Pyramid Scheme Crumbles under Insolvency Service Scrutiny

The leader of an unscrupulous pyramid scheme which left investors over half a million pounds out of pocket has been handed a 12-year bankruptcy restriction.

The leader of an unscrupulous pyramid scheme which left investors over half a million pounds out of pocket has been handed a 12-year bankruptcy restriction for his part in the deception.

Mr Graham Bradbury of Sheffield, South Yorkshire, has seen his pyramid scheme crumble following an Insolvency Service investigation. Mr Bradbury is now bound by bankruptcy restrictions for the next 12 years. The restrictions state that:

  • Mr Bradbury cannot act as a director of a company without permission from the court;
  • He may not carry on business in a different name from the name in which he was made bankrupt;
  • He must disclose the bankruptcy restriction to anyone he wishes to do businesses with;
  • He must disclose his status to a credit provider in order to access credit of more than £500.

A failure to safeguard investors’ deposits

The investigation into the scheme found that Mr Bradbury had carried out unauthorised regulated activities that contravened Section 19 and 21 of the Financial Services and Markets Act 2000. Mr Bradbury was neither exempt from or authorised to carryout such activities.

It was revealed that Mr Bradbury operated Cherries Private Members Club with the purported aim of “carrying the business of a private members’ Club and offering facilities and schemes run for the financial betterment of its members…”

The Cherries Club offered its members four separate schemes, namely: Cherries Networking; Cherries Laying Service; Diamond Betting Service and Football Betting Service. To support the four schemes, the club had three separate websites.

A number of spurious claims were made across the three websites. The website claimed that average returns across the range of Cherries’ services were between 3 and 10 percent per month, tax-free.

The website blurb claimed that the Cherries Club was: “A simple alternative investment vehicle almost anyone can make money from… Plus you can make a residual income via a highly profitable turnkey business model.”

The website also gave investors the opportunity to invest a minimum of £300 and a maximum of £30,000 in each of the club’s betting services.

The investigation found that…
An investigation by the Financial Conduct Authority (FCA) found that the Cherries Club’s claims were clearly incorrect.

The regulator also uncovered details which stated: “Our funds are held in the segregated Cherries Client Account at HSBC Bank; High Street; Sheffield; S1 4HH.

“Monies held in this account remain at all times the property of our clients and will neither be used in any other way by Cherries nor form any part of the assets of Cherries promotions.

However, when the FCA looked more closely at these claims, they found no such account existed.

The Insolvency Service investigation also found that Mr Bradbury failed to safeguard investors’ deposits to the tune of at least £521,562.

Welcoming the investigation’s findings, a spokesperson for the Insolvency Service’s Public Interest Unit, said: “The Insolvency Service always looks very closely at individuals who act irresponsibly with other people’s hard-earned savings and takes action where wrongdoing is uncovered.

“We are grateful for the assistance of the Financial Conduct Authority in completing our investigations.”