TWO men are beginning lengthy jail sentences for their part in an estimated £8million investment fraud likened to a religion and its brainwashed victims “believers”.
Lawrence Wheeler, who was jailed for nine years, was pictured with gems and precious metals he had bought from the fraud proceeds and was said to have gallivanted around the world living the high life in hotels.
His son and right-hand man James Wheeler - who received an eight year prison term - was accused by Judge Sean Morris of a “nauseating and slippery performance” when he took the witness stand during his three week trial, having denied fraud and money laundering.
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He told investors that his status as a Jehovah’s Witness meant he was unable to break the law, in an effort to win their trust.
Teesside Crown Court heard how many of the 350 victims were elderly and had been deliberately targeted.
Some had since died with the stress of the County Durham-based fraud having contributed to their ill health, and others had lost homes and life savings.
A third man the Crown said was involved, Anthony Kemp, is currently serving a prison sentence in New Zealand for a separate but similar fraud, but is expected to be extradited back to the UK to stand trial when he is released.
The con began in 2001 when Wheeler Snr and Kemp were introduced to a network of people interested in so-called “get rich quick” schemes.
Victims were then recruited to what was effectively a pyramid or ‘Ponzi’ scheme and told they could get access to high yielding investments abroad.
When that ended pressure tactics and deception were used to get victims to make payments in anticipation of what prosecutor Mark Giuliani said were “ludicrous returns”. In 2006 it was claimed an interest fund from the investments amounted to £3.3bn.
Mr Giuliani said various excuses were also made to explain why no money was being paid with Lawrence Wheeler at one stage claiming couriers were bringing sixty million dollars from abroad in a suitcase which had been lost.
When people complained Wheeler Snr, who used fake banking documents and guarantees, sent threatening e-mails, saying he would “send in the heavies”.
They were also blackmailed into silence and repeatedly told that if they went to the authorities they would not get a penny.
Mr Giuliani said even after his arrest in 2013 Lawrence Wheeler carried on his fraudulent dealings, claiming to be looking at oil deals abroad and asking people to send money via PayPal.
Asked by Judge Morris where the cash had gone, Mr Giuliani said it was believed it had been siphoned off to West Africa.
Unlike his 71-year-old father, who admitted conspiracy to defraud on the eve of his trial, James Wheeler denied fraud and money laundering, but was found guilty by a jury on both counts.
He allowed his bank accounts to be used to launder the cash received. A picture framing shop, in Spennymoor managed by James Wheeler and his wife Gillian – who was cleared of the same charges – was used to co-ordinate the con.
Mr Giuliani read out several victim impact statements describing the “devastating” effects the fraud had.
He said: “Some of the victims had responsible jobs, company managing directors, solicitors, accountants, people who should have known better.”
Stephen Constantine, for Wheeler Snr, of Ramsay Street, Tursdale, County Durham, said he was a man of advancing years and hitherto good character.
Tom Mitchell, for 46-year-old James Wheeler, of Church Lane, Ferryhill, said: “It was as much a religion as a fraud. The believers – those were elderly and sophisticated investors.”
Mr Mitchell said his client’s culpability only went to back to 2007, adding: “This was not James Wheeler’s fraud. But for his father’s actions son would not be where he is now.”
Sentencing the defendants, Judge Morris said Wheeler Snr was the “villain of the piece” and a devious fraudster.
He said his procrastination in the face of overwhelming evidence led to other members of his family being arrested and also facing trial, before the cases against them were discontinued.
The judge said James Wheeler had been a willing and able partner in the fraud, funnelling funds abroad, and had also “chanced his arm with the jury and lost”.
He said: “You duped people you knew personally into schemes you must have known were nonsense.”
Judge Morris added: “Every single aggravating feature about fraud is apparent here. If there is a lesson to the public about get rich quick schemes, it is there is no way of getting rich quick other than winning the lottery.”
Investor didn’t have enough for funeral
LAWRENCE Wheeler and Anthony Kemp set up the ‘Presidents Club’ – effectively a secret membership scheme and even established what they described as an ethics committee to give legitimacy to their dealings.
Pensioner Ken Reid, who died of cancer in 2009 aged 69, became involved with the ethics committee, which was intended to be a conduit between the duo and investors.
Ken Reid, who died in 2009, was one of the victims of the investment fraud
His son Antony said Mr Reid, who himself lost thousands of pounds by investing in the scam, was duped into believing it was all legitimate.
He said: “There was not enough money to pay for his funeral, when he died he was heavily in debt.
“Even on his death bed he was still getting a barrage of calls on his mobile from people wanting to know where their money was.”
Mr Reid, from Leeds, said Wheeler Snr and Kemp promised to transfer £2,000 into his mother’s bank account in order to pay for his father’s funeral, but the money never arrived.
He said his father, a former college lecturer, had seen his good nature abused and the fraudsters’ actions had contributed to his ill health.
“He was a good, decent guy, but if you told him six and six was 13 he would believe you,” he said.
“They used him as a middleman. He was involved right to the end and worried about the whole thing.
“I am very angry. The sentences were not enough, Lawrence Wheeler should have got double that.
“They obviously thought they could get away with it, but they were wrong.”
Meanwhile, the wife of another victim – a financial advisor – who has since died said he had risked and lost everything, ending up £40,000 in debt.
She said in a statement: “He was brainwashed. To his dying day, he believed it was genuine.”
Team who led probe praised
JUDGE Sean Morris commended Detective Constable Helen Bell and police investigator Sheila Robinson, from Durham Police, for their investigation which led to the case being brought to court.
The investigation sifted through more than 7,500 individual items of paperwork with numerous victims being interviewed, some of whom did not want to talk to police.
DC Bell said: “It has been a difficult investigation. Some people found it too painful to talk and just wanted to put it behind them. Others still believed they were worth millions of pounds, even though they had lost everything, and refused to accept they had been defrauded.
“The biggest thing for me was the cruelty involved. These people waited and waited for 13 years for their money – and it never came.”
Proceeds of crime legislation will now be used in an effort to claw money back from Lawrence and James Wheeler – a hearing is due to be held in January next year.
But with no indication being given by either of where the money handed over by investors has gone, that is likely to be a difficult task.