Financial advisors who carried out £17m fraud jailed for total of 11 years
- Credit: Copyright Archant Norfolk 2010
Two financial advisors began a prison sentence on Thursday after defrauding customers out of millions of pounds in life savings.
Brothers Alan Taylor, 38, of St Stephen's Road, Norwich, and Russell Taylor, 37, of Trunch Road, Mundesley, admitted in March they defrauded more than 200 customers out of almost £17m from 2008 to 2015.
They spent the money on an Aston Martin, a £45,000 yacht, an £80,000 watch collection and a £1m home.
And on Thursday afternoon at King's Lynn Crown Court Judge Anthony Bate jailed Alan for six years and Russell for five.
They were both also disqualified from being company directors for 12 years each.
Both were given a 20pc reduction in their sentences for pleading guilty early enough to save prosecution time and resources.
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Their available assets - valued at just under £550,000 for Alan Taylor and £500,000 for Russell Taylor - were also seized.
The Taylors, who inherited customers from their late father's business, were highly trusted by the investors.
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Many were approaching retirement or were pensioners wanting low-risk investments.
But instead the Taylors lied to the investors and put customers' cash into a high-risk scheme called Contracts for Differences, where they bet on the stock market falling.
Instead it rose, meaning the value of the investors' funds plummeted.
It was a win-win situation for the two men - if the investments paid off they would take 20 per cent of the profits, and any losses were effectively funded by the client.
They fraudulently produced client records and misrepresented documents and persuaded their clients, who were often elderly and vulnerable, to sign them in order to gain access to their pension funds.
Around £17m of money from 237 investors was put from the brother's Hoveton firm, Taylor and Taylor Associates, into another one of their companies called Vantage Investment Group.
Customers did not know it was going into a high-risk fund or that the brothers were the directors and shareholders in Vantage Investment.
King's Lynn Crown Court heard it enabled the brothers lead a flash lifestyle, buying an Aston Martin, a yacht and 25 hours fly time with NetJets which came to around £6,000 per hour in the air.
Judge Bate said to Alan Taylor that purchasing an Aston Martin 'can now been seen as an act of hubris.'
Detective Chief Inspector Liz Fernandes, from the Eastern Region Special Operations Unit which investigated the case, said: 'These heartless brothers cruelly took advantage of the trust their clients had in them by investing their money into a high-risk investment scheme akin to a roulette wheel.
'The victims had worked hard to accrue their pension funds and trusted the Taylors to make wise investment decisions for them. Instead they used the money for their own personal gain, frittering away their illicitly gained funds on items such as expensive cars and their own private boat bought by the business.'
They spent the money on luxury goods which have now been seized by police, including:
•A £1m home bought in Witton, Norfolk, by Russell Taylor
•A £45,000 boat bought through the business
•A watch collection worth around £80,000 owned by Alan Taylor
•An Aston Martin Volante worth approximately £150,000
The investors, some of whom had cancer and have since died, meanwhile, saw their life savings halve in value.
The Financial Services Compensation Scheme (FSCS) has paid back around 180 investors £5m, since the fraud came to light in 2015.But as the FSCS can only pay out a maximum of £50,000 many are still tens of thousands of pounds out of pocket.
Derek Secker, 85, lost almost half his money through the high-risk investment scheme, but has also had to live with the guilt after recommending the company to others.
'Alan was putting me in this high risk fund (Vantage) which I didn't know they owned 100pc,' he said. 'They could not lose with Vantage.'
'Overnight they wrote me a letter and said we were devalued by 45pc.
'You take 45pc of £300,000 that's a lot of money. I felt gutted because I worked hard all my life. I was not a spendthrift. I was careful with everything I did.' He was given £50,000 in compensation by the FSCS.
•'They took money while my husband was dying'
Another investor, whose husband passed away six months after their life savings were moved into the high-risk scheme, described the Taylor brothers as 'ruthless'.
The 67-year old said her husband was diagnosed with cancer in September 2012, and they had a review with Alan Taylor the following July.
'It was very difficult for my husband to get to the office because he was having chemotherapy,' she said. 'We made another appointment and he was so ill we had to use a downstairs office.
'Alan Taylor sat across the table and said he had a better investment that would 'better meet our needs'.
'I had no reason to not believe him. I was concentrating on my husband who was quite poorly so we just signed.
'We went there with a view to get our money in order because we knew my husband was dying. He knew that. He could see how ill he was.
'He died six months after that. It was our life savings. We absolutely gave him everything. I just couldn't believe it was so ruthless.'
See also: Victims of Taylor brother fraud speak out•'False belief in own abilities'
Earlier the court heard that the brothers were 'inexperienced' and had a 'false belief' in their abilities.
Mark Fenhalls, mitigating for Alan Taylor, said Vantage had been set up with good intentions.
He said Alan Taylor had left school aged 16 with only one GCSE – a D in home economics – and spent four years in the army before working with his father at Taylor and Taylor Associates.
Mr Fenhalls said it was 'astonishing' that someone with limited academic abilities could qualify and then become regulated by the financial services.
He said Alan Taylor tried to 'cover up his sins' by lying to clients in the hope that he could restore the money his clients had invested.
Mr Fenhalls added: 'He thought he rightly guessed the market. He made some spectacular mistakes.
'It is without question true that Alan Taylor is deeply sorry for what he has done. His sorrow extends to his younger brother Russell, he accepts he was the driving force behind Vantage.'
Richard Bentwood, mitigating for Russell Taylor, said the younger brother had a lesser role in the crime and asked Judge Anthony Bate for sentencing to reflect this.
Russell had been responsible for 65 clients and Alan Taylor 172, and that he dealt with £3.19m of clients' money which led to a loss of around £980,000. Alan Taylor was responsible for dealing with £13.5m of clients' money and the eventual loss of around £4m, he said.
•Our investigations unit was the first media to report on this story in 2015. Get the latest in-depth stories about Norfolk and Suffolk on our investigations unit Facebook page.