Feb 15, 2016

Victims 'brainwashed' in £8m investment scam

Stuart Arnold
The Northern Echo
February 14, 2016

TWO men are beginning lengthy jail sentences for their part in an estimated £8million investment fraud likened to a religion and its brainwashed victims “believers”.

Lawrence Wheeler, who was jailed for nine years, was pictured with gems and precious metals he had bought from the fraud proceeds and was said to have gallivanted around the world living the high life in hotels.

His son and right-hand man James Wheeler - who received an eight year prison term - was accused by Judge Sean Morris of a “nauseating and slippery performance” when he took the witness stand during his three week trial, having denied fraud and money laundering.

He told investors that his status as a Jehovah’s Witness meant he was unable to break the law, in an effort to win their trust.

Teesside Crown Court heard how many of the 350 victims were elderly and had been deliberately targeted.

Some had since died with the stress of the County Durham-based fraud having contributed to their ill health, and others had lost homes and life savings.

A third man the Crown said was involved, Anthony Kemp, is currently serving a prison sentence in New Zealand for a separate but similar fraud, but is expected to be extradited back to the UK to stand trial when he is released.

The con began in 2001 when Wheeler Snr and Kemp were introduced to a network of people interested in so-called “get rich quick” schemes.

Victims were then recruited to what was effectively a pyramid or ‘Ponzi’ scheme and told they could get access to high yielding investments abroad.

When that ended pressure tactics and deception were used to get victims to make payments in anticipation of what prosecutor Mark Giuliani said were “ludicrous returns”. In 2006 it was claimed an interest fund from the investments amounted to £3.3bn.

Mr Giuliani said various excuses were also made to explain why no money was being paid with Lawrence Wheeler at one stage claiming couriers were bringing sixty million dollars from abroad in a suitcase which had been lost.

When people complained Wheeler Snr, who used fake banking documents and guarantees, sent threatening e-mails, saying he would “send in the heavies”.

They were also blackmailed into silence and repeatedly told that if they went to the authorities they would not get a penny.

Mr Giuliani said even after his arrest in 2013 Lawrence Wheeler carried on his fraudulent dealings, claiming to be looking at oil deals abroad and asking people to send money via PayPal.

Asked by Judge Morris where the cash had gone, Mr Giuliani said it was believed it had been siphoned off to West Africa.

Unlike his 71-year-old father, who admitted conspiracy to defraud on the eve of his trial, James Wheeler denied fraud and money laundering, but was found guilty by a jury on both counts.

He allowed his bank accounts to be used to launder the cash received. A picture framing shop, in Spennymoor managed by James Wheeler and his wife Gillian – who was cleared of the same charges – was used to co-ordinate the con.

Mr Giuliani read out several victim impact statements describing the “devastating” effects the fraud had.

He said: “Some of the victims had responsible jobs, company managing directors, solicitors, accountants, people who should have known better.”

Stephen Constantine, for Wheeler Snr, of Ramsay Street, Tursdale, County Durham, said he was a man of advancing years and hitherto good character.

Tom Mitchell, for 46-year-old James Wheeler, of Church Lane, Ferryhill, said: “It was as much a religion as a fraud. The believers – those were elderly and sophisticated investors.”

Mr Mitchell said his client’s culpability only went to back to 2007, adding: “This was not James Wheeler’s fraud. But for his father’s actions son would not be where he is now.”

Sentencing the defendants, Judge Morris said Wheeler Snr was the “villain of the piece” and a devious fraudster.

He said his procrastination in the face of overwhelming evidence led to other members of his family being arrested and also facing trial, before the cases against them were discontinued.

The judge said James Wheeler had been a willing and able partner in the fraud, funnelling funds abroad, and had also “chanced his arm with the jury and lost”.

He said: “You duped people you knew personally into schemes you must have known were nonsense.”

Judge Morris added: “Every single aggravating feature about fraud is apparent here. If there is a lesson to the public about get rich quick schemes, it is there is no way of getting rich quick other than winning the lottery.”


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