Said to be extremely litigious, and who threatened legal action against investors who went public with complaints, and also the BBC over its reporting on Harlequin, Ames sued ICE and the accountants Wilkins Kennedy. He also blamed a “Harlecon” website set up to raise concerns about the company, as well as the global economic crisis, the tightening of regulations over SIPP investments and the SFO’s investigation into him. Senior Caribbean politicians were also persuaded to support the scheme.Īmes did not give evidence in his trial, but blamed Harlequin’s failure on his accountants, whom he said were negligent, and on his Irish building contractors, ICE, which he said defrauded him. Ames had a corporate box at Wembley stadium. Harlequin’s appeal was bolstered by stars such as the Wimbledon champion Cash, who was to endorse tennis academies at the resorts, Player, a nine-times winner of major golfing championships who it was said was to design a golf course at a resort that was never built, and, according to Harlequin’s promotional YouTube video, Liverpool FC, which would be associated with football training at the resorts. They were attracted by Ames charismatic pitches at high-profile sales events in golf clubs, conference centres and exhibition centres across the UK. Some investors would only get back one or two pennies for every pound they had invested. Among victims are many of pensionable age, now forced to work on into retirement. However, the remaining half of investors – many who put in money from their self-invested personal pension (SIPP) – lost thousands.
Investors advised by an IFA have been able claim a total of £125m through the financial services compensation scheme. He also used a network of independent financial advisers (IFA) who were incentivised by 10% commissions with no claw-backs, even if the investor subsequently dropped out. Only 28 of more than 8,000 investors ever completed purchase on a unit.Īmes used 2,000 to 3,000 intermediary sales agents, some of them on commissions as high as 10% of the purchase price, the SFO argued. It became a type of pyramid structure – that exponentially grew ever larger.
To build one unit, you needed to sell three. Ames never obtained any external funding, so its operation was wholly dependent on new investor funds. Investor funds were not ringfenced for particular resorts or properties, but spent throughout the Harlequin company. Investors paid a £1,000 reservation fee and a 30% deposit, half of which went towards fees for Harlequin and relevant sales people, with the remaining 15% towards construction. The SFO argued Harlequin’s business model was fundamentally flawed. By the time Harlequin collapsed, its overall losses were £398m. In 2011, Ames was advised by restructuring and insolvency practitioners he might be trading while insolvent. The charges covered the period from 2010 – and not from the time of 2005 when Harlequin was set up – because by then the state of the business was such he must have known he was exposing investors to risk, the court heard. His wife and sons have not been charged with any offence.Īmes was convicted by a jury on 3 August on two counts of fraud by abuse of position after a five-year SFO investigation that began in 2012. Ames was even in the process of trying to build his own airline, Harlequin Air, to fly guests to and from the then non-existent resorts.
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Some family members were paid £10,000 a month, the Series Fraud Office said. The family enriched themselves by £6.2m through the Harlequin business, enjoying a luxury lifestyle flying to and from the Caribbean, with Ames employing his own chauffeur. David Ames was found guilty on two counts in August.
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