Merydion Hotels Scam

Merydion Hotels Scam

Earlier this week, investors in the four Merydion hotels scams (the Northop Hall Country House Hotel, The Belgrave Hotel in Chester, the Durker Roods Hotel in Meltham, and the Star Hotel in Great Yarmouth) were treated to a piece of theatre in the form of a letter between a law firm and its sales agent client.  The sales agent sent the letter to all investors.  The letter was choreographed to make it look as if it was between a law firm and a well-meaning sales agent, but its intended audience was the investors, hence the fact that the sales agent sent it out on the day it was written.  There is an air of urgency because there are a number of events going on behind the scenes.

The aim of the letter was:

1. To try to put investors off insolvency action and a subsequent investigation into an estimated £6m of investors’ money which is unaccounted for;

2. To make out that Michael McMahon and his associates were innocent victims of the Covid-19 pandemic and should be granted immunity from prosecution if they transfer assets;

Referring to Point 1, the lawyer made the following statement:

“I know from experience of similar schemes/liquidations (e.g the Shepherd Cox chain of hotels) that the only ‘winners’ are the insolvency practitioners – at the expense of the individual investors”;

Well…… this lawyer knows that’s not strictly true.  The ‘winners’ in the Shepherd Cox case were, until very recently, the four main shareholders in the Shepherd Cox companies.  Those people were Nick Carlile, Lee Bramzell, Adam Stanborough and Daniel Bowden.

Nick Carlile has been made bankrupt so he no longer counts as a winner.  Lee Bramzell is facing a bankruptcy hearing in July and his hotel empire is crumbling (see this LINK to our article on Festival Hotels Group) so he may have been a winner for a while, but it’s not looking so good now.  That leaves Adam Stanborough and Daniel Bowden.

The Administrator of the six Shepherd Cox companies in which hotel rooms were sold has been pursuing those four shareholders for the repayment of what he alleges were “illegal dividends”.  We have clients who are creditors in the Shepherd Cox companies and they keep us updated on events.

It is alleged that up to £2m was paid out to these four shareholders as dividends.  Dividends can only be paid to shareholders out of profits.  None of the six Shepherd Cox companies ever made a legitimate trading profit, therefore the Administrator is demanding the money is repaid to the companies for the benefit of creditors, most of whom are hotel room investors.

The lawyer representing the Merydion sales agent and who made the statement above knows quite a lot about the Shepherd Cox scam.  He is defending one of the shareholders who is refusing to repay the dividend to the Administrator.  It’s a bit rich that this lawyer has the nerve to say the only ‘winners’ are the insolvency practitioners when he is defending one of the biggest winners and one of the architects of the Shepherd Cox scam.  If the four shareholders returned their alleged illegal dividends, investors would have recovered more money than the hotels are actually worth.

We would say that this lawyer’s client is currently ‘a winner’ because he is sitting on a pile of investors’ money and is refusing to return it. The client is Daniel Bowden and he has been involved in hotel room scams since 2014.  Mr Bowden wrote to us a while ago requesting that we remove his name from the website as he was nothing more than an innocent party (his words).  We did not reply and did not remove his name because we have emails sent by him to investors in which he describes himself as “Shepherd Cox – Sales Director”.  We don’t regard a Sales Director with a history of being involved in failed hotel room scams as an innocent party.  You can see the Shepherd Cox team of ‘winners’ on this LINK

Now we find that same law firm is once again involved in representing a client who is on the wrong side of an investment scam.  This time it is the Merydion Hotels scam.  We received a letter from this law firm in February 2021 threatening us with all manner of consequences if we continued to expose the Merydion hotels scam. It was really quite bizarre because the law firm was instructed by the sales agent and was not actually representing Merydion or Michael McMahon, yet it attempted to mount a robust defence of the Merydion scam.  Is it a coincidence that the law firm is once again involved in representing a party involved in a hotel room scam ?

Referring to Point 2, the lawyer states:

“By threatening Mr McMahon with the jeopardy of a statutory investigation into the whereabouts of investment money, but having the power to offer him immunity from that jeopardy, I would be surprised if he was not amenable to transferring the freeholds for a nominal/reasonable price”.

The key point here is “to offer him immunity”.  That’s what this letter was really about.  From this point on we have to be careful because we have information which is not in the public domain and which we cannot publish because it forms the basis of potential claims by an investor group against a third party.

As this lawyer knows from his experience of representing a Shepherd Cox man, quite often investors have a claim against third parties which can only be brought by an administrator and which only becomes apparent when a company is put into an insolvency process and the banking records can be examined.  An administrator’s claim in these kinds of scams can often exceed the value of the properties involved.  It is clear to us that both Michael McMahon and this lawyers’ client are very keen to avoid scrutiny of their financial dealings.

The administrator in the Shepherd Cox case is also the administrator of Merydion Corporation Ltd.  We would be surprised if the administrator didn’t have a keen interest in all Merydion assets and in preventing their dispersal.  It looks like the lawyer and the administrator are going to be on opposite sides once more. Maybe the lawyer will defend Michael McMahon ?  Maybe he’s defending him now by asking investors to consider offering him immunity from prosecution ?

We also believe it is likely HMRC has a very serious interest in this matter considering that Merydion Corporation Ltd was charged with money-laundering and tax evasion offences and did not mount a defence to those charges.  It is already clear to us from our investigations that some of these other Merydion companies have been engaged in similar activities, some of which include the hotel-owning companies.

The investor the sales agent is keen to push forward as ‘co-ordinator’ is involved with Alastair Dobbie in another case and tried to bring him into Merydion.  You can read our last article on  Alastair Dobbie here – LINK.  Once again, the same people popping up in different scams.  In the Alastair Dobbie cases we discovered that the people who claimed to be investors and who put themselves forward to lead the investor groups were actually sales agents who sold the scam to investors in the first place.

The Merydion hotels scam is an intriguing case.  We’ve never come across someone who NEVER shows his face to investors and always uses third parties to deliver messages.  This time it’s the master sales agent with their stage-managed letter.  Before this choreographed letter written for investors’ benefit was issued, it was Sam Doyle and Philip Heron-Carne who were the spokespeople for Michael McMahon. It’s never McMahon himself. Even the emails which say they are from McMahon do not come from him.  The sales agent and the lawyer have Michael McMahon’s mobile number. They could give it to the investors so that they can speak to him. They could also arrange a Zoom meeting so investors can see him. But no, they’re not prepared to do that. Whatever happens they must keep Michael McMahon at arms length from investors and all other creditors.  He might say something which points to what’s really been going on.

Here’s a simple solution.  The lawyer takes Michael McMahon as a client so that he is then authorised to deal directly with investors, or he takes on investors as clients so that they are covered by his insurance should the transactions be challenged and reversed in the future because that’s a very real possibility.  There’s also the question of the liabilities investors would be taking on as the owners of the hotels because contracts normally transfer to successors. The lawyer would then be held accountable for the advice he gives to investors on that matter too.

We believe there is a small group of very worried people who are ducking and diving trying to avoid an investigation into the Merydion companies and the money trail.  We’ve spoken to a few investors and they’re not buying it.  They’re not willing to grant immunity to McMahon or his accomplices because they want to know where the £6m has gone and whether any of it can be clawed back.

What’s next we wonder…….

To view our previous article on the Merydion Hotels Scam please click here – LINK.