Imperial Investments hit by FCA scam warning, bank account closure

Ponzi scheme Imperial Investments, which promises investors returns of 350% per year, has been listed as a scam firm by the Financial Conduct Authority.

I reviewed Imperial Investments back in April. Imperial claimed that investors could solve their rent and bills worries by investing with Imperial. I pointed out that in reality, Imperial Investments in a Ponzi scheme and the vast majority of its investors are guaranteed to lose money.

In what may be related news, Imperial Investments “co-founder” Dan Pugh revealed in a series of Facebook video updates that Imperial’s bank has closed its account, most likely having got wind that they were being used to run a Ponzi scheme.

In an update posted 18 August, Pugh hilariously claimed that Imperial’s bank account with Starling was shut down because Starling are going bankrupt. Drinking from a glass of dark liquid that he claims to be Red Bull, and sitting in front of a wardrobe of identical Imperial Investments polo shirts, Pugh says:

The next part is for anybody that is with Starling. What we think has happened with Starling, if you go onto Trustpilot and click “poor reviews”, you will see that in the past 2-4 weeks all of the reviews are the very same problem that me and Scott are up against right now. What we think and what Scott thinks as that they are going under, bankrupt, poof.

Now why we think this is because 1) they blocked our business account. The only reason they’re giving us is because £170,000 is apparently a lot of money. […] In what world is that a lot of money when it’s a business account and an investment fund? Secondly, we tried a test, Scott tried to move money from his personal account. Now they let him do this but today when he’s received a payment from – other things that we do – they blocked his account, his personal account, would you believe it? This is the second thing that makes us think they are going under.

“Scott” is Scott Wood, Imperial’s alleged Malaysia-based “co-founder” who is actually the sole owner of Imperial Investments’ corporate entity. If Wood actually exists, he keeps an extremely low profile. There is no public photo of him and Pugh fronts all Imperial’s Facebook updates.

In the world’s most pathetic attempt to start a bank run, Pugh advised all Imperial investors to withdraw any money they had from Starling, falsely claiming that if they went bankrupt it would take the FCA 3-4 years to compensate them. (The reality is that when an authorised deposit-taker goes under, compensation is paid by the FSCS within weeks.)

In the update Pugh falsely claims that Imperial Investments does not require FCA authorisation, despite running a collective investment scheme, because it doesn’t hold customer’s money in its own account. This is irrelevant to the definition of a collective investment scheme, which under UK law requires only a) that investors’ money is pooled and b) that investors do not exercise day-to-day control over their investment.

Pugh also revealed that in an attempt to circumvent the kind of anti-money laundering checks that caused Starling to give them the heave-ho, Imperial has set up a Malaysian shell company.

We are registering the company in Malaysia. The name of the company will be IIF Private Asia Limited. There are certain reasons we had to name it that, which are very long-winded, but nonetheless, it’s still Imperial. It will be classed as a subsidiary under our Companies House here in the UK.

Whether Imperial has succeeded in its attempt to set up new banking channels in Malaysia is unclear. At time of writing Pugh’s “get your money out of Starling because they don’t like Ponzi schemes” update is the most recent on Facebook. There has been no update regarding the FCA warning.

Malaysia is not well known for its financial regulation, but nonetheless Malaysian bankers speak English and are perfectly capable of reading FCA scam warnings.