest asset was its pension fund of £3.1m.
Trials of seven defendants were held in 2004, with Kevin Sykes, Simon Maya, Trevor Farrell, Altaf Sayed, and Ian Selby all found guilty of conspiracy to steal. Prison sentences ranged from eight years for Sykes, the main instigator of the theft, who pleaded guilty before the trial, to just three years for Farrell.
Of the remaining two defendants Cassius Powell, a director at Cheney and Highland Regal, was acquitted of the charges, while Adrienne Morris was not prosecuted after her co-defendant Sykes opted to plead before the trial. As she played a lesser role in the crime, the Serious Fraud Office (SFO) decided not to proceed in a trial of her alone.
After the acquisition of the firm, by Cumberland Leasing, £700,000 was withdrawn from the pension fund after the original trustees stepped down and were replaced by Morris from an insolvency firm called The Practice, and Morgan Matisse Solicitors, a company which was found to be both acting for Sykes and based at the same address as The Practice.
A month later another £50,000 was paid to The Practice, at the same time as Morgan Matisse was replaced as trustee by Morris’ son Ryan, with Sykes appointed as his power of attorney.
In September 2000, Sykes then sold Cheney & Son to Selby’s company Highland Regal Distillers. Both Morris and her son resigned as trustees, while Selby helped Sykes remove a further £2.2m from the fund. A large part of this was used to pay off creditors at Bricmore Investments, a firm owned by Trevor Farrell and Altaf Sayed.
The fraud was discovered in October 2000 after fund actuaries provided information to the Occupational Pension Regulatory Authority, which intervened and appointed an independent trustee. By December the case had been referred to the SFO and an investigation was launched with West Midlands Police. Charges were brought against the defendants in the Spring of 2002.
Reporting restrictions have been in place since the convictions as Sykes has recently been standing trial for fraudulent trading in a Department of Trade and Industry case, where he was operating under the business name White Knight. For that offence, he was sentenced to four years, which will be served concurrently with his previous sentences.
Phillip Blakebrough, assistant director at the SFO, says: “This was a callous and ruthlessly executed fraud designed from the start to steal the Cheney pension fund by setting up a system of puppet trustees who instead of protecting the fund helped to plunder it. Together with the West Midlands Police Economic Crime Unit we unravelled the mechanism of the fraud and produced compelling evidence which brought about an appropriate and satisfying judicial conclusion.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected].IFAonline
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