• Government committee estimates £10bn lost to pension scams
  • Experts say property investment fraud is particularly hard to uncover

David Ames’ business looked like the real deal. The Essex-born man promised massive returns for investors in his Caribbean resort development company Harlequin Group. He had the backing of former footballers including Andy Townsend and John Barnes, financial advisers and institutions, and even property TV celebrity and Location, Location, Location host Phil Spencer.

Then it all came tumbling down. Two months ago, Ames was sentenced to 12 years in prison for defrauding more than 8,000 people of their investments between 2010 and 2015 in what the judge described as a “gigantic ponzi scheme” amounting to £226mn. The court heard how thousands of victims lost their pension funds and life savings investing in Ames’ fraudulent business while the man himself pocketed £6.2mn.

The story is an extreme example of an all-too-common kind of property investment scam whereby criminals posing as legitimate entrepreneurs dupe swathes of small-time investors by promising them a healthy return on their investment. The scam works by asking individuals to stump up thousands of pounds at a time usually from their pension pot to invest in schemes which are not yet built.

After the people behind the scam have pocketed all they can, they disappear – either by collapsing the company or group of companies in some way or by ghosting their investors or both. Little if any of the promised development is ever completed and the unfortunate investors almost always lose all of their investment. Although scams, ponzi schemes and misleading investment opportunities involving property companies are in abundance (see boxout), they are not always easy to spot.

Using misdirection to take investors’ money is nothing new, but some worry that investment scams are on the rise as the cost of living crisis and a looming recession makes both investors and scammers more desperate. Yet, even before the current economic malaise, the number of scams had been rising for nearly a decade, in part, as a result of the introduction of pension freedoms in 2015 which increased the appeal of self-invested personal pensions (Sipps).

The House of Commons Work and Pensions Committee said in a report in March last year that while Sipps give people more choice, they also put them “at risk of a wider range of scams and financial fraud”. It also raised concerns about underreporting of the problem. Action Fraud has said that £30mn was lost to pension scammers between 2017 and August 2020 but the committee said there was “no doubt that [this was] a substantial underestimate” – judging instead that more than £10bn has been lost to pension scamming since 2015.


Risk and reward

The clear blue water between Action Fraud and the committee’s estimate suggests many scammers get away scot free. The committee criticises both Action Fraud and the Financial Conduct Authority (FCA) in its report for not doing enough to tackle the problem and quoted one scam victim who described scams as a “low risk, high reward business for the perpetrators”. It says part of the reason for the lack of convictions is the disparate nature of enforcement, noting that Action Fraud and the FCA are two of many bodies – including the Serious Fraud Office (SFO) and the Insolvency Service – which are responsible for investigating different scams depending on their type, scope and scale. 

Take property development investment scams, for example. The FCA says “land for development investments are not generally regulated by the FCA”. Meanwhile, the Insolvency Service will only look into it if the company in question became insolvent and the SFO will only investigate if the scam is big and complex enough that it – for example – crosses borders and involves hundreds of millions of pounds such as in Ames’ case. This leaves Action Fraud picking up most of the slack.

Not everyone blames the running and resourcing of government authorities for the lack of investment scam convictions. Wayne Stevens, national fraud lead at crime and trauma charity Victim Support, argues that it is banks who should be using their financial heft – as the institutions which ultimately move scammers’ ill-gotten money – to crack down on the issue. “How many letters do you get from your bank about borrowing money versus how to protect yourself from fraud?” he asks.

Enforcement is only one half of the issue. Stevens says the other reason for the “dispiritingly low level of law enforcement activity” against scammers is that victims often do not come forward out of embarrassment over being tricked. He tells the story of one woman who phoned Victim Support for help who had not even told her husband. Some of the victims who spoke to Investors’ Chronicle for this story were also reluctant to speak on the record for similar reasons.


Main players and companies



David Ames, Harlequin Group

12-year prison sentence, September 2022

Ames arrested for a £226mn fraud involving over 8,000 investors who lost almost all of their investment.

Anthony Jon Domingo Armstrong-Emery, Ecohouse Developments

14-year director disqualification, May 2019

Ecohouse Developments went into liquidation owing more than 350 investors circa £21mn.

Christopher Bateman and Nicola Fairweather, GCC Management and Amek Solutions

25-year director disqualification, November 2022

When GCC Management entered into liquidation, investors were owed £13.2mn.

Mitchell Mallin, Essex and London Properties

14-year director disqualification, June 2021

“Ponzi” scheme in which creditors were owed £11mn when the company was wound up.

Absolute Living Developments

Six directors banned for total of 54 years, December 2018

Misled more than 300 people to invest £12mn into residential property developments.

It can be tempting to read about these sorts of scams and imagine ‘it could never happen to me’, but Ames’ case shows there is a fine line between fraud and legitimate venture. Ames had indeed developed some properties in the Caribbean with his investors’ money – 172 villas and hotel rooms were built at Buccament Bay in St Vincent – but he had promised to build 8,200 across seven locations in the Caribbean and Brazil and had no external funding despite telling his investors he did. As a result, 99 per cent of his investors made no return.

Stevens says that what makes property investment fraud in particular difficult to uncover is that it can take a long time for it to become apparent that a fraud has taken place. Because legitimate property development is a long-term investment, victims might not notice they have been duped by an illegitimate scheme until the promised maturity date of their investment rolls along five or 10 years down the line. Indeed, at first, there might not be much duping at all. A source close to the SFO believes this was the case with Ames, adding there must have been a “tipping point” for him – a moment when he went from on some level actually intending to develop these villas to deciding instead to fleece his investors for as much money as possible.

One scam victim named Peter who spoke to Investors’ Chronicle but cannot be identified for legal reasons said he too felt there was a moment when his scammer was attempting to run a legitimate property development business. Peter put £225,000 into a company which, when it collapsed, was £23mn in debt to hundreds of investors and creditors. As one of the early investors, he managed to make around £200,000 back. At the time, this gave him the impression that the company was doing quite well, although he now worries that most if not all of the earnings he was paid were off the back of new investors.

“I think, in the beginning, there was an attempt to run this as a legitimate business,” he recalls. “But almost as a default it turned into a ponzi scheme as they were using investments to pay off their investors’ interest payments.”

Like Stevens, Peter is critical of the banks for not doing enough to police investment scamming. He alleges that his scammer was in cahoots with a personal banker at his local branch. As well as bringing a case against the scammer, Peter says many victims are also mounting a case against the bank. With both of these cases, he says police progress has been “painfully slow” – another reminder of the difficulty of enforcing fraud law and convicting the perpetrators.

Peter’s case might not even result in a conviction. Not every instance where multiple small-time investors believe they have lost money on property ventures which fall through counts as fraud – even if a government body like the SFO initially opened a probe looking into whether a fraud took place. In October 2021, it dropped a three-year probe into an alleged fraud in Liverpool where investors believed they lost money on developments called New Chinatown, North Point Pall Mall and Pinnacle Angelgate which were never built.

As such, it is even more important for investors to be vigilant about the real risks of losing money even where there is no scam. 

The lack of internet regulation can add to the perception of legitimacy. The Work and Pensions Committee report singled out Google – part of Alphabet (US:GOOGL) – in particular for continuing to run adverts for scammers while simultaneously running adverts on how to avoid being scammed. There is also little regulation of the many websites which clone the look of a legitimate company’s website. In both instances, cross-referencing the URL with multiple sources is vital.


Fool me twice

One final thing for investors to be wary of is scammers who prey on those who have lost money in a previous scam by promising to get the investment back. Ultimately, victims of fraud should stick to the advice of the SFO and FCA as well as charitable organisations such as Victim Support and Samaritans who can offer impartial advice on how money can be reclaimed.

For his part, Peter has made a lot of connections with fellow victims through a series of WhatsApp groups which he says have helped him to learn more about how the scam unfolded, how much money has been lost and the status of the legal cases against the scammer. “Acting jointly has been an absolute godsend,” he says. However, the SFO urges caution when sharing details with people claiming to be fellow victims as this too could be another scam.

None of this means people need to avoid property investment altogether. There are plenty of legitimate ways of investing in property development, starting with real estate investment trusts (Reits), and risks can be managed by, for example, selecting publicly accountable and heavily regulated vehicles with good track records.

The warning signs for investors should always be a stress on time sensitivity or ‘one-time offers’, unrealistic returns and a chance to invest in unfinished projects. Sadly, though, no amount of endorsement from celebrities or financial institutions can guarantee that investors will avoid a scam or generate returns. If in doubt, just back out.

Peter knows this all too well, and hopes his story can act as a warning. “I don’t think we’ll get our money back, but if we can through the media forewarn other people of what can go wrong that’s a service to humanity as far as I’m concerned.”

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