A £5.8m pension liberation scam that used shares in a celebrity greeting company to transfer assets has been taken over by Dalriada Trustees.
The Pensions Regulator appointed Dalriada as independent trustee to the London Quantum Retirement Benefit Scheme, which invested in VIP Greetings. VIP Greetings delivers personalised video messages from celebrities such as former international footballer William Gallas and former Pussycat Dolls member Jessica Sutta to paying customers.
TPR found that approximately £5,800,000 of new members’ accrued pension savings were put at risk through being transferred into the London Quantum Scheme between August 2014 and May 2015. Introducers up to 30 per cent commission for bringing assets to the scheme.
London Quantum RBS used shell companies to buy and sell ‘back to back’ interests in VIP Greetings to liberate £600,000 from the scheme. There is no suggestion that VIP Greetings or any of the individuals working for it were in breach of any rules or laws, or involved in the pension liberation exercise.
TPR found that the original trustee, Dorrixo Alliance (UK) Limited, had a ‘serious disregard to the obvious risks that members might be misled about the true nature of the investments held by the scheme and the risks that came with those investments’. Stephen Alexander Ward and Anthony Salih are the directors of Dorrixo Alliance (UK) Limited.
TPR says the investments selected exhibited inappropriately high levels of risk which members were not made aware of. TPR said it was questionable whether or not documentation actually existed in relation to some of the scheme’s investments, and called into question their legitimacy.
The scheme was promoted to potential new members by introducers, including cold callers, who were paid by commission, sometimes up to 30 per cent, in breach of trust. No auditor was appointed to the scheme and Dorrixo failed to take proper advice on the investments.
The London Quantum Retirement Benefit Scheme is also known as the London Quantum Occupational Pension Scheme and the London Quantum Scheme. Since Dorrixo became trustee of the scheme in April 2014, member numbers increased rapidly from 3 to over 90, raising TPR concerns about the protection of the scheme’s assets and members’ pension savings. The members joining the scheme after April 2014 had no employment link to any company involved with the scheme.
During Dorrixo’s trusteeship the scheme was under the administration of Premier Pension Transfers Limited – an entity also under the directorship of, and owned by Ward. Dorrixo delegated day-to-day administration and part of their trustee powers – including the authority to enter into investment contracts – to Gerard Associates. Over a six-month period Dorrixo received £63,000 from the scheme in fees despite there being no evidence of what Dorrixo was paid for doing.
Dalriada discovered there were over 600 files relating to potential new members at various stages of progression to join the scheme.
TPR director of case management Nicola Parish says: “The concerns we received about the scheme highlighted worrying factors regarding its governance.
“This case should act as a reminder to all savers, pension scheme trustees and administrators to remain alert to the dangers of transferring pension savings in order to access unrealistically high returns often associated with exotic sounding investment opportunities.”