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Two bosses who dishonestly secured £9 million from people who thought their money was invested in the American property market have been banned for total of 22 years.
Kevin Neil and Peter Shuttleworth have each been handed 11-year directorship disqualifications by the High Court of Justice in London on 11 February 2020, for duping people out of £9 million in a property investment scheme.
Effective immediately, Mr Neil and Mr Shuttleworth are banned from acting as directors or directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.
Mr Neil and Mr Shuttleworth’s misconduct came to the attention of the Insolvency Service after the company they were directors of, Colonial Capital Group PLC, entered into liquidation in February 2018.
Investigators soon uncovered that Colonial Capital Group, based in Essex, invited investors to subscribe to bonds with the incentive of a 12 per cent fixed interest rate per annum. According to the Insolvency Service, bond holders were told their payments would be invested into Colonial Capital Group, who would then forward the funds to a connected American company, which would use the money to buy and renovate distressed properties in the US.
Once the properties were renovated, they would be rented out or sold, while the income secured from rents or proceeds of the sale would then be passed back to the bond holders.
Between February 2014 and March 2017, Colonial Capital Group secured just over £9 million from bond holders.
Investigators, however, unearthed that no funds were invested into the connected American company over whom Colonial Capital Group would hold security.
"Whenever anyone injects funds into an investment opportunity, at some point they will want to see some form of returns. However, these unsuspecting victims saw no returns on the millions they invested and instead Kevin Neil and Peter Shuttleworth used the funds to pay other connected companies," said Dave Elliott, chief investigator for the Insolvency Service.
The Insolvency Service uncovered that £6.6 million was paid, via an unsecured loan, to a separate company in the UK that shared the same directors as Colonial Capital Group. A further £2.3 million was paid to a separate connected American company over whom Colonial Capital Group held no security.
Enquiries found that Colonial Capital Group had 244 investors and they are owed approximately £11 million, which includes unpaid interest due.
"11-year bans are substantial disqualifications, severely curtailing the ability of Kevin Neil and Peter Shuttleworth from running companies, and should serve as a stark warning to other directors that they shouldn’t attempt to hoodwink their investors," concluded Mr Elliott.