A Serious Fraud Office (SFO) case against two alleged fraudsters has collapsed after a jury failed to agree on a verdict at the retrial.
Jared Bentley Brook and Lincoln Julian Fraser, former directors of Imperial Consolidated Group, were today acquitted of causing the collapse of the international investment company in 2002 which left a £150m black hole.
The verdict follows their retrial which concluded on 28 June 2010 after 150 days.
A jury had already returned a 'not guilty' verdict on one count of conspiracy to defraud. However, they failed to reach verdicts on the remaining counts of conspiracy and fraudulent trading and were subsequently discharged. The SFO decided not to seek a further retrial.
A SFO case against a third director, William Godley, for his role in a conspiracy to defraud investors continues.
The fraudulent scheme was operated in the UK from former RAF Binbrook in Lincolnshire and involved "sophisticated" sales techniques in less demanding regulatory environments, the SFO says.
It induced money from investors on the basis the UK limbs of the business were extremely profitable and worth investing in.
But the UK businesses, which claimed to make money from various consumer loan schemes, were loss making and increasingly insolvent, an SFO investigation found.
Less than half of investors' money was loaned out by the UK loan businesses. It was instead channelled in overheads and expenses, as well as extremely speculative mining interests which investors knew nothing about.
The victims of the fraud were investors who lost their money on the collapse of Imperial. They came from a range of backgrounds and countries, according to the SFO.
Only those investors who redeemed their funds before the collapse of Imperial received their original capital back with profits, and those redemptions were funded by new investments. Most investors lost all of their capital.
When administrators took control of Imperial, they estimated they would only be able to pay back investors at most 5% of their original investment.
SFO director Richard Alderman says: "This case was a very complex one with many victims and it was clearly right for us to have taken this case and to have conducted the first retrial.
"It is very disappointing both for the victims and the defendants that the jury could not reach agreement on a number of the counts on the indictment.
"I have decided that it would not be right to apply for a second re-trial. Proceedings continue against Mr Godley who will be sentenced for the role he has admitted in this case."
The SFO considered whether civil recovery against Jared Brook and Lincoln Fraser would be appropriate but decided there would be insufficient assets to meet such a claim.
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