Boss of luxury hotel development company found guilty of £226m fraud

By Linsey McNeill
11/08/2022
Home » Boss of luxury hotel development company found guilty of £226m fraud

David Ames, Chairman of Halequin Group, will be sentenced next month after he was convicted of a £226m property scam

A jury at Southwark Crown Court found the 70-year-old guilty of two counts of fraud by abuse of position.

Ames offered no evidence in his defence.

An investigation by the Serious Fraud Office (SFO) found he had deceived more than 8,000 UK investors, who thought they were securing a share of hotels and resorts in the Caribbean but the properties were never built.

The SFO said Harlequin’s business model relied on investors paying a 30% deposit to buy an off-plan villa or hotel room, half of which went toward fees for Harlequin and relevant salespeople, while Harlequin put the remaining 15% towards construction.

Investors were fraudulently told that the building of the properties would be further funded by external financial backing.

With no additional source of funding, three properties needed to be purchased to finance just one of the luxury accommodation units.

This led to the exponential expansion of the scheme, the diversion of investor money between resorts and ultimately a funding shortfall of over £1.2 billion by 2012 – seven years after Ames launched the scheme.

By this point, an expert accountant told Southwark Crown Court that investors were exposed to a near 100% risk of loss, which Ames did not contest. 

The SFO investigation revealed that by the time it went into administration in 2013, Harlequin had sold around 9,000 property units to investors, with less than 200 ever actually being constructed.

Throughout the entire eight-year project, only 28 of over 8,000 investors ever completed on a purchase, leaving well over 99% with no return on their investment.

The Harlequin Group ultimately lost a total of £398 million of investor funds.

Several thousand victims lost pensions and life savings to the fraud, while Ames enriched himself and his family by £6.2 million. The Harlequin companies were family businesses, employing at certain times both David Ames’ wife and his son, who was paid £10,000 a month. 

Ames called himself Chairman of Harlequin, having been temporarily barred from serving as a company director due to a previous bankruptcy.

The SFO uncovered how he repeatedly ignored warnings that the business was likely insolvent, while concealing this reality and continuing to sell more units to investors.

Ames sacked associates who raised the alarm, and on one occasion told colleagues that concerned investors needed ‘to be put in their place’ to avoid attracting ‘bad press’.

Ames made publicity a key priority, promising celebrity-sponsored tennis, golf and football academies with marketing videos in which he personally explained his vision for the resorts.

Predicting major tourism development opportunities, he even secured the endorsement of politicians in the region, including the Prime Ministers of Barbados, St Lucia, and St Vincent and the Grenadines.

Lisa Osofsky, Director, Serious Fraud Office, said: “David Ames committed fraud on a huge scale, knowingly exposing thousands of UK investors to losses totalling hundreds of millions of pounds. 

“Diligent SFO investigators reviewed millions of documents, traced over 8,000 investor deposits and called on more than 25 witnesses, to expose the full extent of Ames’ deception.” 

Mr Ames will be sentenced in September 2022.

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