A trustee of the Optimum Retirement Benefits Plan has been suspended by The Pensions Regulator (TPR) following the launch of a police investigation into a suspected liberation scam.
Announced today (20 June), Gordon Craig was suspended from his role as trustee while police continue their investigation, following a decision by the TPR's Determinations Panel which connected his involvement in what it believes to be pension liberation.
The regulator has also appointed Dalriada Trustees as an independent trustee to act in place of Craig and the other trustees of the scheme, resulting from concern that they had breached their duties.
In a statement, TPR said it was necessary to "protect other pension holders by preventing them from transferring their funds into the scheme".
Under section 4 of the Pensions Act 1995, TPR has the power to suspend a trustee who police are considering bringing criminal proceedings against for offences involving dishonesty or deception.
Section 7 also gives TPR the power to appoint an independent trustee to a pension scheme, while section 8 allows it to direct the independent trustee to exercise powers to the exclusion of the existing trustees.
From 2015, a total of £13.4m was transferred to Optimum Retirement Benefits Plan from the pension schemes of 288 people from 2015. Some were allegedly the result of cold calls persuading members to transfer their pensions.
After the members transferred their pensions to the scheme, they received loans for as much as 75% of their funds from companies linked to Craig. Introducers were also paid tens of thousands of pounds in fees while the remaining funds not paid out as loans were invested in high-risk, illiquid investments including gem-mining and olive oil processing.
Craig, an insolvency practitioner, paid himself nearly £500,000 from scheme funds in just 12 months.
The Determinations Panel noted that a number of people involved in the setting up or running of Optimum and linked schemes had been convicted of dishonesty offences. Two - Martin Dowd and Robert Winstanley - had been jailed for money-laundering while a third - Richard Jones - was convicted of the same crime and given a suspended prison sentence.
In its determination notice on the appointment of an independent trustee to the scheme, the panel said: "The permission of activity that appears to be pensions liberation strongly suggests that Craig, if he has the knowledge and skill of a pensions trustee, is not exercising it properly.
"Similarly, the highly illiquid and high-risk investments, several of which appear to have failed, is consistent only with Craig not having or exercising the necessary knowledge and skill."
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