How forestry scam drained pensions to buy 'flash cars'

Staff at Ethical Forestry always knew when their bosses were around.

Even though the business was on the top floor of a Bournemouth office block there was no mistaking their arrival.

You could hear one of their "top of the range, flash cars" roaring into the parking area three storeys below, according to former staff member Susan Cox.

And "flash cars" they had a plenty - between them, company founder Matthew Pickard and fellow directors Stephen Greenaway and Paul Laver bought at least 45.

They included multiple Ferraris and Porches, a McLaren and Maserati.

The problem was the money for their luxury lifestyle had come from thousands of people's pension pots.

Three thousand of them had been persuaded to switch their funds from safe, but not exactly exciting, work-place schemes and instead invest them in planting trees in Costa Rica.

On the face of it, this seemed doubly rewarding - not only were they promised a healthy financial return, but they were also helping the environment.

Another investor who met Pickard on a visit to the Dorset HQ was told he was a "Christian man who wanted to open schools for children in the part of Costa Rica where the trees were being planted".

But investors were being hoodwinked.

After getting called and offered a free pension review by staff at the firm, rather than getting what they thought was independent advice, they were recommended to move their funds to Ethical Forestry by another employee, sitting in the same building.

Once caught in what the Serious Fraud Office (SFO) called a "closed loop", within hours papers would be biked around to their home, which once signed allowed the business to drain their funds.

But to make matters worse, Ethical Forestry's directors now saw the money as their own personal piggy bank, which they used to fund their lavish lifestyles, all before a single tree had been harvested.

They used a tax avoidance scheme to extract the cash, but soon financial regulators were focussing their attention on such schemes.

HMRC also wrote to them questioning the validity of their plan to avoid tax.

"It did feel that as the regulatory net started to tighten around the directors, that's when the spending really increased," said SFO prosecutor Emma Zymanczyk.

Her office had dealt with bigger cases of fraud, she said, but what marked this one out was that the almost £70m that was lost when the firm collapsed in 2015, had come from 3,000 small investors.

Greenaway, a former martial arts teacher, and Laver, his one-time flatmate, were both painted by their defence teams as playing a supporting role to Pickard.

Prosecutors said whatever they had claimed now, all shared in the profits of the fraud.

Andrea Panayi, who had come to court from the home she shares with disabled husband Paul in Middlewich in Cheshire, does not distinguish between them.

She lost £125,000 from the pension pot, that she had built up over 20 years working at Barclays Bank.

"How can you treat human beings like that? How can you do it, living off other people like that?" she said.

"You look at them and they're quite pathetic, but then they don't have things written on their foreheads to tell you that they're pure evil, but then they really are. All of them."

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