How this scammer beat his directorship ban

This scammer had already been banned from being a director of a company for 13 years. So how was he able to run another wine investment scam, costing victims £3 million?

I have often written about investment frauds. But the real scam is the ease with which perpetrators operate in the UK. It's all too easy to convince victims that the firm to which they have handed their money is legitimate.

For a minimal outlay – a few thousand pounds at most – rip-off merchants can equip themselves with an impressively titled UK company, a prestigious address in the City or the west end of London, a glossy website and a great looking brochure.

Take the case of Stephen Pierre Boyd, who was acting as director for Wine Traders International, a bust company which persuaded investors that they could do well out of wine. Wine Traders International was wound up in the public interest in 2010 by the Insolvency Service, but it took until a few months ago for Boyd to come to the authorities' attention.

And even then, no one looked at how Boyd had cheated his way through the checks that were supposed to be in place. For Boyd had already been named and shamed as dishonest, and banned from running a company, sanctions that seems to have made no difference to this wine scam operation. 

How did he get past the ban?

These scams have been around for around 15 years, including the whisky and champagne variants. And there is no sign of them stopping as this is easy money for cold callers. No legitimate wine merchant ever phones out of the blue, let alone offering a quick and easy route to riches. And in the case of Boyd's operation, the wine was, according to the Insolvency Service, either non-existent or over-priced, in common with other fraudulent drinks investments. 

When Boyd set up his scam, he was already under a 13-year ban from being a company director. So how did he do it? The clue is contained in the word “acting” in his job title. This word is used deliberately.

Boyd was not a director of this company. His name did not appear on Companies House returns, difficult due to his previous ban from functioning as a director. But there is a simple workaround. Boyd installed people without a record as official directors, “clean skins”, young people without a business record. 

This ease of installing a blameless person left him to pull all the strings behind the scenes. It is all so easy to establish an impressive sounding UK company. There are precious few checks on directors, so even the tiny minority who are disqualified can set up either by changing their name and date of birth, or by installing a puppet. It is even easier than it used to be now that directors can give the company's registered address as their own instead of where they really live.

This rule change was brought in to protect directors of companies involved in animal testing from attack at home, but has had the unintended consequence of providing more cover for conmen.

As a director of a charity, I know just how minimal the checks are – no one even verified my signature on the Companies House paperwork. Of course, virtually all directors are honest, but we have complex money laundering rules to negotiate every time we open a savings account. 

Is there any point in another ban?

Boyd, who stole around £3 million from victims, also used a number of false names including Pierre Boyd, Steve Gordon and Dave Martin. Beyond that, he set up a phoney concern called Bradshaw & Karr into which around £1 million of purchases were transferred in a deal which was then painted as creating value for the investors.

This was not even a registered company so it was even simpler to create.

Boyd has now been banned from being a director for the maximum disqualification term of 15 years on top of his previous prohibition so he cannot be director until 2028. Whether that is sufficient to stop him from trying again is anyone's guess. 

Will any of the victims get their money back? Sadly, the answer is no.

For even when the perpetrators are known, named and shamed as in this case, the chances of financial compensation are low. Those involved in classic investment scams – the phone call, the glossy website and brochure, the promise of high risk-free guaranteed returns – spread their loot among those working in their boiler rooms.

Commission is usually around 50%-60% of the take for the sales staff. What's over is hidden in an impossible to penetrate web of offshore accounts, companies and trusts. And while victims take the bus, Boyd himself got a top of the range Porsche to drive around in. 

Will Boyd be “driven out of the business environment” as the Insolvency Service hopes? Maybe. But it might have been helpful to have his photo and home address as well as his all too easy to change name.

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