Qualia Care Update March 2022.
We have been receiving reports that the self-appointed ‘Investor Co-Ordinators’ in the Qualia Care scam have had their plans to enrich themselves scuppered by the FCA. Unfortunately they’ve already been enriched by charging a lot of investors £1,000 each.
The Investor Co-Odinator group consists largely of the people who sold the investment and a solicitor who assisted at least one of the sales agents who is involved in several scams. The Investor Co-Ordinator concept was devised to allow this small group to earn money from a recovery room scam. It was dressed up to make it appear that there was an attempt to acquire the 13 Qualia Care properties for all investors, but this was never realistic. We have written several articles about this group, one of which CAN BE VIEWED ON THIS LINK.
We won’t go back over all the details because our articles cover that, but in summary this is the recovery room proposal that the Co-Ordinators and Alastair Dobbie of Shortlands Law put to investors:
Qualia Care Update March 2022 – The Recovery Room Proposal
1. Pay £1,000 into the pot to be represented by Alastair Dobbie. There was an elaborate structure put in place to try to circumvent the SRA Code Of Conduct and deny investors the SRA protection of being a direct client of Shortlands Law (covered in an earlier article).
2. In return for payment, it was claimed the collective group of investors would be able to buy the freeholds of all 13 properties for £1 each. This was a ridiculous proposal which had zero chance of success, but it was proposed and strongly supported by Alastair Dobbie, a lawyer and self-confessed dreamer, so investors were fooled into believing it was possible. It now appears that Alastair Dobbie’s skill set is rather heavily skewed towards the dreamer side and rather less on the lawyer side.
3. The freeholds would be placed into a new company in which investors would be shareholders. The co-ordinators would be paid for running the company and would receive 20% of the shares.
To ensure that the co-ordinators could control everything they loaded the Qualia Care Creditors Committee with their own people, depriving independent investors from having any say, and they entered into an agreement with Robin Forster, the founder of the scam and the man responsible for taking an estimated £50m from investors. This prevented any other party from buying the freeholds, including other room owners, unless they joined this Investor Co-Ordinator group.
We were contacted by groups of investors who wanted to buy the freehold of the property in which they owned rooms, but they could not do so because the Investor Co-ordinators were preventing them. We have a copy of an email from Nico Bruyniks to an investor in which he attempts to dissuade an investor group from buying the freehold of their care home because he tells them they can get it for £1 if they side with the Investor Co-Ordinator group.
Qualia Care Update March 2022. – The Current Position
1. The FCA has, not unsurprisingly, not agreed to the Investor Co-Ordinator proposal. It was a money-making scheme for a few individuals which was neither acceptable nor achievable [our view];
2. The FCA has announced it is prosecuting several parties involved in the Qualia Care scam including Robin Forster. The hearing is scheduled for April 2023. HERE IS A LINK TO THE FCA ANNOUNCEMENT;
3. The agreement with Robin Forster is dead. Investors at individual properties have now bought, and are in the process of buying, the freeholds of some of their properties. None of them have been acquired. or are being acquired, for £1. The purchases need to be approved by the FCA and we are aware of one that is currently under consideration;
4. The Investor Co-Ordinators are asking their investor victims to stump up more money. It’s not clear what they need the money for. Perhaps it’s to pay the legal costs of defending themselves against claims for refunds.
We were heavily critical of the Investor Co-Ordinators’ proposal when it came out. It had no chance of ever being accepted and a decent solicitor would have known that. Several solicitors told us it was seriously flawed and would be thrown out. Their reasons were:
1. The FCA had intervened in Qualia Care alleging that the investment was an unregulated collective investment scheme (“UCIS”). Participating in a UCIS is both a civil and a criminal offence. The FCA had not declared which of those it would be applying, if any. Investors should have been informed right at the start, before they paid any money, that it was possible Robin Forster and some Investor Co-Ordinator members could face charges in which case the proposal would fail.
2. An administrator would never agree to sell 13 freeholds at £1 each. They had been independently valued at £2m. Any lawyer with even a small amount of insolvency knowledge would have known that this would never be acceptable. That is why we believe investors were intentionally misled in order to enrich the Investor Co-Ordinator group and its associates.
3. The FCA was unlikely to agree to allow sales agents to profit from this scam a second time. Sales agents are captured under the UCIS regulations and could yet be prosecuted at some time in the future. It would be entirely wrong for those who received sales commissions (which have not been repaid to investors) to profit again in this proposal and the FCA would be roundly criticised if they had agreed to it. In fact, one of the defendants in the FCA case is a sales agent company called Fortem Global Ltd. Depending on the outcome of the trial, investors may be able to unite to carry out their own independent prosecutions of their sales agents. They include several Investor Co-Ordinator members, Elite Investor Club, Lion Trust Property, One Touch Investment and Properties Of The World, to name but a few.
4. The proposal relied on Robin Forster covering significant costs which would be incurred. This was only possible because he had transferred £1.8m out of the companies in administration to a company he controlled which was not in administration. Investors should have been told by their legal adviser, Alastair Dobbie, that there was a strong likelihood the FCA would challenge that transfer which would kill off the proposal. Sure enough, that is exactly what has happened.
So now the Qualia Care victims are being asked by the Investor Co-Ordinators to sink more money into the scam. Instead of paying money to the co-ordinators, investors should consider uniting to obtain legal advice on whether they have claims against the Investor Co-Ordinators, Alastair Dobbie and Shortlands Law to refund their payments. These people should have enough assets and insurance to refund investors in full.
A lot of investors were directed by the co-ordinators to use one law firm for their UCIS claims. They should be checking with that law firm to ask whether any party involved with the Investor Co-Ordinator group, including its legal adviser, is receiving any payment for having provided, or continuing to provide, services or introductions related to the claims.
Qualia Care is not the only scam that some of this group are involved in. They have been making similar statements about acquiring freeholds for £1 in other cases. We have been contacted by one Qualia Care investor who advised us he was approached to be part of a very small group (most of which were Investor Co-Ordinators) which would buy the freeholds of properties which Investor Co-Ordinator members had originally sold to investors. We’ll bet the hundreds of other investors don’t know about that. It’s worth keeping an eye on who ends up buying the freeholds to see whether they have any link to the Investor Co-Ordinators.