December 2020

Shepherd Cox Director IVA Proposals.  Part One.

Thanks to those creditors of Lee Bramzell and Nick Carlile who have forwarded copies of the Shepherd Cox Director IVA Proposals.  The documents are more than 110 pages long so we have selected some key bullet points.

We see very little attraction for creditors in supporting the IVA Proposals because Lee Bramzell and Nick Carlile are proposing that almost all their assets should be in the “Excluded Assets” section i.e they are not prepared to give them up to the creditors.  Furthermore, there is a very good chance the IVA Proposals are just a stalling tactic to stave off bankruptcy until the time that there can be a ‘Pre-Pack’ administration of Festival Hotels Group Ltd which would leave creditors with nothing.  We fully expect that to happen in 2021.  There is no provision in either of the IVA Proposals that the IVAs of both men should terminate upon any act of insolvency involving Festival Hotels Group Ltd.  Considering that the Proposals are based entirely on one promise i.e that Festival Hotels Group Ltd will make payment in 5 years time, creditors should be protected from underhand attempts to transfer assets. A termination clause is standard in IVA Proposals, but it is missing from these proposals.  The Proposals should be rejected on that basis alone.  

The IVA Proposals contain the following information:

1.  Lee Bramzell has declared personal debts of just over £15m;

2.  Nick Carlile has declared personal debts of just over £19.5m;

3.  Our interest is in the room investors who paid £16m for their bedrooms.  None of those room investors are included as creditors.  In fact, there is barely a mention of room investors other than to explain to creditors that bedroom sales formed one part of the Shepherd Cox fundraising strategy. 

4.  The claim made by the Administrators of the six hotels is not in the list of creditors.  Neither is the claim made by the Administrator for the repayment of unlawful dividends.  The Directors seek to justify the exclusion on the grounds that they don’t agree with the claims made by the Administrator.  The good news is that the Administrator is not bound by the outcome of the IVA Proposals and retains rights to pursue the debts. 

5.  Quite a few of the creditors are inter-linked with Lee Bramzell and Nick Carlile in other ventures.  Their claims are likely to be challenged on the grounds that the IVA Proposals are being padded out with friends, whilst ignoring independent, legitimate creditors.

6.  We note the presence of quite a few creditors from the Jewish community.  It would appear that this group was targeted for debt funding, rather than for room sales.

7.  Lee Bramzell has put his residential property into the ‘Excluded Asset’ category.  He states that he has separated from his wife and that his children spend “at least three nights per week at his house”.  That must make school arrangements very difficult.  Using the presence of children as a reason why a house should be excluded from a debtor’s assets is a fairly common practice.  If we were a creditor we would expect a Witness Statement from his ex-wife supporting this claim because we don’t trust either Lee Bramzell or Nick Carlile to tell the truth.

8.  Nick Carlile has also separated from his wife and owns 50% of the property in which she currently resides.  He is also stating that his 50% share is an Excluded Asset in the IVA Proposal.  What possible reason can there be for him retaining his 50% share when he owes £19.5m ?  He doesn’t live in the house so it is effectively an investment which he wants to keep.

Bearing in mind that both of them are proposing a 5-year arrangement with creditors and that Lee Bramzell’s youngest child is 14, we’re unsure why either of those properties should be excluded from the IVA Proposals.  The proposals cover the next 5 years i.e they claim to be in a position to make the main payment to creditors in 5 years time.  If that is what they have proposed then there is no reason why either of their houses should be excluded from the repayment proposal.

9.  The cars owned by both directors and their current partners are also listed as Excluded Assets.

It appears to us that the Shepherd Cox Directors IVA Proposals include almost nothing for creditors and are skewed to retaining as much as possible for the directors.

So what exactly is being offered to creditors to repay the debts ?

Lee  Bramzell and Nick Carlile own 38% each in Festival Hotels Group Ltd, the holding company for various ‘Festival Hotels’ companies.  The remaining shares are held by Adam Stanborough (9.5%), Daniel Bowden (9.5%) and Elliott Webster (5%).  Elliott Webster is the owner of Luqa Ltd.  These shareholdings are identical to those of Shepherd Cox Hotels (Holdings) Ltd which Luqa placed into administration with Harrisons, thereby depriving room investors of the opportunity for Quantuma to investigate where all their money had gone.

Festival Hotels is currently claiming to operate 10 hotels.  Those hotels are:

1.  The Crab & Lobster

2.  The Bridge Hotel & Spa

3.  The Three Ways House Hotel

4.  The Wroxton House Hotel

5.  The Allerton Court Hotel

6.  The Olde Barn Hotel

7.  The Hallgarth Manor Hotel

8.  The Comfort Inn Sunderland

9.  The New Hobbit Inn

10. The Holiday Inn, Chester West

We say “claiming to operate” because we’re not really sure what role Festival Hotels actually plays in any of these hotels.  The Shepherd Cox Director IVA Proposals confirm that “An unconnected managing agent……has been appointed to manage these hotels and will provide the head office function, to include an in-house finance team and regional operations team”.  This arrangement raises the question why Harrisons granted the licence to operate several of the most valuable hotels to Festival Hotels Group Ltd when all it has done is sub-contract to a separate company.

The crux of the IVA Proposals is that Festival Hotels will “operate” the hotels for the next five years, make a lot of profit and pay creditors whatever dividends are declared for Lee Bramzell and Nick Carlile (which could easily be NIL).  The theory is that the value of the Festival Hotels brand will increase and after five years Lee Bramzell and Nick Carlile will transfer 50% of their shareholdings to creditors, keeping the other 50% for themselves.  The value of those shareholdings (based on the estimates given in the IVA Proposals) barely scratch the surface of the debts owed.  This assumes that Festival Hotels Group Ltd hasn’t been involved in a pre-pack before the 5 year period is up.

So, what they are actually offering creditors is nothing.  Creditors have lent £15m and £19.5m to Lee Bramzell and Nick Carlile.  In return the proposal is that Messrs Bramzell and Carlile keep their assets and issue creditors with a 5-year IOU which may well turn out to be worthless.

The IOU is also reliant upon there being no claims made by room investors against the hotels and/or the parties which have financially benefited from the money paid by investors.  We know that legal action is already being planned.  Creditors who are listed on the IVA Proposals should not assume that claims will not be made by Quantuma as Administrator of a number of Shepherd Cox companies, by room investor groups and others.

To be fair to Nick Carlile he is including some ‘investment properties’ he owns, but even these are suspect.  Mr Carlile’s website describes him as a highly successful property entrepreneur over 25 years, but that doesn’t appear to tally with the asset position he describes in his IVA Proposal.

“I solely own 11 residential investment properties with equity of £207,642 before costs of sale and tax. Valuations of the properties were undertaken by local estate agents, Bell & Co, in October 2020. It is proposed that the properties are sold and the net proceeds paid to the IVA, with the exclusion of four properties which have negative equity”.

The net income available to the creditors is estimated to be less than £140,000.  Meagre pickings for debts of £19.5m.  We admit to being surprised that four properties are in a negative equity position because we were not aware that property values in the UK have fallen at all in recent years.  Mr Carlile is proposing that he keep those properties and they are excluded from the IVA.

Under normal circumstances creditors shouldn’t have any reason to doubt the valuations “undertaken by local estate agents, Bell & Co, in October 2020….”   but where these two men are concerned creditors should doubt everything they are told.

Bell & Co is Bell & Co Estates Limited which operates this website.  This company has only ever had two directors and shareholders, one of whom was Nick Carlile.

Odd that he never mentioned in his IVA Proposal that the estate agent company he used to value his properties was the one that he himself established in July 2019.  This looks very much like a stitch-up job.  A favourite trick of debtors is to get a friendly estate agent to under-value their properties so that they can be bought by a creditor they want to favour, or by a friend who will have a side arrangement with the debtor.  The fact that Nick Carlile has not declared his prior relationship with the firm he claims has fairly valued his property portfolio does not inspire confidence that creditors are being told the truth.

The alternative to the IVA Proposals is the bankruptcy of both men.  The IVA Proposals are keen to push the storyline that bankruptcy would result in a much lower return to creditors, but as it stands we don’t believe it would.   The reality is that the ten hotels are heavily in debt to secured lenders.  The likelihood of any dividends being available to creditors is low, as is the likelihood of creditors receiving any of the proceeds of the promised share sales in 5 years’ time, assuming Festival Hotels Group Ltd even makes it beyond the end of 2021.  In five years’ time the money from share sales will most likely go to the secured lenders, not the creditors.

All considered, the Shepherd Cox Director IVA Proposals offer very little.  The only assets being offered are a handful of properties of a questionably low value which would be included anyway in a bankruptcy if creditors rejected the proposals.  Bankruptcy would also include the residential properties which are currently being excluded in the IVA Proposals and all the shares currently owned by both men.  It’s hard to see any justification for supporting IVA Proposals if they offer no assets, there is the threat of a pre-pack administration hanging over the creditors and there is no IVA termination clause in the event of the insolvency of Festival Hotels Group Ltd.

To view the previous article on Shepherd Cox please click here.

ROOM INVESTOR UPDATE:  Action has now begun on behalf of a large group of room investors.  This is the first of what we anticipate to be a series of separate actions in 2021 against parties involved in the Shepherd Cox hotel room scam.  We are also liaising with the authorities in Taiwan who are prosecuting some of the sales agents involved.  We note that one of the creditors in the IVA Proposals is one of the parties being prosecuted.

UCIS Advice Point News.

Just when we thought we had finished reporting on UCIS Advice Point we discover another very serious situation.  For those who are interested in reading the full UCIS Advice Point story it’s all here on our blog pages.

The latest discovery relates to a man called Andrew Eastham who made contact with a number of St Camillus Care Group investors.  St Camillus is a hotel room scam along the lines of Shepherd Cox, Carlauren Group etc, but with a particularly unsavoury twist.  They buy poor quality hotels and then sell the bedrooms off to the general public for a 400%+ profit.  The sale comes with the usual 5-year guaranteed rentals of 10% per annum which they cannot possibly pay out of the meagre operating revenues.  It’s a scam.  They also include the usual unachievable buy-back promise where there is not a hope in hell of the buy-back ever happening.  We have been investigating the activities of St Camillus Care Group for some time.  We were initially contacted by a Hong Kong investor, and we are now assisting more investors in their attempts to recover their money from the St Camillus group of companies.  We will be publishing a separate article on St Camillus in the near future.

Back to UCIS Advice Point.  Here is an email below from Andrew Eastham who is a key person in UCIS Advice Point:

On Wed, Sep 23, 2020 Andrew Eastham andrew@ucisadvicepoint.org.uk wrote:

Dear Investor,

We are delighted to tell you that funding has now been agreed for your claims to be pursued by [Law Firm].

You will shortly receive confirmation from [Company Name] requesting your confirmation that you are happy for [Law Firm] to contact you.

You will then receive an email from [Law Firm] with all the necessary documents for your perusal and signature.

If you have any issues please don`t hesitate to contact us.

Kind regards,

Andrew Eastham, for UCIS Advice Point

As previously reported, the key member of UCIS Advice Point is Neil Bromage who has also been convicted of a financial crime [LINK].   However, it gets worse.  Andrew Eastham has also been convicted of a financial crime [LINK].

Andrew Eastham is a former solicitor who stole £150,000 from the estate of a deceased client and was sentenced to a 2 year and 8 month prison sentence in October 2018.  He wrote the original will for that client.  What is very concerning is we know in addition to introducing investors to a law firm, Andrew Eastham has also been offering to write wills for investors.  We also suspected that UCIS Advice Point was also involved in using investor details to promote unsolicited investment proposals.

We would ask anyone who has had any contact from UCIS Advice Point to report it to us.  We are aware that UCIS Advice Point has been writing out to investors in a number of scams offering their services.

LATEST NEWS:  We are in receipt of a letter from ‘ANDREW EASTHAM – LEGAL CONSULTANCY SERVICES’ which states that Andrew Eastham is a partner in UCIS Advice Point.

Update 27th February 2021 – Following information received we are satisfied that the UK company and law firm mentioned in the email were not working with UCIS Advice Point and we have deleted their names from the email.

Safe Or Scam has begun an investigation into Texmoore Limited and we would like to hear from investors.

The UK’s Financial Conduct Authority issued a warning in May 2020 advising that Texmoore was engaged in regulated activities without the necessary permissions.  The warning was as follows:

Almost all firms and individuals offering, promoting or selling financial services or products in the UK have to be authorised by us.

However, some firms act without our authorisation and some knowingly run investment scams. 

This firm is not authorised by us and is targeting people in the UK. Based upon information we hold, we believe it is carrying on regulated activities which require authorisation.

Texmoore Limited

Address: 81 Edgware Road, London, W2 2HX

Telephone: 020 7183 9245; 020 3468 4097

Email: admin@texmoore.co.uk

Website: www.texmoore.com

Company Number: 08485143

Be aware that scammers may give out other false details or change their contact details over time to new email addresses, telephone numbers or physical addresses.

Our preliminary investigation suggests that Texmoore Limited and associated companies were running an investment fraud from the very beginning and that there may be some recovery options available to some investors.

We recommend investors contact us via our Contact Page and also report the matter to Action Fraud using this link.

Shepherd Cox Action in Taiwan.

In November 2020, Taiwanese authorities announced the prosecution of two regional sales agent companies involved in the Shepherd Cox hotel room scam.

The companies were Taiwan Soufun and Asia-Pacific International Real Estate.  A local newspaper report on the case can be viewed here (English version will appear).

Singapore and Taiwan were focal points for Shepherd Cox salesmen Adam Stanborough and Dirk Laeremans in the early years.  They became less important as a source of new investors as word began spreading around the region about the rental defaults and broken promises.  Shepherd Cox switched its sales focus away from the Far East for later hotel sales using Gladfish and Buy Association instead.  Dirk Laeremans was the Shepherd Cox Head of Sales for Asia Pacific region.  His name popped up again last month regarding sales of similar bogus investment schemes in the Far East around the same time as he was selling Shepherd Cox rooms.  Safe Or Scam is assisting Taiwanese investors with the Shepherd Cox action in Taiwan and the UK.

In the UK, a report has been made to Action Fraud relating to the non-existent bedrooms sold to investors by Shepherd Cox Hotels (Hartlepool) Ltd.  We obtained evidence that 11 bedrooms sold in 2016 were never constructed as promised in the contracts.  We expect this matter to be taken seriously by the Police.

We have been asked to provide an update on the bankruptcy petitions filed against the Shepherd Cox directors.  Both petitions were adjourned at the request of Nick Carlile and Lee Bramzell to allow representations for Individual Voluntary Arrangements to be made.  An IVA allows for a repayment schedule to be agreed between debtor and creditor, but it requires 75% of creditors to agree.  It also needs the debtor to provide evidence that repayment is possible if they are given enough time (normally several years).  We are aware that the level of claims is substantial.  We expect there to be an attempt to persuade the court that the debt level should be reduced.  It will be very interesting to see whether Luqa Ltd is going to be supporting Lee Bramzell and Nick Carlile in their IVA proposals.

We’ve been informed that Luqa Ltd is financially supporting the activities of Lee Bramzell and Nick Carlile even going so far as to pay bills on their behalf.  It appears they have chosen to support each other because their mutual survival depends on it.

To view our previous article please follow this link

To view a more recent article on the Director IVA Proposals please follow this link

Essex and London Properties Criminal Charges.

It has taken a long time, but finally seven parties involved in Essex and London Properties have faced criminal charges and been named as defendants in a criminal trial.

The seven defendants appeared at Southwark Crown Court on 19^th November 2020.  See below for a copy of the court hearing details.

We have been investigating the Essex and London Properties scam for more than two years (see this article in 2019) and are working with a group of investors on a civil claim against some of the parties involved.  The claim does not involve the seven men charged above, although we will see what comes out at trial and whether they are convicted.

We note that nobody associated with Jade State Wealth Ltd is on this list.  That is a surprise. Jade State Wealth and a whole host of other Graham Arnott companies are, or have been, involved in a network of companies used by scammers to help facilitate investment scams.  Those companies are linked to at least 12 investment scams that we know.  If anyone has any information on investment scams, frauds or defaults which involve a Graham Arnott company please let us know.  Mr Arnott’s reach extends beyond providing escrow bank accounts, payment services, the preparation of company accounts and provision of smokescreen “security trustee” services (which when called upon provide no protection whatsoever to investors).  He was also a director of Pactum Law Ltd, a law firm which represented Yoni and Vanessa Bashorun who ran a scam sales agent company.  We received some letters from Pactum Law threatening legal action a few years ago when we were exposing the fake digital currency ‘European Property Coin’.  Graham Arnott’s company provided financial services to that scam too.  Also, and it by no means a coincidence, one of the defendants named above, Florian Pierini, went on to set up European Property Coin.  The scammers network is a relatively small circle with the same names cropping up all the time.

More on Graham Arnott and his companies early next year.  We intend to publish articles on the parties which provide services to scammers.  It will not be those parties which get tricked once or twice into providing a service to scam investments, but those who do it time after time and are never held to account.

Back to the Essex and London properties criminal trial.  All seven of the defendants are charged with:

1.  Conspiracy to defraud investors of Essex and London Properties Ltd; and

2.  Conspiracy to launder money (as a result of the fraud).

Mr Razaq alone faces a third charge of acquiring criminal property as a result of the fraud.

Mr Tanveer pleaded guilty to counts 1 and 2 above.  Mr Razaq did not enter a plea at the hearing, but the remaining five defendants pleaded ‘not guilty’.  We will be publishing an article on the defendants before the end of the year.

We are advised that the next court hearing is in May 2021 with a preliminary trial date scheduled for February 2022.  Clearly the criminal case will take a long time before it is finally resolved.  We hope the civil case will reach a conclusion much sooner.

To view a more recent article on one of Florian Pierini’s other scams please click here.