A group of London companies controlled by the now bankrupt Spencer Michael that promised to help investors become instant millionaires has been wound up in the High Court on grounds of public interest following an investigation by Companies Investigation Branch (CIB).
Potential investors were invited to attend free "Secrets 2 Success" seminars advertised with the line "no risk, no effort" and were encouraged to join with "little or no money" an "Instant Millionaire Programme." They were told they could learn more about becoming a property millionaire by attending further seminars described as "Negotiate 2 Win" at a cost of £1000, the "No Money Down" course at a cost of £2000 and the "Freedom 2 Fortune" course at a cost of £4000.
Some people who attended these seminars then went on to borrow money, sometimes on their credit cards, and employed the services of the companies to invest in buy-to-let property.
Investors were told that Mr Michael was a specialist in the "buy to let" market with an estimated personal portfolio of £11million. They were promised he would locate suitable properties for investment that were in the course of construction and by buying in bulk from the developers could negotiate significant discounts.
CIB's investigation discovered that the companies were being operated by Michael as effectively one entity and with a complete lack of commercial probity. In particular there were:
* Inadequate records kept;
* Clients' money was paid into Michael's personal accounts to fund his own property dealings;
* Clients' deposits were not returned for purchases that did not proceed;
* Failure to account for rents due to clients;
* Misleading advertisements;
* Misrepresentations as to the property discounts obtainable;
* Insolvency and breaches of Consumer Credit protection;
At least 30 investors were found to be owed nearly £1.6 million.
In ordering the companies into liquidation Mr Registrar Jacques stated the evidence made out a clear case that it was just and equitable to wind up the companies in the public interest.
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