News Business Crime & Financial Services 15th Jul 2015

Operation Cotton – Allegation of Conspiracy to Defraud

Christopher Gillespie and Vivienne Tanchel successfully defended Mr F in an allegation of conspiracy to defraud in the first criminal prosecution brought by the Financial Conduct Authority for land-banking schemes.

The FCA prosecuted 8 defendants for offences relating to the fraudulent sale of land to members of the public using so-called ‘boiler room’ tactics.

Mr F, Christopher and Vivienne’s client, was the only defendant unanimously acquitted by the jury after a three month trial at Southwark Crown Court.

The FCA gathered evidence against the defendants, through ‘Operation Cotton’, one of the largest investigations ever carried out by the watchdog, involving the City of London Police and the Insolvency Service, and some of the victims.

Between July 2008 and November 2011 it was alleged that the defendants were involved in the operation of an unauthorised collective investment scheme through three companies.

Salesmen for the companies cold-called potential investors to sell them agricultural land that the companies had bought for minimal amounts as well as land the companies did not own. Using sales scripts, misleading promotional material, and high-pressure sales techniques they lied about the current and future value of the land. People were persuaded to purchase land at a vastly inflated price, on the false promise of a substantial profit.

The scheme extracted at least £4.3 million from investors and none of them have seen a return.

The investigation, Operation Cotton, is one of the largest undertaken by the FCA to date and involved the use of the FCA’s civil powers against two of the companies through which the scheme operated.

Christopher and Vivienne were instructed by Lee Adams of Hughmans Solicitors.

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