Massive Costa Blanca investment fraud loses UK expat retirees some 25 million

Published:  5 Aug at 6 PM
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In spite of endless warnings by authorities and online advice sites, pensioners in the Costa del Sol have lost millions to yet another investment scam.

Continental Wealth Management, now defunct, was using the familiar technique of shovelling expat retirees’ life savings into high-risk investments paying massive commissions to dodgy IFAs operating from a high-end office in Denia. Hundreds of British pensioners in Spain, Portugal, Italy and France have now lost a total of up to £25 million, with little or no chance of getting any of their money back. The scam is similar to the infamous LMIM scandal, investments in which were being pushed by expat IFAs in Asia right up until it collapsed, losing Western retirees an equally massive amount.

This time, UK retirees in Europe, all of whom were simply looking for a safe overseas home for their hard-earned pensions cash, have all been swindled by British IFAs living in favourite European retirement hubs. One 86-year old British retiree living in Denia told the media she’d allowed her husband to take care of all financial matters, although she later became aware he was in the early stages of dementia. He was sending regular quarterly payments of £1200 to the crooks, who threatened her when she began asking for receipts. The threats became worse when she stopped the payments as her husband was in a nursing home, with an IFA representing Continental attempting to force her into signing forms authorising even higher fees. All told, the couple lost around £600,000 over the years, during which time her husband passed away and his widow attempted suicide.

The fraudsters opened for business in Spain in 2008, attracting British expatriates due to its use of British IFAs in order to put victims’ minds at rest. Based in the resort’s luxury Marriot Hotel, the firm specialised in cold-calling, advertising in the English language media and soliciting recommendations from expat clients. Using QROPS as the perfect solution for expats, the crooks then used recognised multinational banks to reroute monies to ‘structured notes’ – complicated, high risk investments meant only for professionals and paying massive commissions of up to 8 per cent to IFAs. These instruments offer no protection against losing the entire amount invested.

The majority of investors have lost at least 50 per cent up to 100 per cent if the total invested, and remaining funds are now locked up and subject to huge exit fees. It would seem that Continental was acting as a representative of Inter-Alliance WorldNet, supposedly registered in Cyprus according to the scammers, but not according to the Cypriot financial authority, which states the firm was not only unregistered but was fined by the authority for touting investment services whilst unregistered. The authority admitted complaints had been received about the firm, mostly from expat retirees and all concerning considerable amounts of cash invested.

A number of pensioners who’ve lost everything due to the scam have now banded together to fight for their money, and have filed a criminal complaint in the local court in an attempt to get justice. Many of those affected tell of forged or copy/pasted signatures, offers to fill in pre-signed forms and the use of offshore insurance giants such as Old Mutual International, which has refused to comment on its involvement as did Friends Provident International when the LMIM scandal broke.
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