This case concerned a massive international fraudulent investment scheme which operated under the banner of the Imperial Consolidated Group of companies ("Imperial") during the period 1998 to 2002. In all, around £253 million was invested and had almost 3,000 investors. William "Bill" Godley was a director of various companies within the group, as were Jared Brook and Lincoln Fraser. Between them they were in control of all the company operations both in the UK and abroad.
The fraudulent scheme was operated in the UK from a former RAF site called Binbrook in Lincolnshire. The scheme involved sophisticated sales techniques, in less demanding regulatory environments, which induced money from investors on the basis that the UK limbs of the business were extremely profitable and worth investing in. Money was to come in from overseas investors, be applied to commercial lending in the UK and then to be paid back to investors with interest. Investors were attracted to the schemes by the promise of high rates of return and the assurance that their capital was protected. Imperial's glossy and professional brochures advertised the fact that investors' funds had the benefit of "total asset protection".
In fact, quite the opposite was true. The UK businesses, which purported to make money from various consumer loan schemes, were loss making and increasingly insolvent. Less than half of the investors' money was loaned out by the UK loan businesses. Investors' money was instead channelled in overheads and expenses, as well as extremely speculative mining interests which the investors knew nothing about.
At trial, two former Imperial directors, Jared Brook and Lincoln Fraser were acquitted by the jury of one count of conspiracy to defraud. The jury were unable to reach verdicts in relation to the remaining counts which consisted of a shorter conspiracy charge and fraudulent trading. The Judge subsequently directed that acquittals should be recorded against these charges. This was a re-trial, the jury in the first having failed to reach a verdict on a single conspiracy to defraud count.
Update as at 14 April 2014
Mr Godley's appeal against conviction has been refused by the Court of Appeal.
A confiscation hearing against Mr Godley took place on 14 April 2014. Mr Godley did not attend the hearing, although he was represented by both counsel and solicitors. The hearing proceeded in his absence.
The court confirmed that a confiscation and compensation order will be made against Mr Godley, however, the decision as to the precise quantum of the confiscation order was reserved. This means that the Judge will subsequently provide a written decision specifying the value of the confiscation order.
Once the confiscation and compensation orders are made, the defendant will be given a period within which the order must be paid. If payment is not made within the required timeframe, the defendant can be required to serve a period in custody by default. The Crown is also able to take enforcement proceedings to secure compliance with the order.
Update as at 31 July 2013
No decision has been received in respect of Mr. Godley's application for leave to appeal against his conviction. Consequently the Judge has decided that no date will be will be set for the confiscation hearing until after the conclusion of the appeal process.
Update as at 8 May 2013
No decision has been received in respect of Mr. Godley's application for leave to appeal against his conviction. Consequently the confiscation hearing has been further adjourned to 24 and 25 July 2013.
Update as at 18 January 2013
Mr. Godley's application for leave to appeal against his conviction has not yet been determined. Consequently the confiscation hearing has been further adjourned to 13 and 14 May 2013.
Update as at 16 November 2012
Upon information having been received from the Criminal Appeal Office that determination of Mr. Godley's application for leave to appeal against his conviction would not be made before 15 November 2012, the adjourned confiscation hearing fixed for 15 and 16 November 2012 was adjourned to 17 and 18 January 2013.
If Mr Godley's application for leave has been refused by that date, the court will proceed to hear the confiscation proceedings. If leave has been granted, or the application has not been determined, the court will make such order as it sees fit.
Update as at 13 June 2012
Mr Godley filed an application for leave to appeal against conviction with Blackfriars Crown Court on 12 June 2012. As a consequence of this, Gloster J ordered that the confiscation hearing listed for 13 -14 June 2012 be adjourned to 15-16 November 2012.
Update as at 27 March 2012
The court has yet to rule on the abuse of process application. The confiscation proceedings are now scheduled for 13-14 June 2012 and are provisionally allocated to the Rolls Building, London.
Update as at 6 February 2012
A further hearing in the case of Godley began in the Crown Court at Blackfriars on 30 January 2012 and lasted three days. Unfortunately there was insufficient time to deal with the issue of confiscation because the defendant had filed an abuse of process application and this had to be addressed. The court will hopefully give its ruling on the abuse of process application in February. Meanwhile the confiscation proceedings have been adjourned to a later date, probably in June 2012.
Update as at 22 November 2011
The online survey will re-open from today until 30 November 2011. This will give anyone who did not complete it when it was first advertised, an opportunity to do so. There is no need to fill it again if you already did so earlier this year.
- Only complete the survey if you did not do so earlier this year.
- Only complete out the survey if you invested in placement funds. If you are not sure what type of fund you invested in, complete the survey anyway and we will check out records.
- Restrict your answers to investments made during the period 1 November 1999 and 30 June 2002.
- Restrict your answers to capital investment, less any redemptions. The confiscation process is not designed to reimburse yield or interest on what were fraudulent investment schemes.
https://www.surveymonkey.com/s/ZJ76YLV [now closed]
Update as at 31 August 2011
Thank you for all your responses to the online survey. This survey has now closed. If you completed a response this information will be provided to the court for the court to decide how to resolve the confiscation proceedings against William Godley.
Update as at 21 April 2011
On 5 August 2010 Mr William Godley was sentenced to three years six months imprisonment for his plea to a charge of conspiracy to defraud investors in Imperial Consolidated. Mr Godley will be eligible for release on licence having served half that sentence in custody, but he must remain on licence until three quarters of the term has expired. Mr Godley was also disqualified as a director for a further six years.
When Mr Godley was sentenced, the court concluded that there was a substantial body of evidence that demonstrated that between 1 November 1999 and 30 June 2002 Mr Godley was a party to dishonest conspiracy to defraud investors.
The SFO is now in the midst of pursuing confiscation proceedings against Mr Godley. Confiscation proceedings are the process by which the Crown attempts to recoup the proceeds of crime. The substantive hearing is due to be heard at Blackfriars Crown Court on 20 - 23 June 2011.
Compensation, which can be part of confiscation proceedings, can be awarded by the court in criminal confiscation proceedings.
Many victims will have registered a claim for the money lost to Imperial Consolidated with the administrator, Mazars. Mazars are only able to distribute the liquidated assets of Imperial Consolidated to people who invested in mutual funds. Placement funds are not being reimbursed by Mazars because placement funds were not secured via a UK company. It is likely that mutual fund creditors may recover about 5p in £1 from distribution of assets by the administrator.
The Serious Fraud Office would like to equalise this position by seeking compensation in the criminal proceedings for the placement fund creditors. As with the distribution of funds by the administrator, any compensation in the criminal proceedings is likely to represent only a small proportion of the original investment.
Ultimately, the award the compensation will be a decision for the court, but the SFO intends to make the application.
In order to do this we need to update our information about placement fund creditors. To do this, we are asking placement fund investors to complete a short online survey to update their details:
https://www.surveymonkey.com/s/ZJ76YLV [now closed]