A joint investigation by the SFO and Nottinghamshire police led to two former partners of Arck LLP, Kathryn Joy Clark from Nottingham and Richard Aston Clay from Leicestershire, being charged in November 2013 with fraud and forgery offences. Kathryn Clark and Richard Clay pleaded guilty to fraud and forgery offences in 2014. Arck LLP created and marketed financial products including property development in Cape Verde. The scam defrauded investors of their money, in some cases their pension monies and life savings. It is estimated that approximately £50m was invested in these products by individual investors and, in some cases, Independent Financial Advisers themselves.
Compensation update in Arck LLP
Following the confiscation orders handed down to Richard Clay and Kathryn Clark in the Arck property investment scheme in June last year and subsequent enforcement action, the SFO has now secured over £500,000 in compensation.
The SFO are seeking to identify victims who are eligible to receive compensation. To be eligible an investor must have invested in one of the schemes that were the basis of the prosecution, namely:
- The Arck Estrella or Estrella Santiago sale and re-purchase scheme
- The Paradise Beach sale and re-purchase scheme
- The Joyston schemes
Any investment in the above schemes must have occurred between 16 January 2007 and 1 August 2011.
To ensure victims are compensated fairly, any payment will be calculated using the following criteria:
- The total amount of money invested (not including any administration fees paid to ARCK LLP or fees charged by Independent Financial Advisors (IFAs) who may have assisted investors in their investment)
- How much an investor received in return from Arck LLP
- How much an investor received in compensation from the Financial Services Compensation Scheme (FSCS)
- How much an investor received from any other third party, for instance, the Yorkshire Bank’s financial assistance scheme
The questionnaire for investors to submit the information outlined above is now closed. Further updates on confiscation proceedings will be posted here.
Outcome of criminal case
Richard Clay pleaded guilty to three counts of fraud in December 2014, while Kathryn Clark pleaded guilty in July and October 2014 to three counts of fraud and two counts of forgery.
Richard Aston Clay, 50 of Nottinghamshire was sentenced to 10 years and 10 months in prison, while his business partner Kathryn Joy Clark, 52, of Derbyshire was sentenced to two years in prison, suspended for 2 years, with 300 hours unpaid work. Clay was also given a serious crime prevention order, to last for five years. Clay and Clark were disqualified from being a director of a company by the Insolvency Service for 15 and 14 years respectively earlier this year.
On 17 June 2016, Richard Clay was ordered to pay £344,244.07, £275,000 of which must be paid within 21 days and the remaining balance within three months. If he fails to do so, the Judge ordered that he must serve a default prison sentence of three years.
Kathryn Clark was ordered to pay £178,522 in confiscation, all of which is payable to victims. The Judge ordered that Clark must pay £30,000 within 21 days and the remaining balance within 3 months or serve a default sentence of 18 months in prison. This confiscation order was fully satisfied on the 28 September 2016. She was also handed a stand-alone compensation order of £40,000, which must be paid within nine months or a default prison sentence of six months will be imposed.
Page published on 10 Apr 2015 | Page modified on 5 Jan 2018