DeVere USA CEO and managers found guilty of defrauding Brit expat investors

DeVereUSA, a New-York based subsidiary of the international financial advice giant, have been found guilty of defrauding hundreds of British expats in the USA to the tune of around $8 million dollars.

During a court case brought by the USA’s Securities and Exchange Commission it was disclosed that the local CEO and two of his former managers had charged clients literally millions of dollars in undisclosed fees and charges. As a result of the guilty verdict, the SEC has struck a deal involving the payment of an $8 million civil penalty to be used as a ‘Fair Fund’ to compensate victims of the scam. In addition, a further case brought to the Manhattan court by the SEC is aimed at the financial advisers who carried out the fraud.

Former DeVere USA CEO and UK citizen Benjamin Alderson, presently resident in the Bahamas, along with Briton Bradley Hamilton and a former DVU New York area manager are accused of targeting hundreds of British investors living and working in the USA via the social media site Linkedin. The victims mostly had UK-based occupational pensions valued at £100,000 or more, and were persuaded by the fraudsters to transfer their pensions to a QROPS – Qualifying Recognised Overseas Pension Schemes.

Between June 2013 and March 2017, the so-called advisors violated the SEC's rules by failing to inform investors of the huge commissions they earned from each transfer as well as by not disclosing further losses incurred due to the transfer. Hamilton and Alderson were DeVere’s top two generators of revenue during the period, with the majority of their profits coming as a result of seven per cent upfront commissions.

When asked about fees and charges by their victims, the stock reply quoted a one per cent advisory fee, and when pressed by one investor, they agreed to waive the one per cent. No mention was ever made of the 7 per cent upfront commissions. Lies were also told over the benefits of a QROPS, in that access to 15,000 securities was given although the actual number was less than 100. Misleading statements about the tax benefits of the product were also given to investors by the fraudsters, failing to mention it could be taxable in the USA and stating the pension transfers were not subject to IRS scrutiny.

The defendants were also accused of training up other IFAs employed by DeVere in techniques involving misrepresentation as regards tax liabilities. In addition, Alderson submitted false filings to the IRS by failing to disclose his massive commission payments.