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Arck LLP: Two sentenced to a total of 12 years and 10 months

12 Hydref, 2015 | Eitemau newyddion

Two fraudsters were today sentenced to prison at Southwark Crown Court, having pleaded guilty to multi-million pound fraud and forgery charges. This follows a joint investigation by the Serious Fraud Office and Nottinghamshire Police.

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.

Their elaborate scam, which involved both defendants operating joint control over Arck LLP and its accounts, defrauded investors of their money, in some cases their pension funds and life savings. It was only after civil proceedings were initiated that the fraud was uncovered and the defendants were arrested in March 2012 by Nottinghamshire Police.

Clay pleaded guilty to three counts of fraud in December last year, while Clark pleaded guilty in July and October last year to three counts of fraud and two counts of forgery. Their company created and marketed investment financial products including property development in Cape Verde.

In passing sentence, His Honour Judge Loraine-Smith said:

“I have concluded two things, that you [Clay] will blame anyone else for what you have done and that you have shown not a shred of remorse for the damage you have caused to other people.”

Director of the SFO, David Green CB QC commented:

“This was a pernicious fraud that robbed people of their life savings and pension funds.”

Detective Inspector Andy Baguley of Nottinghamshire Police said:

“Whilst we are pleased that those responsible for committing these crimes have been brought to justice, we must remember that fraud is not a victimless crime. For some, the damage caused by these crimes is irreversible, and the victims will have to live with the impact for many years.”

Clay was the directing force behind the financial schemes, which operated and financed the company.  By marketing the respective financial instruments, which were sold on the basis of false and misleading information, money invested in these schemes amounted to approximately £47.5 million.

Clark was able to assist Clay with the fraud by providing a veneer of credibility because she was authorised under the Financial Services Act.  She helped create forged bank statements in order to offer comfort to investors who became anxious about their investments as time passed.

Following a plea and case management hearing in October 2014 Clarke entered into a Serious and Organised Crime and Police Act (SOCPA) agreement which meant that she cooperated with the prosecution in the case against Clay. A mention hearing to discuss confiscation proceedings is scheduled to take place on 1 March 2016.

Notes for editors:

  1. The SFO would like to thank the Nottinghamshire Police, Derbyshire Constabulary, the Financial Conduct Authority and the National Crime Agency for their assistance in this case.The case was accepted for investigation in May 2012.
  2. The two defendants were charged on 22 November 2013 and attended their first court appearance at Westminster Magistrates Court on 29 November 2013. The period during which the offences occurred was between 2006 and 2011.
  3. Clay pleaded guilty to three counts of fraud contrary to the Fraud Act 2006. He received the following sentences:
    • Count 1: 8 years
    • Count 5: 2 years 10 months consecutive
    • Count 10: 2 years 10 months consecutive to count 1 but concurrent to Count 5

It was ordered the remaining counts on the indictment should lie on the file. No evidence has been offered to count 9 as it is in the alternative to count 10.

  1. Clark pleaded guilty to five counts in total. She received the following sentences:
    • Count 1: 2 years
    • Count 2: 15 months concurrent
    • Count 3: 18 months concurrent
    • Count 4: 18 months concurrent
    • Count 5: 18 months concurrent

It was ordered that one remaining count of forgery lie on file. Further information on both defendants’ guilty pleas can be found here.

  1. Further information on SOCPA agreements is available here.
  1. A warrant for the arrest of Richard Clay exists in South Africa for similar offences to this case when he worked there as an insurance investment salesman between 1999 and 2000. This was subject to internal disciplinary proceedings in South Africa, which found that Clay had committed fraud and forgery and forced him to resign. A report was made to the police, but Clay left South Africa before arrest and arrived in the UK in 2000.
  1. Counsel for the prosecution were Sasha Wass QC and Esther Schutzer-Weissmann.
  2. Counsel for the defence were:
    • Richard Clay: Nigel Sangster QC
    • Kathryn Clark: Kalyani Kaul QC
  1. The SFO is a partner in a multi-agency campaign named Project Bloom to raise awareness of pension scams, details of which are available here. Other partners include the Department of Work and Pensions, The Pensions Regulator, The Pensions Advisory Service, Money Advice Service, Financial Conduct Authority, HM Revenue & Customs, Action Fraud, National Crime Agency and the City of London Police.