It was February 2017 when 65 year old David Ames from Wickford, Essex, the Chairman of the Harlequin Group of companies, was charged by the Serious Fraud Office Chairman of three counts of Fraud by Abuse of Position, contrary to section 1 of the Fraud Act 2006.The alleged activity occurred between January 2010 and June 2015.
Ames strongly challenged these charges maintaining his innocence. For years there had been snipers about his various businesses no doubt fuelled by jealously of his success, high levels of charisma and visionary ability to spot opportunities in the market to create wealth for others and of course for him and his family too. At the time the charges were put to him in 2017, he was doing very well. After an early career in insurance and financial product sales, where he excelled, he was now involved in the property market. There had been the blips along the way we sometimes see for those who risk a lot for high returns. Ames had been twice bankrupted when he owned companies selling garden furniture and windows, and he also had experience of timeshare sales. But he had learnt from this and it was all in the past. What mattered was the present and, of course, the future.
Harlequin Group
Ames had set up the Harlequin group, an international network of resort development companies, in 2005. The premise of the business was really simple – he encouraged people to invest in off-plan holiday cabanas and apartments across the Caribbean and in Brazil. Predicting major tourism development opportunities in these areas, the returns for investors were incredibly attractive.
He secured the endorsement of local politicians in the regions of development, including the prime ministers of Barbados, St Lucia, and St Vincent and the Grenadines. Ames had been temporarily barred from serving as a company director due to his previous bankruptcy and therefore was the “chairman of Harlequin”.
Celebs
The scheme was backed up by endorsements from a number of high profile celebrities which Ames pushed with glossy brochures and his pitches at high-profile sales events in golf clubs, conference centres and exhibition centres across the UK. Some of the celebrities involved included Wimbledon champion Pat Cash, who endorsed the tennis academies planned at the resorts. Gary Player, a nine-times winner of major golfing championships was on board to design a golf course at one of the resorts. And Liverpool FC would be associated with football training at the resorts. Former football player and media pundit Andy Townsend was for a long time the public face of the company. Former cricketer Ronnie Irani was a supporter and of course, Phil Spencer from the telly was happy to lend his name to the company for the right fee. As you can imagine, all of these people were paid very handsomely for their endorsements, and it built trust in the opportunity among the target market.
Along with this, Ames used 2,000 to 3,000 intermediary sales agents, some of them on commissions as high as 10% of the purchase price. He also used a network of independent financial advisers, and these were offered some great incentives to sell being offered 10% commissions with no clawbacks, even if the investor later dropped out. This was way above what others were paying and allowed some of the salespeople to make life changing amounts – One salesman, Michael Withey, made £3million in commission despite having ‘no relevant property experience’.
Business Model
The Harlequin business model was, well, your average 14 year old business studies student could easily spot the flaws. Let’s just go through the basics. Approximately 9,000 investors invested a total of around £400m in the projects, with in some cases the same property being sold to multiple investors. Everyone who invested to buy an unbuilt villa or hotel room paid a £1,000 reservation fee and a 30 percent deposit. Now the next part is interesting: Harlequin put 15% of this towards the construction and the rest went directly to Harlequin of which some of this paid the commission of the sales agents. But none of the money from investors was ever ringfenced for particular resorts or properties but spent throughout the Harlequin company. And with no funding except the money from investors, more than three properties had to be sold to get the money to build one. So, Ames began to market properties on land he did not own and had no planning permission for at Buccament Bay.
This led to a huge expansion of the scheme, the diversion of investor money between resorts, and ultimately a massive funding shortfall. It makes a total mockery of the byline in so much of the Ames sales literature which said: ‘Harlequin Property a company you can trust’.
There had been concerns about the business for a number of years. In 2011, Ames was advised by restructuring and insolvency practitioners he might be trading while insolvent. But this had the opposite effect on him and rather than stopping selling he made every effort of increase sales. The Serious Fraud Office (SFO) started an investigation into Harlequin in 2012. It asked investors to fill in and submit the SFO’s further questionnaire about their investments – but it was only in 2017 that this authority felt they were in a position to press charges. And in June 2013 the Financial Conduct Authority (FCA) first published a warning to the public saying: “If you are considering investing with the Harlequin group of companies you should do so with caution and firstly get independent legal and financial advice. The Harlequin group of companies is involved in the development and distribution of overseas property investments and resorts. None of these companies are regulated by us. We urge all investors who are considering investing with Harlequin to seek independent legal and financial advice before committing to any investment. We suggest this includes independent legal advice in the country where the property or investment is located.”
Administration
And it was later in 2013 when the company finally fell into administration. At this time, around 9,000 property units had been sold to a variety of investors, with fewer than 200 ever actually being built.
Of those that were completed, they were all at the same resort, Buccament Bay in St Vincent and the Grenadines which was seen very much as Harlequin’s flagship resort, which promised a big resort style unusual among smaller Caribbean islands. He had targeted this in particular as it was timed to coincide with the opening of a new airport on the island in 2017. However, the 700-acre site saw only 134 rooms developed and closed in 2016. The area was acquired by Sandals Resorts International in 2020 with plans to develop it into a Beaches property.
Through the eight years that Harlequins was in the business of selling dreams, a shockingly low number of just 28 of over 8,000 investors actually completed on a purchase. You heard right, 28. Well over 99% lost their investment as the Harlequin Group lost a total of £398 million of investor funds.
Personal Stories
And as always, the personal stories from this fraud – let’s call it exactly what is was – were just awful as real lives were destroyed One of the victims, 52 year old Martin Dansey, 52, lost all of his and his wife’s £241,500 life savings with Harlequin, leaving him in a “desperate financial situation”. In his victim impact statement, he later told how he had suffered “enormous stress” and had to sell his house to support his wife and two young children. A yoga instructor called Jo lost £250,000, ‘He’s ruined my life,’ she said. ‘I would like to see the celebrities paid vast sums to give credibility to this scheme help victims.’ I don’t disagree, do you? Then there was 58 year old Richard Jacob who invested £96,000 in two units at Buccament Bay – the entirety of his pension pot. He lost every penny.
The Ames Family
Let’s contrast the victims to the Ames family who were doing rather nicely out of the success of the business and living a great life. It was estimated they had taken at least £6.2m from the Harlequin business, and all were enjoying a luxury lifestyle flying to and from the Caribbean, with Ames having his own chauffeur on the payroll. Ames had a luxury box at Wembley stadium. Whilst Ames was in charge of the day-to-day running of the Harlequin business, his wife, Carole and son Dan were directors. Another son, Matthew took control of the marketing.
It is said that the family members were paid £10,000 a month, which must have been very nice for them. Ames was trying to build his own airline, Harlequin Air, to fly guests to and from the resorts he was building. It should be noted very clearly that Ames’s wife and sons were not charged with any offence. However, his son Matthew had been in trouble with police in recent years on other matters so let’s quickly digress to hear about this.
Matthew Ames Fraud
In 2014, Matthew Ames was jailed for three years and four months for carrying out a £1.6m Ponzi scheme fraud after setting up bogus carbon credit and teak tree investment schemes. Between 2008 and 2010, Mathew Ames had targeted potential investors through his companies The Investor Club and Forestry for Life, with the promise of high percentage and long-term returns on what were marketed as ethical enterprises. The problem was no land or trees were ever bought and no money was invested in the carbon credit markets. The glossy brochures promoting his seemingly ethical scheme included quotes from Prince Charles and Tony Blair to promote teak plantation schemes in Sri Lanka and an investment in the protection of the Brazilian rainforest.
It was the classic Ponzi scheme we have heard so much about on this podcast. To give the impression of success and encourage new investment, the funds from later investors were paid out to earlier ones. When the inevitable happened and it all came crashing down, the average investor loss was £120,000 – a huge number for many ordinary people. You won’t be surprised that Matthew Ames didn’t go without in the time he was running the fraud and lived an extravagant lifestyle, including driving a Lamborghini and luxury holidays. But as the situation closed in around him, Matthew Ames was increasingly elusive to investors. And as they struggled to contact him, more reports were made to the Financial Services Authority which led to his businesses being put into liquidation and the charges laid at his door. He pleaded not guilty at court telling jurors he was not able to plant 5,000 tree saplings in Sri Lanka because he could not secure the “right” land.
He also claimed that every single pound of the tens of thousands of pounds that he invoiced his firms for business expenses were “perfectly legitimate”. Jurors got an insight into Matthew Ames when some of the emails he sent to investors were read in court. In one April 2010 email, he wrote: ‘You just caught me coming out of a Lamborghini after ordering my new one. ‘I’m opening a new office in Dubai alongside ones in Singapore, Dublin, and London and have travelled between India, Singapore, and London’.
Unravelling of Harlequin
The jury didn’t believe his defence and with his mum and dad in court, he was found guilty on two counts of fraudulent trading and sent to prison. On his release, he was straight back into the family firm with responsibility for marketing.
But let’s get back to the main story about the demise of Harlequin – remember, Matthew Ames has never been charged, it was his dad David who was charged by the Serious Fraud Office in 2017. Let’s take a look at how the business finally unravelled. David Ames was interviewed by police twice, firstly in 2013, and then a couple of years later in December 2015. During these interviews he denied he had in any way acted dishonestly, and continued to promote the Harlequin business model as a viable enterprise which he believed could bring financial returns to investors. Indeed, Ames was very clear that the interests of investors were the most important thing across the entire Harlequin enterprise, and he had done things properly, telling Serious Fraud Investigators investigators that he had relied heavily on the advice provided to him by a range of professional advisors.
Ames placed a large share of the blame for the company’s issues at his builders, his accountants and the negative publicity around the company and the investigation into Harlequin.
Firstly, he was very unimpressed by his Irish building contractors, ICE. He thought they had taken money from him. When he took ICE to court, some quite remarkable examples of contractual incompetence were revealed. Harlequin paid £45m to build the Buccament Bay resort, but get this: there was no written contract, no detailed agreement over scope and no monitoring or valuation of works. I am no building expert, but surely this is page one in the manual of what you must do when you hire a building company. In 2013, the Manager at ICE, Padraig O’Halloran was ordered by an Irish court to pay £1.38m) in damages to Ames over misappropriating Harlequin funds to his personal bank accounts. The judge heard there was ‘persuasive’ evidence of O’Halloran taking more money from Harlequin to spend on items with nothing to do with the project including buying a private jet, a racetrack in St Lucia, expensive gifts including a $65,000 diamond ring for his girlfriend, buying a quarry and renting a super costly mansion in Barbados.
Secondly, Ames felt other advisors had let him down, especially his accountants, Wilkins Kennedy, whom he said were negligent. In civil proceedings in London, Ames sued Wilkins Kennedy for negligence, where it was heard that a partner at the firm Martin MacDonald was alleged to be too close to O’Halloran from ICE. A high court judge awarded Ames $11.6m. A significant amount sure, but only half the amount he claimed in damages, because of Ames’s contributory negligence. The judge also ordered the amount be placed in a separate account that was ring-fenced for investors.
Ames also blamed all the negativity around the company, especially a site called “Harlecon” which had been set up to voice concerns about the company. The investigation into him and the company was also incredibly unhelpful he said as it stopped people investing and meant the company was always fielding questions. To counter this, Ames developed a reputation of being extremely litigious. He threatened legal action against investors who went public with complaints about the company and media outlets who covered the issues – especially the BBC. He also did not stand for internal dissent within the company and those raising problems with the business model and treatment of investors didn’t stay with harlequin for the long-term.
Trial
Ames chose not to give evidence at his trial where he pleaded not guilty. The charges covered the period from 2010 – and not from the earlier period 2005 when Harlequin formed – because by then the state of the business was such he must have known he was exposing investors to risk, the court heard.
The court heard how the team at Harlequin had sold the scheme to a large number of people with Self-Invested Personal Pensions (“SIPPs”), with many of these people elderly with little investing experience. It should be noted that regulations around SIPP’s were tightened in 2012. Serious Fraud Office Investigators presented the court with victim statements, which highlighted the personal impact suffered by these investors. We have heard a few accounts earlier in this episode, but there were such a large number of people affected who were often forced to delay their retirement, having lost their pensions and life savings after a lifetime of hard and honest work. The contrast between the investors who had lost everything and Ames, the man who had been selling dreams and yet was the reason for the loss of not just dreams of investors, but everything they had worked for. Many victims spoke about their struggles with financial hardship, some having re-mortgaged their homes and paying off loans taken out to cope. The jury was told how this led to breakdowns in some investors’ relationships with friends and family, conflict within families and a wide variety of physical ailments brought on by the situation, including stress, anxiety and depression.
Michael Bowes QC, prosecuting, told jurors in his closing speech how Ames had “lured investors in” by offering a 100 per cent finance scheme with a 70 per cent mortgage guarantee. ‘That 70 per cent mortgage was not available. How could David Ames ever truthfully have allowed it to go out? He knew it simply wasn’t true’, said Bowes. “They were saying ‘come on, it’s lovely, we’ll look after you!’ “It was a deliberate lie to entice investors.”
Jurors heard investors were told to “contact us for any further information”. Bowes continued that if potential investors asked for more information about the mortgage provider, they would have found that there was not one. “This made it sound like arrangements were in place, but they weren’t.”
He got to the crux of the fraud by saying that Ames had to keep selling in order to get the money to build the properties, but he would ultimately never make enough. “You have to keep selling, with an ever-increasing obligation to build,” said Bowes. “You just have to keep selling, as you never get enough to build from what you’ve sold. “Of course, David Ames understood. It is obvious it just gets out of hand. It was always out of control.”
And despite the objections and different narrative delivered from his legal team, the mood in the court during the trail always felt like the jury didn’t believe the story his lawyers were telling them. And when the jury came back from their deliberations, they unsurprisingly found Ames guilty.
The legal team for the Serious Fraud Office pushed hard for a lengthy prison sentence. Not only did Ames cause financial and long-term harm to thousands of victims, but they believed a major aggravating factor was his failure to respond to at least eight warnings about the Harlequin businesses from business associates, financial professionals and authorities. Moreover, Ames was also found to have wrongly attempted to place the blame on his associates and lied to investors on numerous occasions.
The Verdict
He was convicted in August 2022 of two counts of fraud by abuse of position. For this he was sent to prison for 12 years. Ames was also disqualified as a company director for 15 years.
The Judge said that, although he accepted Harlequin was not fraudulent from the very start, by 2010 Ames was “operating a gigantic Ponzi scheme” backed by a “sophisticated marketing operation” involving “celebrity endorsements and some very lavish entertaining indeed”. “You were clearly far more interested in pocketing investors’ money than in ensuring those investors were getting what they were paying for”. You are a thrice-bankrupt fraudster who has caused losses of over £200m by your fraudulent conduct,” he told him. “You were a slick and plausible salesman and thoroughly dishonest with it. In short, you are a menace to anyone who was to do business with you.”
Appeal
In his inevitable appeal against sentence, Ames raised a question of law about the fraud act – I won’t go into the details here, it took me about 12 reads to understand it but if you are interested, you can see the ruling in my show notes. But essentially, he said that the judge misdirected the jury. The Appeal court judges disagreed, holding the jury had been directed properly and the appeal against conviction was dismissed.
The court also dismissed the appeal against sentence, finding that the judge was justified on the facts to impose consecutive sentences and had taken proper account of available mitigation, delay and totality factors.
What do we make of this?
I think it is really important we cover stories such as financial fraud on this podcast. You just know that when a conman like David Ames leaves the arena to spend some time eating porridge behind bars, there are numerous others out there waiting to take his place and try to separate us from our hard-earned money. And in this case one factor which really grated with me was all the celebs – I use the term loosely – getting paid handsomely to promote the investment opportunity and yet in reality, what was their skin in the game? Had they invested their own cash in the venture, I don’t think so, do you? I think I can guarantee that when all went wrong these people didn’t return the large sums of money that they were paid to offer respectability to the scheme. But then by getting angry at them, maybe I am missing the point – this is the society we have created with influencers so important and a well known name offering us reassurance and they were just taking the easy cash. Just another job. The real problem here though was, of course, David Ames.
What I can’t understand about him was that he was clearly a talented salesman so why not just go legit? To be fair to him – and it pains me to do so – maybe this is how it all started, but his poor business skills meant that the whole scheme quickly got out of control, including the issues with his builders and other advisors. But how could he keep on selling when he knew that the scheme was finished and that investors would literally never see a penny of the money that had been invested? There is a saying that always guides me in my working life, and that is spending every penny as if it is my own. Sadly, Ames was a million miles from this, just destroying dreams whilst he and his family lived in luxury. Paying his wife and son £10k a month plus all the other money they took from the business. Must be nice.
Of course, what we have heard about the lack of contracts with the builder is just shocking – not even the basics were in place. Did they rip him off? Was he ripped off by other advisors? He clearly thinks so and who knows what is the reality there. In fact, to me it doesn’t really matter. What does matter is the innocent people persuaded to part with their money and the real lives destroyed. I wonder if David Ames even thinks about this every day as he sits in his cell reflecting on the last 20 years. Something tells me that he isn’t too interested in the people who lost money in his fraud, I reckon he is much too busy feeling sorry for himself and his perceived bad luck. Don’t you?
This story was featured in episode 414 of the UK True Crime podcast.
The following sources were used:
https://www.apjsolicitors.co.uk/harlequin-property-scheme-the-harlequin-group/
https://www.bbc.co.uk/news/uk-england-essex-63058237
https://www.echo-news.co.uk/news/22958444.basildon-businessman-jailed-harlequin-resorts-scam/
https://www.sfo.gov.uk/2017/02/17/sfo-charges-david-ames-harlequin-group/
https://www.moneymarketing.co.uk/news/harlequin-chairmans-son-jailed-for-3-years-for-1-6m-fraud/
https://www.kingsleynapley.co.uk/insights/blogs/criminal-law-blog/fraud-case-roundup
https://www.ttgmedia.com/news/ex-travel-boss-guilty-of-226m-property-investment-scam-35748