Last year, REDD-Monitor wrote a series of posts about Renwick Haddow’s latest scam, Bar Works. The most recent post was in July 2017, after the Securities and Exchange Commission filed a legal complaint against Haddow. The complaint alleged that Haddow fraudulently raised almost US$38 million from investors.
Haddow faces up to 40 years in prison if convicted.
Towards the end of July 2017, AFP reported that Haddow had been arrested in Morocco:
Police said only that a 49-year-old Briton had been detained in the northern city of Tangiers on Wednesday in response to a notice issued by Interpol on July 17…
A source “close to the investigation” told AFP that the man arrested was Haddow. He appeared before the public prosecutor in Tangiers and was transferred to Salé prison near the capital Rabat. Haddow had apparently arrived in Morocco a month earlier, from the United Kingdom.
In December 2017, the website FinanceFeeds reported that the US government is in the process of extraditing Haddow. According to FinanceFeeds,
the SEC understands that the United States government is in the process of extraditing Haddow and that the United States Attorney’s Office for the Southern District of New York recently learned that Haddow has consented to extradition.
There are at least five private legal cases against Haddow, his accomplices, Bar Works, and related companies, in addition to the SEC and FBI cases.
Maria Nikolova, a journalist with FinanceFeeds, has written a series of articles about Haddow and some of the legal cases relating to his scams.
Chinese investors suing JPMorgan Chase
In November 2017, 27 Chinese investors who lost money to Bar Works took out a case against JPMorgan Chase Bank. Bar Works investors paid into a JPMorgan bank account. According to the complaint, they believed that the bank account was a sign that Bar Works was a legitimate business.
The Chinese investors are suing JPMorgan for failing to spot the suspicious transactions from Bar Works’ account, including transfers to 27 countries that the US Department of States lists as major money laundering countries. For example, about US$6.3 million was transferred to Morocco, the Isle of Man and Mauritius, which are all money laundering centres.
Nikolova writes that,
The plaintiffs assert seven causes of action against JPMorgan: (i) knowing participation in a breach of trust; (ii) aiding and abetting embezzlement; (iii) aiding and abetting fiduciary breach; (iv) aiding and abetting conversion; (v) unjust enrichment; (vi) commercial bad faith; and (vii) gross negligence.
In January 2018, the defrauded investors requested that JPMorgan provides all documents and electronic data related to Bar Works, including details of anyone who opened a Bar Works account with JPMorgan.
JPMorgan objected to the investors’ data request. The investors claim a total of $3,050,000 in damages.
New York Court orders Haddow and Bar Works to pay US$7.3 million
In December 2017, Judge Lorna G. Schofield issued her final default judgement against Bar Works and other defendants. She ordered Haddow and Bar Works to pay a total of US$7.3 million.
Nikolova reports that, “The Court found that the defendants had violated the Securities Act of 1933 and the Securities Exchange Act of 1934.” Bar Works breached the contracts they had with investors. Haddow and his wife Zoia Kyselova are held personally liable for the obligations of the Bar Works companies.
SEC wins default judgement against Bar Works
Also in December 2017, in the California Northern District Court, the SEC secured a default judgement against Bar Works. Nikolova reports that, “Judge Edward Chen ordered that a constructive trust is imposed on Bar Works Capital’s property in San Francisco (615 Sacramento Street) in the amount of $1.61 million.”
The SEC had already obtained a final judgement against Bar Works Capital in another case. Under the judgement, Bar Works Capital was liable for US$1.61 million. But the company failed to pay the penalty.