The administrators of the collapsed forex Ponzi Hudspiths Limited have released their first full report after being appointed.
Hudspiths launched in 2015 and promised to pay investors 5% per month while paying its introducers 2% per month. There is no evidence that it ever had any means to generate returns of 7% per month (after costs) from its capital (because there’s no such thing), meaning that Hudspiths constituted a Ponzi scheme.
It collapsed in 2018. Investors defeated an attempt by its directors to cover their tracks by putting the company into voluntary liquidation; instead the company was put into compulsory liquidation in 2019 with the aim of having a better chance of finding where the money went.
Contrary to sex shop owner and Hudspiths director’s Karl Lubienicki, who claimed to the Daily Mail “There’s no money missing. You can’t hide £50million” and that only £7.5 million was outstanding to Hudpsiths creditors, the administrators report that £85 million of claims have been received from 153 creditors. In the original Statement of Affairs, there were only 109 creditors with debts totalling £41 million.
Some of the increase to £85 million might result from investors trying to include their imaginary Ponzi returns in their debts, but the number of creditor claims ballooning by 40% seems likely to be a factor as well.
The administrators have taken legal action against the directors (Lubienicki and Lancelot Hudspith) alleging misappropriate of funds.
We also took immediate legal action against the former directors of the company to protect the interest of creditors. The claim relates to monies which appear to have been misappropriated by the former directors and is based on the very little information we have been provided in the books and records of the company.
So how does 40 / 50 / 85 million not disappear?
The directors’ original statement of affairs detailed the following assets:
- A £4.4 million investment into ATFK Training Ltd, a shell company which dissolved without filing accounts
- A £1.9 million investment into an unspecified company, and £500,000 invested in various entities; however these investments were made in the name of one of the directors and not by the company itself
- £580,000 in a trading account; however when the administrators opened the box, it had been cleared out
- £59,600 of cash in the bank, which has been recovered
- Some trivial amounts in machinery, fixtures and fittings
These of course only total £7 million odd even if they were recovered – which of course isn’t going to happen. Where the other tens of millions invested in Hudspiths has been not-hidden is currently unclear.