By Chris Lang
Five years ago, REDD-Monitor wrote about four men in the UK who received 14-year director bans. The bans followed their involvement in a £5.5 million land banking and carbon credit scam. A series of companies was involved, including Tullett Brown Limited, Tamar (London) Limited, Johnnystone Limited and Brad Baker Limited, Foxstone Carr Limited, and Carvier Limited.
The four men were Barinua Carr Nwikpo, John Ekpobari Nwikpo, Daniel Nwikpo, and Bradley Peter Ferry.
Last week REDD-Monitor received an email from the Law Office of Christie Gaumer in California:
Ladies and Gentlemen:
I have been retained to represent Mr. Bradley Ferry to address his concerns regarding the financial, personal and reputational damages caused by your article, entitled Directors of Tullett Brown, Foxtone Carr, Carvier Limited Get 14 Year Director Bans, dated June 25, 2015, located at the following link:
The article contains damaging information, and we are requesting that you remove the link. Namely, the article discusses the alleged participation by my client, Mr. Ferry, with three other individuals, brothers with the last name Nwikpo, in the sale of land, as plots, and the later sale of carbon credits. The article alleges the Nwikpo brothers profited at the expense of investors and used libel lawyers to stop complaints from being publicized. My client, however, did not direct those activities. Instead, the official findings you purport to recite as to the monetary profits did not find my client to have been directly involved. Instead, following inquires by the authorities associated with the Insolvency Service, in or about 2012, the business was shut down. The Insolvency Service prepared and published a report, which report is no longer public, and which I am informed stated that although “Mr. Ferry was appointed as the sole director of [the entity Tullet Brown] , he was nothing more than a salesman who acted on the instruction of the Nwikpo brothers”, the other men your article discusses as having profited. Further, Mr. Ferry was not involved at the start of the business. Instead he became involved only based on the brothers’ perceived need for the appearance of the business being directed by a local national, but, as the official report confirmed, all decisions were made by the brothers, not by my client. Indeed, the official findings made that point clear, stating that the planning and profiteering from the business was done by the brothers, only, and not by my client. Further, while the entity was shut down, there was no finding of fraud, nor was there criminal involvement, only the disqualification as to each of these persons from serving on any boards of directors. That finding, however, was not merited as to Mr. Ferry given the finding that he did not direct any of the acts of the business and only acted at the direction of the brothers.
While the article may have had an inadvertent effect, the article, and the way you are presenting this information to the public, including by labeling my client as a scammer or conman when there was no such finding, is causing tremendous damage to my client and his reputation. Mr. Ferry is suffering great emotional strain and financial loss as a result of your article. When potential business contacts Google search my client, your article appears near the top of the search results and is consistently causing its readers to pre-judge Mr. Ferry. These negative search results severely harm Mr. Ferry in this work and reputation, especially since he was ultimately found to have not directed the acts that resulted in the business’ failure and insolvency. Moreover, on a personal level, Mr. Ferry has young children, and he fears his children will be ostracized in their peer groups or even bullied if people are able to learn this information from searches.
In sum, the effect of the link is preventing Mr. Ferry from moving on personally or professionally, because it puts him at a significant disadvantage in his work and in his family life. If your link was removed, the information would still be available to potential business associates via the governmental files and records; however, it will be presented with a much less inflammatory effect that will allow Mr. Ferry to move forward in both his career and protect his personal and family life, including the lives and reputations of his young children.
Therefore, based on the above, we kindly request you remove the link referenced herein.
Thank you for your attention to this matter, and please feel free to contact me should you wish to discuss it further. We look forward to your prompt response.
Where to begin? The obvious response would be to refer Gaumer to the reply given in the case of Arkell v. Pressdram.
Here’s a screenshot of gaumerlaw.com’s website:
Fortunately, an archived version of the website gives us more information. Gaumer “has expertise in many business areas including real estate investment and development, oil and gas, nightclub and music event promotion, apparel, jewelry, manufacturing and retail.”
But Gaumer appears to have no previous experience of scam companies selling carbon credits to retail investors in the UK.
2015: The director ban
Gaumer seems to have had difficulty finding the Insolvency Service press release about Tullett Brown being ordered into liquidation in 2012. Instead, she quotes from a 2015 Insolvency Service press release that she seems somehow to have confused with the 2012 press release.
The 2015 Insolvency Service press release states:
Mr Ferry was appointed as the sole director of Tullett Brown but was nothing more than a salesman who acted on the instructions of the Nwikpo brothers.
Gaumer writes that Ferry “was not involved at the start of the business”. That’s just not true. Ferry’s name is on the registration document that Tullett Brown filed at Companies House on 6 May 2009:
Gaumer writes that “there was no finding of fraud”. Gaumer seems keen to give the impression that Ferry was only a salesman and therefore played no role in the scam.
I describe it as a scam, because that’s what it was. A £5.5 million scam.
Here’s how the Insolvency Service reported the director bans in its 2015 press release:
The press release states that,
All four men used pseudonyms as part of the scam, Barinua Nwikpo was known as Bari Carr; John Nwikpo as John Stone and Daniel Nwikpo as Daniel Fox and also Daniel Peters. Mr Ferry was known as Brad Baker.
Paul Titherington, a Senior Official Receiver in the Public Interest Unit of the Insolvency Service, described what happened as follows:
“The land being sold by the company was simply not suitable for investment purposes. Unfortunately the victims were persuaded to part with their money by sharp sales techniques used by the company and its brokers. As with many land bankers the scammers simply moved into selling carbon credits to the same victims. Unfortunately carbon credits, in particular VERs, are an even worse investment than the land. The only people that profited from this operation were the Nwikpos and their salesman.”
Note the repeated use of the words “scam” and “scammers” in the Insolvency Service’s 2015 press release.
2012: Tullett Brown ordered into liquidation
Had Gaumer searched a little longer, she would probably have found an archived copy of the Insolvency Service’s 2012 press release. It makes for interesting reading.
The Insolvency Service found that Tullett Brown’s salesmen sold land and carbon credits at “inflated prices” using “misleading statements and unrealistic claims about the potential high returns on investment”.
The most recent report by the liquidators of Tullett Brown (November 2019) states that, “The carbon credits do not appear to be of a commercially viable realisable value. As such, it is not anticipated that any realisations will made in this regard.” In other words, “The carbon credits are worthless”.
In June 2012, journalists John McGarrity and Susanna Twidale reported on Tullett Brown being wound up for the Thomson Reuters publication, Point Carbon. They spoke to two of Tullett Brown’s victims:
Anne Reid, 60, a former tax inspector from Wales, said she was duped into parting with 12,088 pounds for 1,725 voluntary carbon credits by a Tullett Brown salesman who promised they were regulated by the U.N.
Although she cannot be sure, she believes the company got her information from a telesales firm carrying out a consumer survey who asked her if she would be interested in green investments.
The calls began in August and the salesman telephoned every week for six weeks.
“He said we could get returns of up to 25 percent in 15 months,” she said, adding that large corporations were touted as potential buyers of the credits in the future.
“He gave the impression he was looking at a whiteboard and wiping the projects off the list as they got sold and we had to be quick or we could miss out,” she said.
“Everything came in a fabulous folder and we even got a personal Christmas card,” Anne said, adding that he had invited her and her husband for lunch in London later in the year.
When the calls stopped and the emails bounced back, Anne became concerned that the investment might not be what it seemed.
Paul Bolton, of Hampshire, said he paid 2,000 pounds for 300 credits from an Indian hydro project marketed by Tullett Brown.
He said he was also promised generous returns, but when he wanted to sell the credits was told by another salesman that his initial investment was too small and that he would have to purchase a larger amount to secure a buyer.
He turned down the offer.
The Insolvency Service’s 2012 press release includes the judgment from Christine Derrett, the Court Registrar who wound up Tullett Brown. It’s worth quoting at length. (Mr Peacock is Joe Peacock, Secretary of State’s investigator, and Brad Baker Limited, mentioned towards the end of this was Ferry’s company.)
Tullett Brown is the trading company which carried on the business of which the Secretary of State complains, being firstly the sale of plots of land at seven sites in England and latterly the sale of carbon credits to the public.
The evidence demonstrates that in both cases misleading selling techniques were used. I am satisfied that customers were misled as to the likely return on their investments and the period over which that return might be realised and led generally to believe they were buying an asset that was appropriate for investment.
They were sold the asset for considerably more than Tullett Brown had paid for it and a substantial increase in value would therefore be needed for the investor to break even. The evidence demonstrates clearly that it is unlikely that such an increase in value would occur.
The remaining companies are connected companies, in that the sole shareholders of those companies are also shareholders in Tullett Brown and they also share officers with Tullett Brown.
Substantial sums were paid to these companies by Tullett Brown, the reason for which is unknown. Petitions have been presented for their winding up on the basis that they are closely associated with Tullett Brown and have benefitted from the proceeds of Tullett Brown’s misleading sales practices and their directors failed to answer enquiries as to those payments. The grounds for their winding up are the lack of commercial probity.
The investigation by Mr Peacock centred on Tullett Brown’s land banking activity and clearly demonstrates that Tullett Brown marketed land at seven sites. Five of these it had purchased for modest amounts in 2009/2010. It also sold plots of land at two further sites as agent for a third party and a portion of the sale proceeds were paid to that third party. Between June 2009 and May 2011 Tullett Brown appears to have generated sales of £1,609,200. The evidence shows that the land was sold at inflated prices. The sites owned by Tullett Brown were sold for at least 7.2 times more than Tullett Brown had paid for them in 2009/2010. The most an individual paid for their plot was 37.7 times more than Tullett Brown had paid for it.
The method by which trading was carried on was that potential investors were ‘cold called’ from lists obtained from marketing agents. They were told that they could expect to wait for a return for ‘3-5 years-mid to long term’. They were led to believe that significant increases in value would occur.
I am satisfied that misleading statements were made in the brochures to induce investment and that there was no real prospect of any returns.
The second limb of the lack of commercial probity ground relates to the sale of carbon offset credits. I understand that this area of activity was drawn to Mr Peacock’s attention by the FSA in February 2012. I find it surprising, but the evidence demonstrates a level of income generated of £1.6 million from selling carbon credits to 128 consumers.
Mr Peacock contacted two investors and it appears that similar mis-selling techniques have been employed to those employed in the sale of land. The first investor contacted had purchased land from Tullett Brown and had been approached again and invited to buy carbon credits. He made a modest investment of about £2,000. He was told that ‘the sky was the limit’ when discussing returns with the salesman and was told that he was ‘virtually guaranteed’ that the investment would increase in value between 50 and 100% in one year. The investment was compared to gold but the investor has not been able to access his carbon credits on line as promised by Tullett Brown’s salesman.
The second investor invested £138,121.50 in carbon credits, again having been cold called. She was told that the projects were UN-backed, implying that they were certified emission reduction credits. In fact, the credits purchased are not UN-backed. Two of the projects in which she invested have since been approved by the UN, but this does not alter the status of the investor’s credits, which were created before that approval.
The evidence demonstrates that Tullett Brown sold the credits at inflated prices. It is apparent from the evidence this was a wasting asset which was not made clear to the investor. Also that it is difficult for individual investors to sell credits.
It appears that, once again, Tullett Brown employed a strategy of selling these items at a significantly inflated price, having sold the credits for approximately 3.6 times the amount Tullett Brown had itself paid. It thus appears that Tullett Brown has continued the misleading sales practices which it had employed in respect of its land banking business in order to sell carbon credits.
Turning to the lack of transparency and diversion of company funds allegation, Tullett Brown’s records were inadequate to explain the purpose of the transfers to the associated companies. These companies had no trading activity but are the beneficiaries of significant sums of money. Tamar received £241,894, Johnnystone received £398,791 and Brad Baker £71,532.
In the absence of any explanation being given for the payments and no obvious reason for the payments being made, I am satisfied that the grounds for winding up the connected companies, which are essentially the same for each of the connected companies, namely there has been a lack of commercial probity in benefitting from the mis-selling carried on by Tullett Brown and failure to co-operate with the investigation, are made out. On the uncontested evidence before me it is in my judgment entirely appropriate to wind up the companies on the public interest grounds sought and I do so order.