On 23 May 2019, the US Attorney’s Office for the Southern District of New York put out a press release about the case against Renwick Haddow and others involved in the Bar Works scam. The press release includes the following statement:
U.S. Attorney Berman announced the unsealing of a guilty plea, on May 8, 2019, by RENWICK HADDOW, a/k/a “Jonathan Black,” in which he admitted to his own involvement in the fraudulent scheme related to Bar Works, as well as to making material misrepresentations and misappropriating investment funds in another company created by HADDOW called Bitcoin Store Inc. (“Bitcoin Store”).
REDD-Monitor first wrote about Bar Works and Renwick Haddow’s involvement in January 2017. Bar Works sold bogus investments in co-working office spaces in converted restaurants and bars, in New York, San Francisco, and Istanbul.
Bar Works raised more than US$36 million from investors between September 2015 and June 2017.
Haddow attempted to hide his involvement in Bar Works by using the name ‘Jonathan Black’. But Haddow signed various licences and leases under his own name, including a form filed with the Secretary of State for California in March 2017.
A blizzard of lies
The US Attorney’s Office press release explains that Haddow pled guilty to “one count each of wire fraud and wire fraud conspiracy relating to the Bar Works scheme”, and “one count each of wire fraud and wire fraud conspiracy relating to the Bitcoin Store scheme”. Each charge carries a maximum sentence of 20 years in prison.
On 23 May 2019, a British man called Savraj Gata-Aura was arrested in New York and charged with wire fraud and conspiracy to commit wire fraud “for engaging in a scheme to defraud victims by making material misrepresentations about the management and operations of a company called Bar Works Inc. and related entities (‘Bar Works’).”
US Attorney Geoffrey S. Berman is quoted in the press release as saying that,
Renwick Haddow, a U.K. citizen, had a long track record of financial misconduct in the U.K., so much so that British regulatory authorities imposed an eight-year ban barring Haddow from serving as director of any financial institution. Haddow then turned his sights toward the U.S., using the alias ‘Jonathan Black’ and fraudulently soliciting investments in Bar Works. Haddow and co-defendant Savraj Gata-Aura allegedly solicited funds from investors with fictitious claims about Bar Works’ management and performance. They are now being held to account for the blizzard of lies they told to get money from their unsuspecting victims.
Sam Aura and Renwick Haddow
“I’m not the actual person behind Bar Works. I’m one of the people sort of pushing it and driving it forward… Bar Works is actually built by a couple of silent directors.”
The complaint against Gata-Aura mentions the interview, and notes that,
In discussing Bar Works, Aura made several false and misleading
statements. For example, Aura falsely stated on the radio program that Bar Works was “very, very profitable as an entity” and that each location that Bar Works opened was “profitable very, very quickly.” Aura knew that the 39th Street Location, Bar Works’ first location, was not profitable, based in part on the lack of customers at this location while he worked there.
The complaint against Gata-Aura alleges that,
From approximately September 2015 through June 2017 (the “Relevant Period”), Defendants Aura and Core Agents, a company Aura owned and controlled, recruited a network of sales agents to sell fraudulent investments to investors and served as the sales agents’ liaison to the entities offering the fraudulent investments.
Core Agents was registered in the UK in June 2010. According to the complaint Aura and Core Agents raised more than US$10 million either directly or through sales agents he recruited from at least 100 investors.
The complaint alleges that,
These investments are now effectively worthless due to the fraudulent scheme, including Haddow’s misappropriation of investor funds for his own personal use.
Defendants, in return for their role in selling the fraudulent investments, received commissions that totaled at least $2.9 million from the entities offering the investments.
The complaint outlines in detail how Aura worked with Haddow. The complaint alleges that,
Aura advised Haddow about how to structure the Bar Works Leases based on Aura’s past experience working as a sales agent for a company called Park First, which operated in the U.K. and offered investments in airport car parking spaces with a “guaranteed” rate of return.
As Tony Hetherington points out in a recent piece on This is Money about Park First,
The only snag was that the scheme was illegal. In effect, this was like a unit trust. That meant the company and its bosses should have been vetted and authorised by the Financial Conduct Authority, but instead they were breaking the law and it took the watchdog three or four years to spot this.
More than 6,500 people handed over money to Park First, hoping for a guaranteed return.
The complaint against Aura gives some fascinating glimpses into the way that Haddow and Aura allegedly worked. For example, the following exchange:
On May 27, 2016, Haddow, through the Jonathan Black Email Account, forwarded Aura an exchange between a broker selling Bar Works investments in Malaysia and an outside attorney working for Bar Works. In the email exchange, a broker specifically asked the attorney “[w]hat are the legal implications should [Bar Works] fail or be a scam?” and “[w]hy are payments paid direct to Bar Works instead of through appointed lawyers?” The attorney then forwarded the questions to Haddow at the Jonathan Black Email Account. Haddow in turn forwarded the email exchange to Aura, and wrote: “[c]heck this guy out. This guy is a bloody idiot: you don’t ask a lawyer do you think the product will work out.”