By Chris Lang
The Financial Services Compensation Scheme has received 285 claims against Highpoint Trustees, a company that was called Citadel Trustees until 2014. The claims allege that Citadel/Highpoint Trustees “failed to carry out sufficient due diligence in respect of non-standard investments for which the firm acted either as trustee or escrow agent,” according to the FSCS website.
If you lost money in one of the investment schemes involving Citadel/Highpoint Trustees, you might be able to make a claim via the FSCS website:
FT Adviser reports that, “256 claims are in progress and 27 have been unsuccessful, while scheme has paid out about £30,000 to two claimants”.
Highpoint Trustees was dissolved on 12 September 2020. The most recent Joint Liquidators’ Progress Report dated 8 January 2020 states that “We have received claims totalling £3,778,000 from unsecured creditors and investors who have proved their debts in these proceedings.” That’s a surprisingly low figure considering the amounts of money in some of the investment schemes that Citadel/Highpoint Trustees was involved with. (Continue reading for just a few examples.)
In February 2021, the FSCS stated on its website that,
We’ve started assessing some sample claims that relate to the following investments: Sustainable AgroEnergy Plc, EcoPlanet Bamboo, Merco Bonds, Forest Lakes, Global Forestry Investments and Eco-Synergies ltd.
Several of these investments have appeared on REDD-Monitor. Tony Hetherington has also reported on Citadel/Highpoint Trustees several times in the Mail on Sunday. The Financial Conduct Authority failed to take any action against Citadel/Highpoint Trustees. Neither did the City of London Police, despite a detailed warning back in October 2013 about the company’s involvement in a series of extremely dubious investment schemes.
Here’s a brief look at some of the investment schemes involving Citadel/Highpoint Trustees that have appeared on REDD-Monitor over the years:
Eco-Synergies was part of a network of companies that sold carbon credits as investments. The companies were closed down in 2014 after an investigation by the Insolvency Service.
Eco-Synergies was a wholesaler of voluntary carbon credits, which it sold to other companies to sell to the public as investments. Eco-Synergies bought the credits for an average of 65 pence per credit. By the time retail investors bought them, the boiler room scammers had inflated the price by up to 869%.
Retail investors lost a total of £19 million in the scam.
The carbon credits were held by a company called Eco-Synergies Nominees Ltd. Directors of the company included Anna Rickard, who was also a director of Citadel Trustees. Other directors included Citadel Nominees Limited and Citadel Secretarial Services Limited.
Citadel Trustees offered the same “service” with MH Carbon. A company called MH Carbon Nominees Limited held the carbon credits that MH Carbon scammed investors into buying. Directors of MH Carbon Nominees included Anna Rickard, Citadel Nominees Limited, Citadel Secretarial Services Limited.
We charge £0.015 per carbon credit. The payment of our annual fees contribute to the costs in retaining the non-trading holding company we administer, Eco-Synergies Nominees Ltd. This company is the entity which holds the carbon credits.
Sustainable AgroEnergy Plc
Sustainable AgroEnergy ran an unregulated investment vehicle in a jatropha biofuel plantation in Cambodia. Between April 2011 and February 2012 the scheme raised about £23 million from retail investors.
A company called Viceroy Invest was one of the companies promoting the “investment”. A 2011 company brochure explains that,
When you purchase a Green Oil or Agro-forestry Lease, you have legal entitlement to the land and trees for 45 years. You receive confirmation of ownership through the independent, UK-based Citadel Trustees Ltd (‘Citadel’) for the duration of the investment. They hold the land in trust throughout the 45-year lease.
While Viceroy Invest was not registered with the Financial Services Authority (as the Financial Conduct Authority was called back then), Citadel Trustees was, giving the investment scheme an air of legitimacy. But Peter Hutchinson, chairman of Citadel Trustees, told New Model Advisor that,
Citadel has never held itself out as being an expert in the field of sustainable energy projects and neither has it confirmed at any time that any firm, company or individual is entitled to rely on the due diligence information provided.”
On 8 December 2014, Gary West, James Whale, and Stuart Stone were respectively sentenced to 13 years, 9 years, and 6 years in prison for their role in the scam.
EcoPlanet Bamboo is a US-based company that issued “bamboo bonds” through a UK registered company called EcoPlanet Bamboo (UK) Ltd. Citadel Trustees held the bonds and “investments” were paid to Citadel Trustees.
The bamboo bonds were marketed by several companies, including a boiler room operation called Emerald Knight, and an Oxford-based company called Property Frontiers with claims of “returns up to 895%”.
A brochure put out by Emerald Knight stated that “Citadel have undertaken extensive due diligence on the project including the review of financial plans, land ownership documents and contracts.”
EcoPlanet Bamboo (UK) raised about US$12 million from the bamboo bonds. The investment structure was complicated, involving a series of companies registered in the tax havens of the Isle of Man and Delaware in the US. Investors were left wondering where their money had gone when the companies started going into liquidation.
Global Forestry Investments
Global Forestry Investments ran an investment scheme in teak plantations in Brazil. The company was wound up in 2014. An investigation by the Insolvency Service found that Global Forestry Investments raised a total of almost £24 million.
Global Forestry Investments was not regulated by the Financial Services, but Emerald Knight – which was one of the boiler room operations pushing investments in Global Forestry Investments – stated on its website that, “Your funds are held in a UK trustee Citadel who are FSA regulated.”
In February 2015, the Serious Fraud Office opened an investigation into Global Forestry Investments. The directors of the company, Andrew Skeene and Omari Bowers, are due to appear in Southwark Crown Court on 21 February 2022.
Silva Tree ran a tree-planting project in Panama called the Princess Project. It promised investors profits of “up to 18.71%” once the trees were logged. Silva Tree also claimed to be generating carbon credits.
A Dutch journalist, Okke Ornstein, was arrested for defamation in Panama because of his reporting on Silva Tree. He was released shortly afterwards. This post describes the backstory, including Citadel Trustees’ role:
A Silva Tree brochure stated that,
The Princess Project has been designed with maximum investor security in mind, employing a firm legal structure whereby each plot of land is kept in trust with UK based Citadel Trustees for the lifetime of the usufruct. Citadel’s highly experienced team has been providing trustee and stakeholder services for more than 25 years, handling in excess of £65 million of client funds annually.
Silva Trees sent out newsletter emails that included the following statement in small print:
Neither Silva Tree Panama S.A nor Silva Tree UK Ltd is regulated by the FSA and neither company is authorised to offer advice about any investment. Please seek professional advice on Silva Tree products, such as from an IFA, about all information included in this website prior to making any investment decision. Citadel Trustees ST Ltd., who hold on trust subscription monies for the Silva Tree products described in this newsletter, are FSA regulated.
In April 2014, Citadel Trustees ST Limited changed its name to Highpoint Trustees ST Limited. In July 2016, the name changed to Burleigh ST Limited. The company was dissolved in July 2019.
In an email dated 26 July 2010, Silva Tree touted its “Silva Tree Biomass for energy Fund”. Citadel Trustees was once again involved:
With fossil fuels running out and energy demand rising, there is increasing pressure for global use of renewable energies. Biomass is a CO2 neutral, renewable energy source. Now is your chance to invest in this potentially lucrative market within a UK fund structure, operated by an FSA-regulated company, Citadel Trustees Limited with the forestry aspects of the project managed by Silva Tree Panama S.A.
It is important to remember that this project has undergone a high level of due diligence by SIPP companies, research companies, IFA networks and FSA regulated Citadel Trustee, none of whom have found any evidence to support the defamatory accusations made. We encourage anyone who wishes to do so, to speak directly to the legal department of Citadel.
Eventus Alternatives was a boiler room operation in Dubai that sold carbon credits as investments. REDD-Monitor wrote about the company in 2013:
Shortly after that post, REDD-Monitor received an email from Jennifer Arkhurst, who describes herself as “Director & Solicitor (UK) at Arkhurst & Abdellah Consultancy JLT”. A week later Arkhurst sent another letter stating that Eventus Alternatives was “seeking compensation of around US$250,000” from me.
Below is an email dated 11 September 2012 from Samuel Newson, a Senior Consultant at Eventus Alternatives, explaining that, Eventus used the services of Carbon Neutral Investments and Citadel Trustees for “clearing and settlement”. Both companies were FSA regulated.
In June 2021, Paul Seakens, director of Carbon Neutral Investments, was jailed for 13 years for his role in selling carbon credits as investments.
Sent: Tuesday, September 11, 2012 10:53 AM
Subject: RE: VCS Carbon Registry Status/Pricing
Good morning and thank you for your email yesterday.
Firstly, I am in the process of acquiring the account holder lists to prove our status with CDC Climat, NYSE Blue and Markit VCS carbon registries. I will forward this through by the close of business today, or at the very latest first thing tomorrow morning.
In short though, we have a Nominee account under EcoSynergies, a sub-account as Eventus Consultancy, and then individual client accounts under our sub-account, with all three carbon registries.
Furthermore, for your reference CDC Climat will be phasing out of its VCS registry services by December 2012 so all credits will need to be transferred to Markit or NYSE Blue by the 22nd of December this year. Please view the link below for further detail:
Secondly, unlike other brokerage firms in this region Eventus Alternatives does not handle client funds directly or set their own internal prices. Carbon Neutral Investments Limited (CNI) and Citadel Trustees Limited are used for clearing and settlement, acting as intermediaries to handle transactions between buyers and sellers. CNI (403428) and Citadel (485414) are both FSA regulated companies, members of the London Stock Exchange (LSE) and have to adhere to certain rules and regulations under UK law to protect investors, treat customers fairly and offer correct pricing on assets offered for investment purposes.
CNI operate a live clearing platform where sell-side members (project proponents/developers) provide a supply of VER (VCS) spot carbon credits onto the platform (at wholesale rates). Eventus Alternatives acts as a buy-side member and brings demand from corporate and retail clients. The VER price is agreed between the supplier and CNI and is monitored carefully to ensure it reflects fair value to both retail and corporate clients.
In contrast, other firms often operate their own internal “market price” which is indicated by the respective firm(s) internally. It will be stated in their terms and conditions though that it is not to be regarded as a price generally available from other third parties in connection with the sale or purchase of VERs and may reflect a mark-up which they are legally entitled to benefit from, on either the sale or purchase, with or for the client.
J.P Morgan’s indicative rate is currently GBP 7.50 (USD 12.00) and is often used as a reliable price gage for retail investors, although as you will be aware investment banks are a primary buyer and will also look to profit from buying at one rate and selling to their clients at another.
I will provide a screen shot of our trade execution platform (displaying pricing) and bring it along to our next meeting.
I hope this answers your questions, anything else please let me know.
Office 205, The Palladium
Cluster C, Jumeirah Lakes Towers
PO BOX 487965, Dubai, U.A.E
T: +971 4 447 0847 M: +971 567342641 F: +971 4 427 4093