Carlauren Group is not having an easy time lately. Added to its failure to raise more than a few thousand from its C-Coin care home cryptocurrency, it was temporarily unable to pay staff at the care home from which it was busy evicting elderly residents, and has also had to put plans to build an Ibiza-style beach club on the Isle of Wight on hold.

Last year Carlauren was projecting returns up to 14% per year from investing in its care home rooms.

This year Carlauren pivoted into cryptocurrency, launching its “C-Coins” which it claimed would increase in value by 170% as soon as investors had ploughed in £35 million.

While CEO Sean Murray was trying to reinvent himself as the Satoshi Nakamoto of dementia care, however, Carlauren appears to have taken its eye off the ball at its care homes and construction projects.

Tyndale House closure

A couple of weeks ago Carlauren closed its Tyndale House care facility in Somerset, as reported by the BBC.

Residents, many of which were elderly and frail, were told they had just 28 days to find alternative accommodation.

Resident Julia Hart said: “It’s disgraceful, and really a bit daunting to say the least.

“I sold my house to come into Tyndale.”

Another resident, Marion Kemble, added: “I’m worried sick. I don’t know where I’m going to go.

“I’ve never cried so much in all my life because I’m scared where I’m going to end up.”

Residents were not the only one in distress. At the time, care home staff had not been paid for a month, although many had continued to work unpaid out of concern for the residents.

In a video posted publicly on the “Sandown Hub” Facebook group on 2 July, angry care home staff confronted Carlauren Chief Operations Officer Andrew Jamieson about the failure to pay their wages. The encounter was filmed with Jamieson’s consent, which he gives around halfway through the video.

Jamieson states

There is no money in the banks. There is nothing, I’m telling you. There will be money tomorrow. Because what happens is all the electronic money that is gathered from the weekend in the hotels is paid into the bank on Wednesday.

Staff naturally question why Carlauren is running itself so close to the wire.

– How can a big company like this not have any money?

It doesn’t have any money. I’m telling you now. I’ve raided Jets’ money…

– It’s gone bust?

I’ve taken a load of money out of Jets [Brev: Presumably Jets Bournemouth, acquired by Carlauren in October 2018] which is another company we have, I’ve taken money out of the television company that’s come in, I have…

– So why haven’t we been paid?

We haven’t got the money.

– Where’s the money gone?

We took it. It’s all gone.

– Who took it?

It’s been used for suppliers…

– But the suppliers haven’t been paid! Not at our care home they ain’t…

Would you listen? There’s six winding up orders…

https://www.facebook.com/SandownHUB/videos/497283954410935/

The back and forth peters out at this point as Jamieson once again reassures the staff they will be paid once Carlauren can shuffle across the takings from its hotels.

4 minutes into the video, Jamieson attempts to brings the meeting to a close by dropping a “my mum’s got 2 or 3 days left to live” dead cat on the table.

Said dead cat naturally takes the wind out of the staff’s sails, but before the meeting concludes, one staff member asks where Carlauren CEO Sean Murray is.

Jamieson states

Sean Murray is down south in a court… We have got 8 winding up orders, do you know what that means? All gone, all gone, all gone… unless we can get a third party investor into this company.

A staff member asks whether it is plausible that Carlauren can obtain further investment, at which point Jamieson winds up the meeting.

On Wednesday 3 July, according to the BBC, all the staff were indeed paid just as Jamieson promised. All the residents have been moved into new homes.

Ibiza-style beach resort

Carlauren was building a beach club and hotel in Sandown, Isle of Wight.

In early May 2019 it was hailed as “the first beach club of its type in the UK” with “indoor and alfresco dining in the Terrace restaurant, with local seafood, a cocktail bar, a swimming pool with DJ area, plus a roped-off section of Sandown’s beach – complete with sunbeds and a beach bar.”

Carlauren Marketing Director Ana Lucia told The Caterer:

Think cool Ibiza party – that’s the crowd we want to reach.

The company is moving into high-end hospitality.

In late May, the project was abruptly postponed, and a launch party that had been planned for 1 June was cancelled, after structural issues with the building were discovered.

According to onthewight.com, an enforcement officer from the Isle of Wight council is now looking into the derelict state of Carlauren’s properties. Specifically Ocean Hotel (which Carlauren planned to turn into a care resort) and King’s House (the Ibiza-style beach club).

Councillor Debbie Andre stated:

“I’m disappointed that once again the town of Sandown suffers through irresponsible developers.

“I am very frustrated and concerned that we have another prime site that has actually been left in a much worse state.

“It is heart-breaking to be honest.”

Carlauren stated to the local press:

Carlauren understands that the area does not look aesthetically pleasing and this may cause distress to local residents.

Their patience is appreciated while we come to a resolution which will include, once able to return to site, clearing the debris.

Last Sunday the admin of the Sandown Hub Facebook group posted a picture of a large amount of bedding and furniture stacked up outside another Carlauren property, Parkbury Hotel, also known as “The Winchester”.

It has to be a fire and vermin risk, especially in this hot, dry weather. Feeling concerned as it’s right next to The Bay Primary School.

Environmental officers have been informed.

Where does this leave investors?

In a brochure issued by Carlauren last year, Carlauren claimed that it offered a profitable investment without “great risk”.

Real estate, despite the ever-fluctuating economy, continues to be a profitable investment.

In most cases, great investment comes with great risk; property however, is one of the few to dispel that myth. Putting your hard-earned wealth into land proves a wise investment time and time again, which is why we at Carlauren are extending an invitation to those who wish to invest in what is not only luxury resort and exceptional residential and care service, but also a case of prestigious real estate.

“Exceptional care service” and “prestigious real estate” appears to have actually meant distressed care home residents, staff paid late, and abandoned building sites full of crap.

The BBC’s Rory Cellan-Jones has been passed an investor newsletter which confirms that Carlauren’s care subsidiary has closed, having made losses of over £700,000 in two years, and that Tyndale House is being converted into a hotel.

According to Cellan-Jones, investors have been told that their returns will be unilaterally reduced by Carlauren, although this will be temporary.

The newsletter dismisses any adverse media coverage of Carlauren as the work of disgruntled staff.

This aggressive restructuring has had an adverse effect on the companies due to disgruntled staff contacting local media in order to express themselves.

We would ask that if and when any adverse information filters through the media channels to you, that you consider the material fruitful effect that our decisions have had and continue to have on our cash flow, which ultimately will benefit you, our clients.

If we hear anything regarding the winding up orders that Jamieson spoke about to the care home staff, we’ll let you know. A search in the Gazette for “Carlauren” returned no recent results at time of writing.

Sean Murray’s previous investment scheme; Detroit, distressed properties and dead rent collectors

Prior to founding Carlauren Care, Sean Murray was named as the man behind an investment scheme which sold buy-to-let investments in Detroit, projecting returns of up to 23% per year. The Guardian reported in 2014 on one investor’s story:

If Pat Njagi had any nagging doubts about her buy-to-let investment in Detroit, they were surely confirmed last February when she was told that she wouldn’t be receiving that month’s rent. The reason? Her rent collector had been shot, robbed, and left to die on a doorstep. […]

The company that actually supplied and managed her property – another UK-based operation that went under two names, New Orbit Funding and Detroit Advantage – did initially produce the promised $625 a month rent, minus $875 for what she was told was boiler maintenance.

“Our rent collector was shot at point blank range through the chest whilst out collecting rent late one night and whilst he led (sic) there dying, the rent money that he was carrying was stolen,” it read.

According to the Guardian, the Detroit properties were purchased from a company called Experience International. Another company which went under two names, New Orbit and Detroit Advantage, supplied and managed the Detroit properties.

Steve Worboys, who ran Experience International, denies any wrongdoing and says his firm only marketed the properties on New Orbit/Detroit Advantage’s behalf. He said for every one client who’d had problems, 10 were satisfied. We asked for names of happy clients but none were provided. He added that as soon as he became aware of his clients’ issues he had stopped offering properties in Detroit. He claimed he is also owed money by the man behind New Orbit, Sean Murray, and is as keen as anyone to see him investigated by the authorities. Murray could not be reached this week.

Companies House documents for New Orbit Funding Limited (later renamed as Advantage Properties and then Appy Brands before being dissolved in 2015) and Carlauren companies confirm via date of birth that New Orbit’s Sean Murray and Carlauren’s Sean Murray are one and the same.

In Carlauren’s investment literature, any reference in Sean Murray’s bio to New Orbit is conspicuous by its absence. “Following a number of successful product and system innovations spanning internet/mobile phone networks, software and property development, Sean founded the Carlauren Group in 2015.”

At least nobody got shot this time.

Sean Murray’s next investment scheme: hotel investments paying 10% per year

In December 2018 Carlauren Group purchased Heritage Hotels Limited from its previous owners Geoffrey and Emma Ede.

Heritage Hotels has now been repurposed as Carlauren’s latest unregulated investment scheme. The Heritage Hotels website (heritagehotelsuk.com) states

Become an owner
Invest in a luxury hotel in the UK and receive 10% return per year

Despite offering what is clearly an investment security in Heritage Hotels (the website makes clear elsewhere that there is a “guaranteed rental return” of “up to 10% per annum”, which makes this an investment in Heritage Hotels itself, not just the purchase of a property), Heritage Hotels has no authorisation from the FCA to solicit investment.

Previously we have reviewed Carlauren Group’s care home investments offering 10% per year and Carlauren’s C-Coin cryptocurrency investment, which Carlauren claims will jump in value by 170% as soon as they have sold £35 million worth (current sales as at April 2019: £3,290).

Carlauren hasn’t been particularly happy with my coverage, previously sending its former Head of Marketing into the comments to make vague accusations about “significant inaccuracies” without actually pointing any out.

Their unhappiness has now escalated into perjury.

The United States’ Digital Millennium Copyright Act allows the owners of copyrighted material to file takedown notices, asking Google or other web providers to remove the copyrighted material.

There is a way to abuse this process to trick Google into removing content from its web searches that you don’t want to be seen. This involves stealing the content from the owner, uploading it elsewhere, changing the date so that your stolen content appears to have been uploaded first, and then filing a takedown notice to Google, claiming that your stolen content is the original, and the real content is the copy.

This is exactly what Carlauren Group has done.

A filing uploaded to the Lumen database indicates that an “Isabel De La Iglesia” claimed (in Spanish) that my first two Carlauren blogs were written by her on 16 and 17 August 2017 on jhonsonconsultores.wordpress.com, and then stolen by me.

Needless to say this is not true and it is very possible that Isabel Church does not exist. Also needless to say, no legal proceedings have been received by us from Carlauren or “Isabel De La Iglesia” directly.

It would have been physically impossible for either blog to have been written in August 2017. Carlauren’s C-Coin did not exist at the time, and my first blog was based on Carlauren investment literature dated Spring 2018.

The stolen articles have now been removed from jhonsonconsultores.wordpress.com, although a fragment remains in Google’s cache. The blog now shows a bunch of Spanish-language articles that have also been ineptly stolen from elsewhere. For example, this blog (stolen from tenemosnoticias.com) pretends it was published in 2016, despite the fact that it includes Twitter quotes from 2018.

Filing a DMCA takedown notice requires the filer to swear that the content is theirs under penalty of perjury.

While I could easily file a counter-notice, I think I’d rather let this sorry episode stand as a warning to potential Carlauren Group investors.

Investors in Carlauren Group, their Care Home Group suites or C-Coins should think very carefully before investing in an unregulated company whose representatives engage in this kind of blatant deception.

Back in February I reviewed the Carlauren Group’s C-Coin cryptocurrency investment. C-Coin investors hand over £70 per C-Coin and can then use those C-Coins to either buy care services from Carlauren, or cash them out on an exchange. Carlauren claims investors in C-Coins can expect “an increase in their core value”.

The BBC’s technology correspondent Rory Cellan-Jones has recently reviewed the C-Coin as well. Unlike myself, he went as far as to join the exchange and buy a coin. There he found there was an “offer on market” to buy C-Coins for £189, despite investors being able to buy them at the offer price of £70. He attempted to buy a coin for £70 and immediately sell it for £189 but unsurprisingly failed to do so.

He then received an email inducing him to buy more C-Coins on the basis that they could be bought for £70 and sold at the “market price” of £189.

He was then told by Carlauren CEO Sean Murray that the £189 market price will only be available once all 500,000 C-Coins have been sold.

A market price at which nobody is able to buy or sell is not a market price in any shape or form.

The £189 market price is evidently set internally by Carlauren Group – nobody outside Carlauren would have offered £189 for a C-Coin when they can get them for £70. The implications of the C-Coin scheme allowing investors to cash out at a 170% profit once a certain level of investment has been reached are extremely disturbing. Cryptocurrencies with internally manipulated prices (as opposed to the price being set by supply and demand) rarely end well.

However, bearing in mind that Carlauren has so far managed to sell 47 C-Coins at the time of the BBC article (including the one bought by the journalist as a test), raising a grand total of £3,290 in Sterling, there seems little point dwelling on those implications.

If the present rate of 47 coins sold in six weeks continues, the last C-Coin will be sold at some point around the year 3,220 AD. At which point it is quite possible that elderly citizens will have bionic legs and brains and no need for care homes.

Movers and shakers news

Shortly after my review was published, the then Carlauren Group Marketing Director Seth Bishop commented on my review, accusing me of publishing “factual inaccuracies” “so significant I would need to write an entirely revised article”.

He failed to point out any such inaccuracies, other than claiming my reference to C-Coins being used to purchase care services was inaccurate on the basis that Carlauren’s care services are not care services because “Coins are used to pay for accommodation in resorts not care rooms in care homes. […] Our resort accommodation does offer care on demand.”

Seth Bishop left Carlauren Group a month later, according to his LinkedIn profile, perhaps sick of a job that involved making a fool of himself on blogs and claiming that a care resort offering care on demand to elderly residents isn’t a care service.

Bishop remains CEO of Accordiant Limited whose website says that it offers “Assured rental income – 10% fixed annual return on your care home investment”, which is the same rate of return that Carlauren offers on its unregulated investment in care home suites. Accordiant’s website suggests they are offering a service to investors who already hold care home studios rather than offering an investment itself.

Carlauren Group (aka The Care Home Group, whose care home investments offering fixed returns of 10% per year were reviewed here in April 2018) has entered the cryptocurrency arena with the launch of “C-Coins”.

How it works is as follows:

Investors and those wishing to buy Carlauren’s care home services hand real money over to Carlauren in exchange for tokens at a launch price of £70 per C-Coin. Members of the Carlauren Resorts programme have the right to buy a specified number of C-Coins at £70 depending on what tier of membership they join at.

Investors and members can either use their C-Coins to pay for Carlauren’s residential and care home services, sell them back to Carlauren at a “guaranteed” £63 per coin (90% of the launch price), or sell them on an internal exchange operated by Carlauren, known as the Carlauren Coin Exchange.

Going forward C-Coins will be the only method of payment accepted by Carlauren for its services.

C-Coins will be the only way to pay for Carlauren rooms, therefore the group expects a high demand and an increase of its core value. -Carlauren press release

Potential as an investment

The value of C-Coins is wholly dependent on the fortunes of Carlauren as a business.

Firstly, the “guarantee” to buy back C-Coins for £63 in fiat currency depends entirely on whether Carlauren has sufficient liquid funds to honour it.

Secondly, as long as new Carlauren members can get C-Coins for £70, they are unlikely to want to buy coins on the open market for more than this.

Thirdly, C-Coins have no underlying demand other than to purchase Carlauren residential and care services. This means Carlauren essentially sets the real value of the coins by determining how many C-Coins are required to buy a given Carlauren service.

The buy-back guarantee

In January 2019 Carlauren Group Limited filed its accounts for the year ending December 2017, three and a half months late. (Carlauren Group twice used a loophole in the Companies Act by shortening the accounting period by a single day, which extends the deadline by three months, to avoid being officially overdue.)

The accounts show that Carlauren Group had net liabilities of £610k and made a loss of £469k. Due to Carlauren Group’s small size, the accounts were not independently audited and did not include a profit and loss account. (The loss figure is derived from movement in the “profit and loss account” line item.)

The company says that they consider themselves a “going concern” on the basis that “The parent company and the controlling party have confirmed that they have the ability and will continue to provide financial support to the company”.

This statement does not make a lot of sense because Carlauren Group Limited is the parent company. That leaves only one source of financial support which is the controlling party and director, Sean Murray.

Investors should not rely on Sean Murray continuing to put his own money into Carlauren so that investors can cash out their C-Coins at £63 each. The financial position of the Carlauren Group should cast doubt over the company’s “guarantee” to buy back C-Coins at £63.

Market value

In the above press release Carlauren Group represents to investors that they can expect an “increase of its core value”.

However, the more the price of C-Coins increases on the internal exchange, the more expensive Carlauren’s services are (if new residents have to buy C-Coins on the open market over and above the coins they can buy at £70), and the more likely customers are to use an alternative care home provider that accepts fiat currency.

Or, in the case of existing members, to sell their C-Coins on Carlauren’s internal exchange and then buy residential / care services from another provider in fiat currency.

Indeed, it is questionable how many of Carlauren’s target market – predominantly the elderly, or their attorneys – will want to mess around with exchanging money for C-Coins and then using C-Coins to buy care home services in the first place.

As C-Coins have no underlying purpose other than to buy Carlauren Group’s care service, this means that in reality there is a ceiling on the value of C-Coins imposed by the market value of care services.

Supply and demand

Unusually for an Initial Coin Offering, Carlauren does not provide a “white paper” describing how the supply of C-Coins is controlled.

While Bitcoin and most of its competitors have the supply of the coins controlled by a mining algorithm which restricts how many coins enter the market (and eventually caps it entirely), there is no mention of any mining algorithm in Carlauren Coin Bank’s literature. Indeed, it says that the only three ways to acquire C-Coins are to become a member, accept C-Coins in lieu of fiat currency as an investor in one of Carlauren’s care home suites, or buy them on the exchange. Mining is not mentioned.

This suggests that Carlauren Group is able to create as many C-Coins as it likes for as long as investors and users are willing to hand over real money for them.

This lack of restriction on the supply of C-Coins further undermines the potential for C-Coins to increase in value.

Should I invest in Carlauren Group’s C-Coins?

The attraction of C-Coins to Carlauren Group is obvious. Due to the apparent lack of a mining algorithm, they can generate C-Coin tokens at will and exchange them for £70 of real money for as long as investors are willing to hand it over. They can also defuse their historic liabilities for any investor in their care home suites who is willing to accept interest in C-Coins.

For investors the attraction is less clear. With the market for care home services holding down the value of the coin, I wouldn’t expect this one to “go to the moon” (in crypto parlance) any time soon.  As for those who aren’t interested in the coin as an investment and just want to buy care home services, it seems an unnecessary complication.

If Carlauren Group becomes unable to meet its buy-back guarantee or provide residential / care services in exchange for C-Coins, the bottom will fall completely out of the market. Investors should ask themselves before investing in C-Coins:

• How would I feel if the market for C-Coins collapsed and I lost 100% of my money?
• Do I have a sufficiently large portfolio that the loss of 100% of my investment would not damage me financially?

If you are looking for a “guaranteed” investment, you should not invest in tokens issued by a small company with a negative balance sheet.