Fraud trial: Check carefully before parting with money
THE POLICE financial crimes unit and the Island’s financial services regulator are urging those buying investment products to carry out thorough checks before parting with money.
A joint statement was released following the jailing of former Lumiere Wealth managing director Chris Byrne on Friday for over a dozen fraud-related charges.
‘The police encourage all persons looking to invest funds on the advice of a public financial adviser to follow the guidance issued by the Jersey Financial Services Commission available on their website or at their Castle Street office,’ the statement said.
It went on to highlight the work the two bodies undertook in investigating Lumiere’s activities before bringing the matter before the courts, and thanked those who helped with the prosecution.
‘They hope that his conviction will encourage members of the public to ask questions of their financial adviser about their investments and to read carefully any documentation supplied to them before investing,’ it added.
But some of those who lost a total of £11 million after investing in Providence funds, which Byrne sold them fraudulently, have been critical of the regulator, saying JFSC should have acted more swiftly and aggressively when concerns about Lumiere and Providence were raised.
Privately, they told the JEP they were shocked when they learned during the trial that the JFSC raised concerns with Byrne that Providence might be a Ponzi scheme months before any action was taken.
In the first part of Byrne’s sentencing, Commissioner Sir John Saunders, who heard the trial with Jurats Charles Blampied and Robert Christensen, noted that some of the witness impact statements from the financially ruined investors commented on what they saw as JFSC failures. Sir John urged that these comments be passed on to the regulator.
But the joint statement from police and the JFSC focussed only on the work that was done to bring the case before the courts.
‘Byrne’s activities first came to light when officers of the Jersey Financial Services Commission commenced an on-site visit to the Castle Quay offices of Lumiere Wealth in June 2016,’ the statement about ‘Operation Parrot’ said.
‘The Joint Financial Crime Unit commenced an investigation three months later when an elderly client of Byrne’s made a complaint about a fraudulent million-pound loan made to Byrne.
‘The JFSC and JFCU worked in tandem as a range of criminal and regulatory offences came to light. Over the following 12 months, JFCU officers spoke to a large number of Lumiere Wealth clients, 13 of which were prepared to give evidence at trial.
‘In the early stages of the investigation, all officers in JFCU office and personnel from other police departments were working on the case.
‘In all, 148 statements were recorded from 73 witnesses and 535 exhibits, containing tens of thousands of physical documents and millions of computer files, were produced.’
The teams listened to 21,000 telephone calls that were recorded at the Lumiere office and read more than 32,000 SMS and chat messages.
‘Above all the investigation highlighted the vulnerability of clients placing high degrees of trust in their financial adviser,’ the statement said. ‘Some of Byrne’s victims had known him for many years and came to trust him implicitly. Believing him to be giving impartial advice and having their best interests at heart they went on to lose £2.7m worth of their savings. In many cases the financial loss will have a lasting effect on their lives.’