Lancashire fraudsters sentenced for £6m investment scam fuelled by g

Con artists who ran two bogus investment schemes and coerced over 150 victims out of £6m have been sentenced in connection with fraud and money laundering.

Five of the gang are from Lancashire. Their victims, a number of whom were elderly and vulnerable, lost life-changing sums of money.

Police say the fraudsters were motivated by “pure greed”. One victim described how she was ‘hounded’ into parting with her cash.

David Clarkson, pictured, 70, of Livesey Branch Road, Blackburn, the shadow director and mastermind behind the operation, is now starting a seven years and six months jail term.

He pleaded guilty to all the charges he was facing, including conspiracy to defraud, money laundering and perverting the course of justice, at an earlier hearing.

On March 21, his co-defendants were found guilty of a number of offences. They were sentenced on Tuesday July 22, following a six-month trial at Southwark Crown Court in London.

Lillian Milner, 57, of Sliven Clod Road, Rossendale, was found guilty of conspiracy to defraud and money laundering and sentenced to five years and six months in prison.

Anthony Flaton, 39, of Beauclerk Green, Winchfield, Hampshire, was found guilty of conspiracy to defraud and money laundering and was given a five-year prison term.

Mark Fallon, 60, of Haslingden Old Road, Rossendale, was found guilty of conspiracy to defraud and money laundering and sentenced to four years and six months.

Graham Milner, 55, of Sliven Clod Road, Rossendale, was found guilty of money laundering and sentenced to three years and six months.

Paul Clarkson, 46, of Shawbridge Street, Clitheroe, was found guilty of money laundering and sentenced to 20 months, suspended for two years. He must also carry out 180 hours of unpaid work.

As a result of work carried out by the City of London Police, in conjunction with the banking sector, more than £2m of the stolen money has been returned to the victims.

Speaking after the sentencing, Detective Constable Jay Smith, from the force’s specialist operations team, said: “This was a complex, years-long investigation involving multiple agencies and international support. It’s thanks to persistent and diligent work that we achieved this outcome.

“These fraudsters stole life savings from hundreds, abusing their trusted positions out of pure greed.

“Clarkson, in particular, showed no remorse - cloning a regulated insurer and impersonating the broker to trick victims and later forging medical documents to avoid trial. Faced with overwhelming evidence, he eventually pleaded guilty.

“I thank the victims and their families for their strength and cooperation, and we remember those who sadly died during the process. I hope this result brings some comfort.

“We remain committed to pursuing those who abuse trust and exploit the vulnerable. Let this case be a warning: you will be found, prosecuted and convicted.”

City of London Police officers launched a money laundering investigation in August 2016 after receiving information that large and unusual payments had been made by a company named Sable Intl Ltd to a newly incorporated law firm.

The company, which advertised as investing in distressed property, launched a £3.5m corporate bond scheme offering attractive fixed interest returns of seven per cent.

Following initial enquiries, detectives discovered that David Clarkson and his accomplice Lillian Milner, with the fundraising of Anthony Flaton, were the driving force behind this fraudulent activity and were linked to an earlier scheme: Equitable Law Capital, (ELC), registered in Lancashire.

ELC was also an investment company that specialised in litigation funding, with investors promised high fixed interest returns.

Little did investors know the companies were generating zero returns on claims funding and instead their money was used to repay other investors and shared among the fraudsters to fund their lavish lifestyles.

The court heard how David Clarkson, Lillian Milner and Anthony Flaton used internet advertising, telesales and misleading company brochures to market the schemes.

They used high pressure sales techniques to coerce hundreds of victims into investing large amounts of money into the two companies. Initial investors were persistently pursued and encouraged to invest more or offered alternative schemes.

To gain the trust of their victims, they promoted an insurance policy and mis-represented association with FCA-regulated companies to dupe investors into believing the schemes were legitimate and low-risk.

Lillian Milner’s partner Graham and David Clarkson’s son Paul were appointed company directors of ELC despite having no experience. They were both involved in laundering the proceeds of the fraud.

When ELC began to fail the same fraudsters set up the new company, Sable, to raise more money.

David Clarkson, who was described in court as being the ‘controlling mind’ behind the fraud, used a front company based in the Seychelles and Switzerland to launder the funds stolen from both schemes.

Mark Fallon, an experienced solicitor, and Lillian Milner used a newly incorporated and regulated law firm to launder funds from the Sable scheme. Illicit commissions were also paid to an offshore account in Mauritius for the benefit of Anthony Flaton.

Both ELC and Sable entered administration and voluntary liquidation at the end of 2016. They owed a collective total of more than £4m.

One elderly victim, who lost £80,000 died in June 2015. Her relatives were unable to get her investment back prior to the collapse of ELC. A number of other victims died during the course of the investigation.

Throughout the case, detectives reviewed roughly 2,500 documents, assessed more than 1,100 exhibits, took 150 witness statements and interviewed 15 people under caution.

In an impact statement, one of the victims said: “Dealing with this case has been very overwhelming and mentally consuming, often leaving me feeling very depressed with a general loss of faith in humanity.”

Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: “We are committed to working with the police to fight financial crime, particularly where fraudsters seek to falsely exploit links to FCA-regulated companies to deceive investors.”