Three directors who liberated just under £12m worth of pension savings have been disqualified for a total of 34 years for misleading investors over a period of 30 months.
Kevin Kirkwood was handed a 10-year ban, while Gary Quillan and Gregory Garrett were both given 12-year disqualification orders on 18 September at the High Court in Manchester.
The court heard that the two firms involved - Liverpool-based KJK Investments and Windermere-based G Loans - operated a ‘pension liberation scheme' allowing savers to access pension benefits before the age of 55.
Some 209 individuals were offered loans by G Loans on the condition that they simultaneously invested their existing pension in KJK Investments shares - the value of that investment being typically twice the value of the loan they received.
KJK Investments advertised a potential 6% annual return on the investment and it was intended that the client's pension would be used to repay the loan upon retirement.
The court heard that KJK Investments loaned roughly half of this money to G Loans, on uncommercial terms, to enable it to make the funds available to members.
KJK Investments used the remaining funds received through the scheme on sales commissions, worth £900,000, and director salaries of just under £500,000 as well as making loans to other companies on uncommercial terms.
The victims also faced charges of up to 55% - the maximum member tax charge from HM Revenue and Customs for taking out a pension before the legal withdrawal age.
District judge Araba Obodai said the directors had "deliberately caused the companies to obscure the relationship they had with each other" and called the scheme a "house of cards".
On becoming aware of the scheme, the Insolvency Service undertook a confidential investigation that resulted in both companies being wound up in the public interest in April 2015 following a petition to the court.
Chief investigator Alex Deane said: "None of the directors expressed any real regret for deliberately misleading people who were mainly small pension investors, and who were targeted because they were unable to get credit and required cash.
"Pension liberation is being widely promoted as an easy way of gaining early access to pension savings. Any schemes offering such benefits should be viewed with caution and independent financial advice should always be sought before entering into such a scheme."
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Pension scams are not just about the money lost, but the lives devastated, says Nicola Parish, so the industry must unite to defeat this scourge.