Providence offered supposedly asset-backed bonds paying 8.25% per annum. The scheme collapsed in 2016 with total losses to investors.
Jersey financial adviser Christopher Paul Byrne was convicted of fraud last Friday for recommending that his clients invest in Providence funds.
Byrne told his clients that the funds were low-risk when they were anything but, and Jersey prosecutors successfully convinced the judge that this went beyond misselling into outright fraud. Byrne also failed to tell investors that his firm, Lumiere Wealth, was owned by Providence; a blatant conflict of interest.
Des Jeffrey, who “reluctantly” became a Lumiere director after Providence collapsed, told the court that most of the investors whom Lumiere convinced to invest in Providence were far from sophisticated.
Once he began meeting the clients who had been affected, he realised most were not seasoned investors.
Among those who lost substantial sums, the court was told, were a 79-year-old partially sighted woman and a father of four who was a first-time investor.
‘Once I had actually met them I could see quite a few were not what I would call sophisticated investors,’ Mr Jeffrey said. ‘From a professional perspective, it was a high percentage of a person’s wealth that would have gone to Providence.’
Byrne also conned an elderly, near-blind woman into signing a £1 million unsecured personal loan to him under the pretense that it was an investment application form.
A date for sentencing was due to be set yesterday.