Pension Fraud: first confiscation order secured by The Pension Regulator

1 December 2020

Over £30 million is reported to have been lost to pension scammers since 2017 according to complaints made to Action Fraud. The FCA and other regulators are advising savers to exercise caution in relation to pension fraud, in an effort to minimise the risk that consumers will suffer loss in the first place.


Where loss has already been sustained however, regulators are showing a determination to pursue and prosecute those responsible, with sentences reflecting the criminal courts’ view of the seriousness of these offences. A recent case development shows that where scammers have been successfully prosecuted, The Pension Regulator (TPR) will also make use of its power to seek post-conviction orders such as confiscation orders to further deter criminal behaviour in this sphere.

Accountant Roger William Bessent, after receiving the first immediate custodial sentence arising from a prosecution brought by TPR last March, has now been ordered to pay back over a quarter of a million pounds following his conviction for defrauding a pension scheme.

The original case

Mr Bessent was a trustee and administrator of Focusplay Retirement Benefit Scheme (FRBS), from which he transferred money into businesses he part-owned and which were run by him, his family and his client.

The Insolvency Service and TPR both investigated and then prosecuted Mr Bessent, which resulted in his guilty pleas to multiple counts of fraud, making prohibited employer–related investments (ERI) and acting as a director while disqualified. He was sentenced on 29 March 2019 to 39 months in custody.

The confiscation order

On 28 October 2020 Mr Bessent was ordered to repay £274,733 in three months and to hand over the full balance of his cash accounts (amounting to just under £10,000) within a week. If he fails to meet the three month deadline this will result in a 30 month extension of his sentence and the amount owed will increase with interest. The majority of the award will be payable to the FRBS with the remainder going to the Home Office as part of their Asset Recovery Incentivisation Scheme (ARIS).

What are the powers of The Pensions Regulator?

TPR regulates work-based pension schemes in the UK and brings proceedings in order to protect members’ benefits and promote the good administration of work-based pension schemes.

Over the last few years the government has been considering introducing major changes to the way pension schemes are run. TPR currently has a range of regulatory and enforcement actions at their disposal including:

  • Notices which require individuals, companies or third parties to take specified action in a specific time period;
  • Recovery of late or missing payments from an employer;
  • The banning of trustees who TPR do not consider fit and proper for the role;
  • Fines for law breaches;
  • Criminal investigation and prosecution and the power to seek associated  orders such as confiscation orders, production orders, restitution orders and restraint orders;
  • Appointment of a trustee to help run the scheme effectively.

The Pension Schemes Bill 2019-21 was introduced to Parliament in January 2020 setting out extended powers for TPR to tackle pension fraud. The proposals include new criminal offences and non-criminal sanctions with the limit on financial penalties being increased to £1 million.

The threat of a pension fraud enforcement action can cause concern where an investigation may be imminent or underway, or where assets have been seized, restrained or frozen by the civil or criminal courts. Our team is highly experienced in providing strategic and tactical advice to individuals and corporations in respect of proceeds of crime matters in relation to such matters.

Further information

For further information on the issues raised in this blog post, please contact a member of our criminal litigation team.

 

About the authors

Anna Holmes is an Associate in our Criminal Litigation team. She is an experienced criminal law practitioner who has represented clients in respect of a wide range of offences and has extensive experience in dealing with vulnerable clients.

Rosie Gibson is a trainee solicitor currently in the Criminal Litigation team. She joined Kingsley Napley in 2016 as a paralegal in the Regulatory department. She subsequently worked in the Criminal Litigation department before starting as a trainee in September 2019.

 

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