Two Jailed for £3.7million Pension Liberation Fraud

Two men who were involved in duping people out of more than £3.7million by claiming to give them early access to their pension pots have been jailed following an investigation by the Yorkshire and Humber Regional Organised Crime Unit (YHROCU).

The fraudsters set up an elaborate scam, known as pension liberation, in order to steal the pension savings of 74 victims.

Misleading brochures, data sheets and other marketing materials were professionally produced so that they could con people into believing they had a tax-free method of getting the cash out of pension pots early.

They also offered victims cashback as an incentive to invest pensions with them instead.

But not only was this investment false, it also defrauded HM Revenue and Customs out of £700,000 in tax owed.

Mohammed Bashforth, aged 62, of Spen Lane, Gomersal, and formerly of Wakefield and Daniel Giles, aged 51, of Jacob Drive, Coventry, and Kevin Phelan, aged 62, of Gillygooly Road, Omagh, Northern Ireland, were found guilty of conspiracy to commit fraud by false representation, and conspiracy to cheat the public revenue at Leeds Crown Court in August.

The offences took place between 2013 and 2015.

The fraudsters directed their operation from office premises in Wakefield and Leeds.

During a lengthy trial held last year at Leeds Crown Court, jurors heard the defendants together devised, marketed and operated a scheme that falsely promised investors early tax-free access to their pension funds, and that their pension funds would be invested safely for the future.

They deliberately hid the fact that early access to pensions in this way was subject to tax of up to 55 per cent.

Investors’ money was stolen and hidden behind a number of completely bogus transactions.

The court was told that all three knew perfectly well that by encouraging investors to access their pensions early that the investors would be liable to pay tax and that tax would not be paid.

The schemes were devised by Giles and Phelan and they were operated by Bashforth.

They employed a network of ‘introducers’ to mislead investors into transferring their pensions into their control.

They also knew and intended that their actions would cause loss to the taxpayer.

By telling ‘detailed and careful’ lies to legitimate pension companies, they managed to get customers’ money into their own hands without arousing suspicion.

Between 17th December 2013 and 8th December 2014, 74 victims were persuaded to transfer their pensions, in full or in part, into bank accounts controlled by the Giles, Phelan and Bashforth.

The total amount transferred was £3,701,813.92.

During the trial, the court also heard from further would-be victims who had decided not to transfer money to the defendants.

Appearing before Leeds Crown Court for sentencing today (9/1/26)

• Giles, who also admitted a further separate tax evasion charge relating to over £1m in unpaid personal tax dating between April 2008 and April 2014, was sentenced to 11 years. He was also disqualified from being a company director for 12 years.
• Bashforth was jailed for five years. He was also disqualified from being a company director for five years.
• Phelan will be sentenced at a later date.

The investigation was conducted by the Yorkshire and Humber Regional Economic Crime Unit, part of the YHROCU.

Speaking after the sentencing, Ramona Senior, head of the Yorkshire and Humber Regional Organised Crime Unit said: “This was a complex and protracted investigation, but I am pleased that the jury were able to see that the intentions of those convicted were dishonest.

“Driven by greed, they sought access to pension holders’ cash and treated the funds they obtained as pots of money which they dipped into at will, with no intention to properly invest the funds or highlight the tax liabilities created.

“They had no care or concern as to the financial hardship this would cause victims.”

Further action will now be taken under the Proceeds of Crime Act.

Anthony Burke, Deputy Director, Wealthy and Mid-sized Business Compliance, at HM Revenue and Customs, said:

"This police investigation underlines the serious consequences for those who defraud people of their pension savings through so-called liberation schemes.

“Anyone considering transferring their pension should seek professional advice first and be wary of schemes promising early access to pension funds, as these often result in significant tax charges.

“Search 'pension schemes and unauthorised payments' on GOV.UK for more information."

 

What is Pension Liberation Fraud?

Criminals are targeting individuals with unexpected offers through websites, phone calls, and social media, promising unbeatable investments and upfront cash payments. These scams can have devastating financial consequences, especially for those nearing retirement.

Understanding Pension Liberation Fraud:

Pension liberation fraud involves scammers convincing individuals to access their pension funds before the legal age of 55, often with the promise of high returns or immediate cash.

However, accessing your pension early can result in a tax penalty of up to 55 per cent, significantly reducing your retirement savings.

Key Points to Remember:

Reject Unexpected Offers: It's illegal to cold call about pensions in the UK. If you receive an unsolicited offer, be cautious. Scammers often use high-pressure tactics to rush you into making decisions.

Avoid Rush Decisions: Take your time to make informed choices. Don't be pressured into making quick decisions. Consult with a trusted financial advisor before making any changes to your pension arrangements.

Verify Firms: Always check the status of any firm with the Financial Conduct Authority (FCA) before making changes to your pension arrangements. You can call the FCA helpline at 0800 111 6768 or visit their website for more information.

Be Cautious of High Returns: Promises of 'guaranteed', 'fixed', or 'secured' high returns are often too good to be true and come with significant risks. High returns are usually associated with high risk, and you could end up losing your entire pension savings.

Protecting Your Pension:

Stay Informed: Educate yourself about common scams and how to recognise them. The more you know, the better equipped you'll be to protect your pension.

Report Suspicious Activity: If you suspect you've been targeted by a scam, report it immediately to Report Fraud (formerly Action Fraud). Visit https://www.reportfraud.police.uk/pension-scams/ for more information and to file a report.

Consult Professionals: Always seek advice from a qualified financial advisor before making any changes to your pension.