in UK, United Arab Emirates, USA

A story of carbon credits, diamonds, and fraud. Featuring London Carbon Market, Carlton Chase, SDKA International, Gurpreet Singh Rai, and the return of Luke Ryan

Gurpreet Singh Rai, or Gurps to his friends, describes himself as someone who was a “prominent figure of the Carbon Market”. He claims to have created history in 2011, when he became “the first person to successfully facilitate a commodity trade using a virtual currency”.

In 2011, Rai’s company, London Carbon Market, was involved in an international offset deal involving Nike, Winrock International, and the American Carbon Registry. REDD-Monitor wrote about that project in May 2015:

In 2006, Nike replaced the gas it used in the air soles of its shoes. Previously it had used sulphur hexafluoride (SF6), a gas with a global warming potential of 22,200 times that of carbon dioxide. Swapping SF6 with nitrogen allowed Nike to create almost 8 million carbon credits, which were registered on Winrock International’s American Carbon Registry.

To encourage more people to buy the carbon credits, Nike announced that it would donate all the money from the sale of its SF6 carbon credits to forestry projects in Brazil. The money would go to Mata no Peito, an initiative “to support local organizations and communities to protect and replant forests throughout Brazil”.

Here’s a screenshot of Mata no Peito’s website:

At the bottom of the website is the announcement that London Carbon Market was Mata no Peito’s first partner. In a press release dated 28 April 2011, on the American Carbon Registry’s website, Dr. Constantine Pagonis of London Carbon Market said,

“London Carbon Market is proud to donate to the Mata no Peito Brazil forest fund by retiring credits registered by Nike on Winrock’s ACR. As Nike’s first partner in this initiative, we look forward to further involvement with Nike and other partners committed to making sustainable projects a success. Partnering with Hub Culture for the transaction using the Ven currency makes history as the first carbon trade to be priced in the Ven digital currency, a statement of leadership we are proud to be a part of.”

Pagonis was a director of London Carbon Market, and the company was registered in the UK on 4 April 2011.

Pagonis resigned as director on 11 September 2011, to be replaced by Gurpreet Singh Rai. The company was dissolved on 8 April 2014.

Hub Culture and Ven currency

The Mata no Peito website states that the carbon credits were “purchased via Hub Culture”. Hub Culture is a social network company, created by Stan Stalnaker, after a book he wrote in 2002 called “Hub Culture: The Next Wave of Urban Consumers”. In 2007, the company created a virtual currency called Ven. By 2018, Hub Culture had 60,000 members.

Gurpreet Rai is a partner in Hub Culture.

Here’s Stalnaker not really explaining what Hub Culture is – “a global community of people who are both like minded and action oriented”:

According to Stalnaker, Hub Culture’s ambition is to create the world’s first “virtual state” and Stalnaker hopes to “re-write the future of finance with Ven as a digital currency”.

There are several Hub Culture companies:

  • Stalnaker registered a company called Hub Culture Services Limited in the UK in November 2006.
  • Hub Culture Pavilions UK Limited was registered in the UK in September 2008.
  • Hub Culture Ltd was registered in the tax haven of Bermuda in April 2006.
  • Hub Culture Pavilions Limited was registered in Bermuda in July 2008.
  • Hub Culture, LLC was registered in New York in November 2004.

Ven currency has been used to buy 780,000 carbon offsets from Nike’s Mata no Peito project, and 30,000 carbon offsets from Wildlife Works’ Kasigau Corridor REDD project in Kenya

In June 2018, Hub Culture launched a carbon token called Ultra Carbon. In an interview with CleanTechnica, Stalnaker describes how the carbon token could work:

If you are BP, you are both a producer and consumer of carbon credits, and the market has points where these things are traded, but they are not highly liquid or exchangeable. With Ultra Carbon, BP could make carbon offsets for its fuel available to all of its customers, and the customers could then hold the value of the carbon offset purchased in the form of Ultra Carbon directly, to use, sell or trade at a later date should they wish. Ultra Carbon makes carbon available to everyone.

In response to a question about how likely this system is to prevent fraud, Stalnaker replies,

One of the key aspects of Ultra Carbon is the 10-year relationships we have in the carbon space — working with Winrock to identify high quality projects generating carbon credits, and with blockchain providers like Poseidon, who are issuing carbon on the blockchain. Additionally, Hub Culture is identifying land projects and forests to invest in, so that acreage can be put under protection as part of land reserves. Together, the carbon ingredients to Ultra Carbon can be verified, insured and monitored.

In November 2018, REDD-Monitor wrote about the Poseidon Foundation’s involvement in a blockchain project to sell carbon credits from the Cordillera Azul National Park REDD project in Peru to buyers of Ben & Jerry’s ice cream in London:

Carlton Chase

Gurpreet Singh Rai was also involved with a company called Carlton Chase Limited. The company was registered in the UK in August 2011 and Rai was director of the company for a few weeks in March 2013.

Carlton Chase cold called members of the public in the UK to persuade them to buy carbon credits as investments. The company also sold fine wine as an investment – another typical boiler room scam.

Here’s a screenshot of the company’s website:

An archived copy of the website dated November 2011 shows a link to London Carbon Market, and a mention of the Kasigau Corridor REDD project.

Carlton Chase was dissolved in February 2016.

Carlton Chase has appeared a couple of times in comments on REDD-Monitor. This comment in April 2017 from “Margaret” is typical:

I purchased 60k worth of gold standard carbon vers from Carlton Chase Ltd they have gone into ceased trading can anyone help tracking them down? can anyone help or are they just completely worthless

COP 17, Durban

Gurpreet Singh Rai took part in the climate negotiations in Durban in December 2011. Here’s how he described that experience in a 2016 interview:

Erm, so, so bascically COP 17, er, it’s basically, er, it’s like a, er, it’s like a, it’s like when all the countries get together, er, it’s like a, it’s like a, a summit, like a climate summit.

And er, I got invited there by the UN, er, it, it, it, it’s, it’s all about, you know, how, er, you know, geopolitics basically can affect the environment and how we can make, you know, countries lower their emissions and exert yourself with that.

You know, I’m a big believer in like, you know, basically taking care of mother nature and earth, and, er, it was, er, it was a good opportunity for me to get my consensus to people that can really make a difference. Like, you know, the CEO of Coca Cola, Nike, everybody is there, Obama, you know, presidents of all the countries converge onto, into, into the COP, so to speak, and, you know, everybody gets to talk, say their piece, um.

The event that I did was with Richard Branson’s company, erm, which is called, Carbon War Room, which is his, kind of, er, environmental, philanthropic company that he set up, and, erm, you know, it’s, er, it’s a, it’s a great place to network as well for, you know, it’s a fantastic place to kinda be able to tell Fortune 500 companies how they could, you know, be more environmentally friendly and conscious.

SDKA International

A 2015 press release from SDKA International states that the company was “founded in 2011 as a registered entity in the United Arab Emirates”. A search on Open Corporates for “SDKA” does not return any companies registered in the United Arab Emirates.

Gurpreet Singh Rai is chairman of SDKA International.

The company’s website was registered in January 2013. The website currently displays the following message:

It’s been like that since January 2017.

SDKA International describes itself as, “a global resources firm dedicated to financing, production, refining, processing, transportation, storage and supply of a broad range of commodities”.

In 2014, SDKA North America LLC was registered in Delaware. The company describes itself on its website as a “Manhattan based merchant bank”. Christopher Kelly is the managing partner of SDKA North America, and the CEO of SDKA International.

In 2016, SDKA International teamed up with a company called Bicion to produce the most expensive training shoe in the world, valued at US$4 million:

The diamond-covered shoe was created to raise funds for Soles4Souls, a charity that collects and distributes shoes and clothing. At the time, Gurpreet Rai was married to Sandra Denton, better known as the Pepa part of Salt-N-Pepa. That’s her in the publicity photo above at the launch of the shoe, with Rai, and her daughter Egypt Criss.

EVRM Limited v. SDKA North America, LLC

On 27 February 2019, a company called EVRM Limited filed a legal complaint at the Southern District of New York court against SDKA North America, LLC, Christopher Kelly and Gurpreet Rai.

In 2014, according to the complaint, EVRM entered into an agreement with SDKA International to buy and sell 622 carats of melee diamonds. (Melee diamonds are very small diamonds, used as accent diamonds around a larger diamond in jewellery – the value of the melee depends on the quality of the diamonds.)

SDKA appointed another United Arab Emirates company called Simple Administration Services Limited to administer the trades for EVRM. SDKA International was the custodian of the diamonds.

Simple Administration Services was supposed to sell EVRM’s melee at an auction in April 2018. The complaint states that EVRM “was unable to make contact with SAS [Simple Administration Services]”.

EVRM subsequently found out that SDKA International’s license to trade in Dubai had expired in September 2017. SDKA International, as custodian of the diamonds, could not legally take part in the auction in April 2018.

EVRM did not receive either the money from the auction or the remaining melee. The company is now suing SDKA North America, Kelly, and Rai for US$650,000 plus punitive damages of US$5 million.

Here’s a screenshot of EVRM’s website:

Clicking on the small blue triangle at the top right of the website reveals a “Risk Disclaimer”, that explains that EVRM is fully aware that the investments it is offering are very likely to be toxic:

The market in uncut diamonds may be illiquid and you may have difficulty selling your diamonds at the price you wish to achieve. There is no guarantee that you will be able to sell your uncut diamonds. The purchase of uncut diamonds should be regarded as high risk and speculative in nature and it can be difficult to assess their market value. You may lose the whole amount paid for your uncut diamonds.

The “Risk Disclaimer” also explains that, “The diamonds that you purchase will be held and stored in Dubai.”

And it adds that the investment is not regulated by the Financial Conduct Authority:

Simple Administration Services Limited is not authorised or regulated by the Financial Conduct Authority (the “FCA”). The services that we provide under this document and the Transactions that we undertake on your behalf are not governed by the FCA’s rules and you will not benefit from protections which may be available under the FCA’s rules. You will not be covered by the Financial Services Compensation Scheme or the Financial Ombudsman Service.

EVRM was registered in the UK in May 2013. For two years, from May 2013, the director of EVRM was Luke Ryan.

Ryan first appeared on REDD-Monitor in November 2012:

Ryan has appeared several times on REDD-Monitor since then.

From February 2011, Luke Ryan was the director of a company called Enviro Associates, a company that cold called retail investors to persuade them to buy carbon credits as an investment. Between October 2011 and February 2013, the company sold 301,066 carbon credits to retail investors for a total of £1,451,140.

In January 2014, Paul Murphy, writing on the Financial Times blog FTAlphaville described the emails coming out of Enviro Associates as “scumbag correspondence”.

Having conned people into paying far too much for carbon credits that are not suitable as investments, Enviro Associates sent out emails asking its victims for more money, in return for undefined “services”.

Enviro Associates was one of the companies on Carbon Neutral Investments’ “List of Clearing Members”, along with Advanced Global Trading, MH Carbon, Eventus Alternatives, and Worldwide Commodity Partners Limited.

In February 2016, Carbon Neutral Investments was ordered into liquidation, in the High Court in London. Enviro Associates was ordered into liquidation at the same time.

Leave a Reply

  1. Where are Action Fraud and the FCA? Are they too busy ticking boxes to investigate and prosecute actions that are tantamount to theft?

  2. @Pam Jones – Good question. But as the Risk Disclaimer on EVRM’s website points out, none of these companies are regulated by the FCA. Incidentally, the Risk Disclaimer on EVRM’s website is cut and pasted from Simple Administration Services’ website.

    In 2010, the Financial Services Authority (as it was then called) banned three directors at a company called Simply Trading Group. One of the directors was Luke Ryan. FSA said that Ryan posed “a serious risk to consumers” if he were to act as a senior manager in an authorised firm.

    That was seven months before Ryan became director of Enviro Associates.

    The most recent report (22 February 2019) from the liquidators of Enviro Associates states that the liquidators are “aware that an investigation was carried out by the Police in respect of the Company’s involvement in alleged carbon credit investment fraud.”

  3. This is ridiculous, so you are in fact stating that EVRM did nothing wrong, but rather relied on a third party that let the down?

    Of course the risks have to be outlined in terms and conditions, as they are with all mainstream spread betting or literally even regulated stocks and shares outfits. They all literally say, investing full stop can result in the loss of some or all of your cash. Stating the worst case scenarios doesn’t mean they have done anything wrong at all.

    It is just most unfortunate in this case that a supplier is the issue, but attempting to pursue them legally is surely the right thing to do.

    You wouldn’t find a reasonable court of law that would held someone accountable for stating the worst case scenario or for a third party being in the wrong.

    It would be like you telling someone that if they walk down a dark alleyway to get home faster late at night, that they may get home quicker, but in a worst case scenario they could be a victim of unforeseen wrongdoing… and then that person you have given that information to being held accountable because someone else committed a crime.

    You have some good points raised on occasion, but this is not one of them. This rather just appears to be searching for an attack for no reason.