By Chris Lang
On 10 April 2016, in his trial at Southwark Crown Court, James Francis Byrne was convicted of two counts of conspiracy to defraud. On 29 July 2016, he was back in Southwark Crown Court, where he pleaded guilty to another count of conspiracy to defraud. On 1 August 2016, He was sentenced to 11 years in jail.
In December 2020, Byrne was one of seven men who appealed their convictions at the Court of Appeal. They did so following the collapse of a carbon fraud trial in May 2019, after the judge described the prosecution’s expert witness, Andrew Ager, as “not an expert of suitable caliber”. Ager had been an expert witness at their trials.
The judgement from the December 2020 Court of Appeal case ruled that although Ager’s behaviour as an expert witness was “egregious”, the substance of Ager’s evidence on key issues was not challenged. In addition to Ager’s evidence, “there was abundant other evidence that all of these schemes were fraudulent”.
The judgement describes in detail Byrne’s role in the London Carbon Credit Company and Henderson International Associates scam.
London Carbon Credit Company Limited
Between August 2011 and August 2012, Byrne was involved in selling carbon credits to retail investors via a company called London Carbon Credit Company Limited.
Andrew Penman, an investigative journalist at the Daily Mirror exposed the scam in August 2012. Penman reported that Bob Wright handed over £7,900 to London Carbon Credit Company for carbon credits. Penman showed the carbon credits to Robin Keyte, an expert independent financial advisor. Keyte told Penman,
“I cannot find any information as to the current tradeable value of your reader’s carbon credits and am concerned that they may be impossible to trade and have little or no value.”
The director of London Carbon Credit Company was Young Erumuse. Penman confronted him with some questions in 2012. Erumuse didn’t answer the questions.
Erumuse was also director of London Carbon Company Ltd, Carbon Acquisitions Limited, Bluesky Global Trading Ltd (he spelled his surname “Ereumuse” for this one), Honeycross Estates Agents Ltd, and Hypermedia Marketing Ltd.
A 2019 progress report by Grant Thornton, the liquidator of London Carbon Credit Company, mentions two related companies: Tri Star Solutions (London) Limited, and SH Marketing Limited. The director of both companies was Samuel Henriot, who was also the director of Henderson International Associates.
Four people who had worked as “openers” at London Carbon Credit Company gave evidence. The judgement sums up their evidence as follows:
Their task was to send out the brochures and to sell carbon credits. They were told to use a different name when speaking with potential clients and they were provided with a script. They said that Byrne was the “boss” of the company and he gave motivational talks to the employees.
London Carbon Credit Company’s bank accounts showed that although the company took a total of more than £1.6 million from investors, only £76,038.88 was actually spent on buying carbon credits.
On 2 November 2011, one investor paid £95,862 to London Carbon Credit Company. On 3 November 2011, instead of being invested, the money was transferred to Byrne.
Henderson International Associates
In June 2012, a second company, Henderson International Associates Limited, was registered at Companies House. From August 2012, Henderson International Associates invested money held in Self Invested Personal Pension Schemes in carbon credits. The scammers failed to mention that Henderson International Associates would take a 45% commission.
Two junior brokers at Henderson International Associates gave evidence. They said that their role was to send out company brochures and to sell carbon credits. They worked from a script and told people with private pensions that carbon credits were an appropriate investment and would provide a return better than other investment options.
Henderson International Associates put its victims in contact with a company called Carbon Advice Group. According to its website, “Carbon Advice Group is a full-service trading and infrastructure provider focused on the fast-growing international voluntary and compliance carbon credit markets.”
Carbon Advice Group claimed to provide a pension structure by investment in Certified Emission Reduction carbon credits [CERs]. The Court of Appeal judgement states that,
The funds were transferred – via a number of different companies – to CAG [Carbon Advice Group] at which point 45% of the total was transferred back to HIA [Henderson International Associates] by way of commission. Although some carbon credits were bought, this involved only a relatively small percentage of the overall investment, particularly once the commission payments had been deducted. The credits that had been purchased were eventually deemed to be worthless.
In 2019, FTAdviser reported that the Financial Ombudsman Service ruled that an advice firm called CGFM Ltd had to compensate a client after it gave “unsuitable advice to transfer a pension to a self-invested personal pension to invest in carbon credits”. The client was cold called in 2012 by Carbon Advice Group, who gave a sales pitch about investing his £45,000 pension in carbon credits. Carbon Advice Group then introduced him to CGFM.
In January 2020, CGFM was listed as having failed on the Financial Services Compensation Scheme website.
“United Nations Carbon Credit Prices May Rise by 42% by 2012”
London Carbon Credit Company’s website featured the following quotation: “United Nations Carbon Credit Prices May Rise by 42% by 2012”.
On the website, the quotation is mistakenly attributed to James Cameron, Climate Change Capital. In fact it’s the headline of a 2010 Bloomberg article, based on a comment from Trevor Sikorski, of Barclays Capital:
The Bloomberg article states that,
CERs under the UN’s Clean Development Mechanism program may rise to about 18 euros a metric ton in two years, and to as much as 25 euros in the third phase of the European Union’s carbon trading plan starting 2013, Trevor Sikorski, a London-based analyst at Barclays Capital, said yesterday.
Sikorski and Barclays Capital were just guessing (or hoping) that CERs would increase in price. The reality is that the price of CERs crashed in 2011 and 2012, as this graph from a 2019 Bloomberg article clearly shows:
By August 2012, when Henderson International Associates was pushing its victims into transferring their pensions into investments in CERs, the price of CERs had completely collapsed.
The 2010 Bloomberg article is referred to in the Court of Appeal’s judgement, with the wrong date (17 June 2013), and the wrong headline (“United Nations Carbon Credit Prices May Rise by 42%, Barclays Says”).
“None of the investors’ funds were returned”
Investors lost a total of more than £1.8 million to the London Carbon Credit Company scam. The judgement states that,
None of the investors’ funds were returned by LCCC, and, although some carbon credits had been bought by the company, they were incapable of being identified and were, in any event, of low or nil value.
Some of the investors gave evidence of London Carbon Credit Company’s hard sale techniques. The company’s sales team made phone calls “on a daily basis to overcome any hesitation to invest”. The company made up stories about the price of carbon credits, the availability of the credits, and the potential for profit.
“None of these individuals received any returns on their investments and they all lost the entirety of their money”, the judgement states.
The certificates issued to the investors were untraceable. An analysis of paperwork seized from the home address of Young Erumuse, one of the accused, demonstrated that the certificates created by LCCC were a fiction.
The judge in the Court of Appeal, “emphasised that there was no dispute that VERs [Verified Emission Reduction carbon credits] had no resale value”.
In 2016, some of the people who were victims of James Francis Byrne and the London Carbon Credit Company scam contacted REDD-Monitor. One wrote that her father had been scammed into buying carbon credits from James Francis Byrne, who worked under the pseudonym of James Mason. “My father now drinks himself into a shadow of what he once was,” she wrote. “My mother has a second job at 59!”
Another woman wrote that her husband had committed suicide after losing money to the London Carbon Credit Company scam.