Three company directors have been charged by the Serious Fraud Office (SFO) following the collapse of a company which offered ethical investments in the rain forests of Costa Rica eight years ago.
Ethical Forestry Limited, which was based in Bournemouth, collapsed in 2015 owing millions of pounds to 3,500 British investors, many of whom lost their life savings or their pensions.
On Wednesday the SFO charged Stephen Greenaway, Paul Laver and Matthew Pickard with two counts each of conspiracy to commit fraud by false representation and one count each of fraudulent trading.
The trio are expected to appear at Westminster Magistrates’ Court on June 28 but the trial will probably not take place until next year at the earliest, due to a backlog at Southwark Crown Court, the London court which deals with most financial crime.
Osofsky: ‘Victims Bravely Shared Their Experiences’
She said: “This company’s abrupt collapse impacted thousands of British savers and pensioners. We could not have brought this case without the many victims who bravely shared their experiences; we are grateful.”Between 2007 and 2008 Ethical Forestry Limited operated hardwood tree plantations in Costa Rica.
Investors were asked to put in a minimum of £12,000 and were told the fast-growing saplings would be grown, logged and sold, giving them a substantial return on their investment.
But when the company collapsed in 2015 the SFO began a comprehensive investigation into what had happened to the missing millions.
The SFO said many investors used funds from their self-invested personal pensions.
Investors Given CPS Coordinates of Their Trees
A statement by the firm’s liquidators, Fortus Recovery Ltd, said: “Many investors were led to believe by the company and its directors that they had ownership of trees and cropping rights in relation to trees in Costa Rica and were even given GPS coordinates to their trees. However, it is clear that these rights have not been given as they were not capable of being granted under Costa Rican law.”Osofsky, a U.S.-born lawyer and former deputy general counsel at the FBI, is stepping down in August after five controversial years at the SFO, which has seen a number of major fraud trials collapse.
Her replacement has not yet been announced but the Ethical Forestry trial could be the first big test of the new director’s tenure.
In July 2022 two separate reviews were published which identified a series of failings at the SFO which led to the collapse of two criminal trials—the Unaoil case, which involved alleged bribes paid to Iraqi oil officials, and the case of Simon Marshall and Nicholas Woods, Serco executives who were acquitted on the orders of a judge.
David Calvert-Smith, KC, who led the review into the Unaoil case, found Osofsky had made several “mistakes and misjudgments” in her handling of a former Drug Enforcement Administration agent, David Tinsley, who acted as a “fixer” for one of the defendants.
‘Think They Know Better’ Culture at SFO
Rogers told MPs: “Historically in the SFO we found a culture of non-compliance. People who think they know better. There is a cultural organisation problem which predates the current director.”But when Osofsky herself appeared before the committee she talked up the SFO and said they had overseen the convictions of Caribbean holiday fraudster David Ames and ethical investment fraud pair Andrew Skeene and Junie Bowers, and the resolved the Glencore scandal.
Osofsky said she “regretted” her decision to meet with Tinsley and hand him over to the Unaoil investigators.
She said the SFO changed its internal policy in May 2020 so they no longer meet with third parties who are not lawyers.
Looking forward, Osofsky said: “We need good disclosure officers. We need to be able to hire good disclosure counsel … we have developed a bespoke and advanced training programme, we have reenergised the disclosure working group, we have disclosure champions, and we evaluate disclosure risk during quarterly reviews of our cases.”
The SFO was set up in 1987 following a string of financial scandals in the City of London, including the collapse of the Bank of Commerce and Credit International the previous year.
