- A man has been sentenced to eight years in prison for his involvement in mis-selling carbon credits to 130 victims.
- The profits made were used to buy luxury items including an Aston Martin worth £33,000 and a £4,000 Rolex watch.
- The investigation was taken on by the City of London Police in its capacity as the national lead force for fraud, following a referral from Essex Police.
Last Friday (18 January 2019) Sami Raja, 32 of Grays, Essex, was sentenced to eight years in prison at Southwark Crown Court after being found guilty of six counts of conspiracy to defraud and money laundering.
He, along with four others, miss-sold carbon credits to unsuspecting victims through two companies, Harman Royce Ltd and Kendrick Zale Ltd, between January 2012 and August 2013.
How did it happen?
Victims of Harman Royce would receive telephone calls from ‘brokers’ of the company, who, often using fake names, would persuade them to invest in voluntary emission reductions (VERs); a type of carbon credit. Brokers at Harman Royce sought the contact details for homeowners, aged 50 and above, living in affluent postcodes in order to target their victims.
Between January 2012 and October 2012, 130 victims were charged between £5.26 and £6.50 per carbon credit, totalling a loss of £1.5 million. Evidence from an independent consultant suggests that the real trading price for carbon credits at this time was between 25p and 30p. They also confirmed that VER carbon credits do not have a secondary market and as such, the profits projected by Harman Royce of between six and 100% over four months to 10 years were false.
The money paid into the Harman Royce bank account was used in many ways. This included paying staff wages and buying luxury items including an Aston Martin worth £33,000 and a £4,000 watch.
Victims were told that they had to keep their investment in carbon credits for varying amounts of time, between four months and 10 years. They would then receive a ‘contract note’ which detailed the investment sum and how many credits this reflected.
Victims were provided with a bogus ‘carbon market analysis’ spreadsheet, which claimed to show the month on month changes in carbon credit prices between 2007 and 2012.
During a warrant in September 2013, items including client lists, contract notes and company brochures were seized.
Similar tactics were used by Kendrick Zale. Victims reported receiving unsolicited phone calls from ‘brokers’ at Kendrick Zale who used high pressure sales techniques to persuade them to invest in Certified Emission Reductions (CERs); a type of carbon credit, at an inflated price per unit. In many cases, investors were persuaded to cash in Individual Savings Accounts (ISAs) or sell existing shares with reputable companies.
In August 2013 the City of London Police began investigating Kendrick Zale, following information provided by Essex Police and due to its office location in St Mary Axe, City of London. In September 2013, officers executed a search warrant at the offices, and Raja and others were arrested. Items such as scripts, brochures and sales confirmations were seized.
Between May and August 2013, Kendrick Zale was found to have sold over 300,000 carbon credit units to 28 individual investors, totalling £900,000.
The City of London Police’s Fraud Squad, said:
“The set-up of Kendrick Zale just months after clients of Harman Royce had been defrauded shows the callous nature in which these fraudsters operated.
“Raja cruelly targeted often elderly individuals with the intention of defrauding them of their life savings. He clearly felt no remorse for their actions, closing one company, only to set-up another and commit the same offences.
“The custodial sentences imposed will hopefully go some way to deterring others from committing such offences”
Four other men were sentenced in relation to this case in September 2018. They were sentenced as follows:
Michael Nascimento – 41, of Green Lane, Belmont Parade, Chislehurst, Kent. Pleaded not guilty and was sentenced to two years for each of the three counts of money laundering to run concurrently. He was convicted on 13 February 2018. As a result of the offences investigated by the FCA, he received a sentence of 11 years, meaning his total sentence is 13 years.
Sandeep Dosanjh (Company director) – 30, of Allenby Crescent, Grays, Essex. Pleaded guilty to two counts of conspiracy to defraud and was sentenced to four years and six months for each count to run concurrently.
James Lanston (Senior broker) – 28, of The Boulevard, Greenhithe, Kent. Pleaded guilty to two counts of conspiracy to defraud and was sentenced to two years and three months imprisonment.
Charanjit Sandhu (Senior broker) – 28, of Mayfield, Grays, Essex. Pleaded guilty to two counts of conspiracy to defraud and was sentenced to three years. As a result of Sandu's offences that were investigated by the FCA and other law enforcement agencies, he received a total sentence of nine years.
The individuals in this case were sentenced in conjunction with other fraud cases investigated by other law enforcement agencies including the Financial Conduct Authority.
