UK authorities have sentenced two men to a total of 6 years in jail for defrauding hundreds of pension holders by coercing them to transfer their pensions into Self-Invested Personal Pension (SIPPS) and then using the money for personal benefits.
The authorities began their investigation in 2011 after receiving a tip from the Financial Conduct Authority (FCA). The UK Metropolitan police identified and contacted over 250 victims of a scheme, called ‘PCD Wealth & Pension Management’ (PCD), that the convicts started in 2007. The scheme aimed to transfer clients’ pensions to investment funds. In furtherance of the scheme, the convicts cold-called and convinced pension holders to transfer their pensions into a SIPP that they controlled. They directed the pension funds received from the victims into investment funds that were high-risk and self-serving, through high commission payments. Importantly, PCD had no authorization to conduct pension business in the UK.
The scheme led to victims losing between £10,000 ($11,676) to £200,000 ($233,526) of their pensions.
Source: Metropolitan Police, UK