I got called up by a scammer!

Tony Levene explains how you can avoid this 'guaranteed' bond scam.

“Anthony! It's Robert Lloyd calling from London!” says the voice coming from a noisy room full of people with similar telephone scripts.

“Who? What?” is my all too familiar reply.

“Robert Lloyd from Bluegate – you previously spoke to David Knight who presented an opportunity. It was oversubscribed but I have a bond to discuss.”

A speculative investment

When pushed, Lloyd said the previous call was “around September”. So that was all right – this was not cold calling as he could claim we had spoken before (although I couldn’t recall the conversation).

Lloyd told me his firm, Bluegate Ventures recommended stocks, bonds and commodities. Its head office is in Geneva but it has, he said, offices all around the world. He worked in the “Liverpool St” area although the phone and fax numbers he gave me are not in the City but in Norwood, South London, to be precise.

He wanted to “find out more about me” and, needless to say, he was “here for the long term relationship”.

He offered a choice of security or growth. There was a “fully secured” corporate bond and a “more speculative investment” in the carbon market.

I opted for “security” - well, if a total stranger phoning out of the blue from a firm I have never heard of can't offer “security”, then who can?

$100 billion worth of business opportunities

Lloyd told me the “fully secured” bond came from an alternative energy product company in Germany which sold to the UK's National Grid. It had wind farms and contracts in China and the United States. It had building up this global portfolio over 25 years, was the true leader of green energy, and would provide 500,000 jobs with some $100 billion worth of “business opportunities”.

He added that the firm had a strict work ethic and was similar to Peony Capital, a Beijing fund in which Microsoft founder Bill Gates had a significant stake.

The name of this paragon of green capitalism? Sterling Alternative Energy Group – www.sterlingaegroup.com.

And the high yielding corporate bond deal? I could invest on a fixed rate, fixed term basis for one to five years at 8.75% for £20,000 and upwards – 8.5% for smaller sums. I would be paid – tax free – once a quarter – so I would get £224 per quarter on £20,000.

And payments would be made through Commerzbank, one of the biggest and most solid of German banks.

Oh, dear, Mr Lloyd! That's nothing like 8.75% a year. In fact, it's 4.48% (which is not the same!)

And – it may seem I am being ultra-critical here – there were other facts which did not add up.

Award-winning scams expert Tony Levene explains why he's writing a blog about scams and why he is The Scam Magnet!

The facts

The Sterling AE Group is not based in Germany and while its website does not give an address, its phone code is in Texas. It's impossible to find any financial details – necessary were I to invest. It seems unlikely that a “world leader for 25 years” would be able to remain so anonymous.

All I could find of the group online, other than its own rather vague website, were press releases carried on those sites which offer publicity for a small fee. These dated back to last September and most involved an apparent “memorandum of agreement” with a provincial government in China to be involved in a project for 2020. This is far from a real deal.

Sterling AE's website is registered in Nassau, Bahamas, a tax haven and centre of corporate secrecy.

And as for the Commerzbank link, all it means is that there may be an account with the bank. It's as if, promising a friend £224 per quarter, I said it was secure because it will come from Barclays or HSBC or Santander (or whoever I have an account with) even if I have no money. That's nonsense.

The Geneva headquarters of Bluegate, whose website is registered in Hong Kong, is a serviced office building offering mail-drop facilities.

Leaving aside whether this was cold calling, it is against UK law for any firm with a UK address to offer a bond (as well as many other forms of investment) without Financial Services Authority (FSA) authorisation. Bluegate is not regulated or authorised in any way by the FSA.

What does the FSA say?

The FSA won't comment on individual firms but as Bluegate appears to be a boiler room targeting a number of UK investors, I would not be surprised to see it on the FSA warning list very soon.

But the FSA did say: “Buying, selling, advising on and promoting financial investments is a regulated activity so firms operating in the UK need to be FSA authorised. If you get a call out of the blue you should be very wary, but if in your in any doubt - just hang up. You can also call the FSA's consumer helpline on 0845 606 1234."

Putting that another way, in my opinion, if you hand over your money to Bluegate, you'll never see it again – let alone the promised “high yield”.