Pensioner tells fraud trial of £100k savings loss shock on her birthday

Tuesday 21 August 2018

A pensioner in her 80s and a middle-aged couple who recently moved from Australia to the island are the latest witnesses to give evidence in a £2.7m fraud trial in Jersey’s Royal Court that could last six weeks.

It’s claimed Chris Byrne (50), the former CEO of Lumiere Wealth, got investors to put money into a Brazil-based ‘high-risk’ venture without telling them all the details – something he denies.

In yesterday's hearing, the pensioner told the court that she had put £100,000 – 40% of her ‘investible income’ – into Providence on the advice of Mr Byrne. The company specialised in a practice known as 'factoring' -  ‘buying up’ companies’ debts cheaply and making a profit by chasing them up. But, she claims she hadn’t been made aware of all the facts and probably wouldn’t have invested if she had.

Amongst the allegations levelled against Mr Byrne are that he gave financial advice when he didn’t have a licence; that he didn’t tell investors how Providence made its money and that it was high-risk; that Providence was a major shareholder in his company, Lumiere; and that under a secret deal he was getting money from Providence.

The 80-year-old told the court she’d been "retired forever" and that she had a small Jersey pension, and a very small UK pension – so small it was paid quarterly. For the most part she depended on her investments returns to live. As she put it: “I think I’d be in the poor house without my investments."

She met Mr Byrne when he worked for a local bank, and had stuck with him when he moved to a local firm of investment managers, and then when he set up his own business because she “liked him”, and thought him “open and friendly."

Under cross-examination from Advocate Olaf Blakeley, the pensioner admitted that when she was dealing with Chris she knew he didn’t have a licence, but felt it would only be a matter of time before he was given one. She also said she trusted Mr Byrne’s advice; that he didn’t put her under any pressure to buy; and that he did make her fill out a risk questionnaire that aims to "match clients and products." However, she adamantly denied that he’d shown her a video about Providence.

Pictured: The pensioner became alarmed about her investment when she noticed Lumiere and Providence shared similar lighthouse logos.

Although she told the court she’d become increasingly wary and suspicious when she noticed Lumiere and Providence had a similar lighthouse logo and there might be some connection, the first time she realised "things had gone horribly wrong" was on her birthday when she was being asked questions at a meeting at Police headquarters.

Giving evidence separately, the married couple said they’d been offered jobs in Jersey and had decided to move to the island from Australia. At the time, they owned two houses – one in Queensland, the other in Sydney. They sold the latter and made about £800,000, which they put into a current account in Australia. They wanted to invest the money but were worried about how much money they might loose if they were constantly having to pay commission when converting currencies, and about the affect of fluctuating exchange rates. They were introduced to Chris Byrne through a mutual friend. At a series of meetings he told them about Providence, which in their words he described as “safe as houses." He also said he could set up an Australian dollar account.

The couple argued over whether they should invest, and how much, with the wife telling the court it was "one of the unhappiest times" in their lives. In the end, they invested £350,000. According to prosecution Advocate Simon Thomas, so keen was Mr Byrne to get them onboard, he got Providence to pay the £2,500 penalty the couple were going to incur by withdrawing their money from their Australian account early.

Both told the court Mr Byrne conducted risk assessments to find out what type of investor they were, and both were surprised to be classified as ‘moderately adventurous’ or ‘adventurous’ - something they strongly disagreed with. Nevertheless, they were told the questionnaire and analysis was just one factor in matching clients and products. Both told the court it was their understanding that whilst they might loose money, they could withdraw their capital at any time and the only penalty they would incur would be the interest.

Pictured: Lumiere was based at Castle Quay on the Waterfront.

The couple became increasingly alarmed about their investments towards the end of February 2016 and tried to contact Mr Byrne to sort things out. In their words, he was very evasive and it was two or three weeks before they got a reply. The husband in particular was alarmed about Providence’s involvement with Lumiere. He told the court: “If one company is feeding another company it would seem a conflict of interest." Eventually, the couple contacted Mr Byrne and said they wanted their money back. They were told he’d resigned on health grounds and they’d have to contact Providence directly.

On hearing they’d lost all their money, the wife told the court she said to her husband, "we shouldn’t have done this." He told the court he felt he’d "been punched in the stomach." And that the last time he’d felt like that was when he’d been told their house in London had been burgled.

The trial is being heard by Royal Court Commissioner Sir John Saunders and Jurats Charles Blampied and Robert Chistensen, and continues this morning with evidence from more investors.