QROPS Fraudster Jailed

After costing taxpayers £1.8m, a financier has been jailed in order to warn any other potential fraudsters.

London, UK (Pryce Warner International) September 15th, 2011 – After illegally releasing almost £3.5m worth of pension assets to accounts set up in Barbados and Cyprus, Colin Pearson was found guilty of fraud at Hull crown court.

He was found to be using the defrauded funds to maintain a lifestyle that included expensive cars and luxury homes around the world.

The case marks the first time that anyone has been found guilty of fraud in relation to QROPS pensions since their inception in 2006.

Pearson was sentenced to three years in jail after pleading guilty of making a false statement prejudicial to the HMRC.

Over the past three years he landed over £225 000 in commissions while his clients were able to make withdrawals from their pensions without paying the usual tax rates.

Since 2006 the HMRC has consistently updated the regulations surrounding QROPS to ensure that this sort of activity does not happen and has already made them unavailable in some jurisdictions after it was found companies were mis-selling the funds.

Pearson and QROPS providers in Hong Kong set up their schemes as a way to enable clients to have immediate access to their full pension funds, which is strictly prohibited under QROPS regulations.

In 2006 Pearson set up a Barbados based pension trust, which despite him not having a FSA registration was approved. He then again managed to set up a firm based in Cyprus in 2008 that he fooled the HMRC into believing was genuine.

However he slipped up trying to use a Cypriot accent during a phone call, at which point the scheme refused to transfer any more money into Pearson’s illegitimate Cyprus scheme.

Documents show that the loopholes exploited by Pearson have been closed, also evidenced by recent HMRC actions against QROPS providers in Hong Kong.

David Retikin, Director of Operations at Pryce Warner International, a financial services provider for Expats, commented: “Credit must go to the HMRC for prosecuting fraudsters and continuously striving to close loopholes that some may try to exploit. The actions of some have the potential to tarnish the image of a pension fund that is used by many people around the world to ensure that they maintain a secure income when retiring overseas. This case also highlights the importance of setting up QROPS in jurisdictions that have proper regulatory mechanisms. It is for this reason that Pryce Warner international only offer QROPS in Guernsey, where the regulatory system ensures that cased like this cannot happen. While some have sought to sell QROPS on the grounds that you can move your pension assets all at once or avoid tax it is highly important to recognise that this is not what QROPS are for and that providers must strive to constantly improve regulations so as to protect consumers.”

Pryce Warner International Group provide International Asset & Investment Management, Independent Financial Advice & QROPS Overseas Pensions.

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By: Aneil Fatania
Financial Editor
Pryce Warner International Group
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