Fraudsters jailed for a total of 10 years for £13 million pension scam after TPR prosecution

A pair of fraudsters who were part of a criminal enterprise that tricked more than 200 savers into transferring their pension pots into fraudulent schemes they controlled have been jailed for a total of more than 10 years.

Following a prosecution brought by The Pensions Regulator (TPR), Alan Barratt, 62, of Essex and Susan Dalton, 66, of Rochdale were sentenced at Southwark Crown Court on Friday (22 April) after admitting charges of fraud by abuse of position arising from their roles as trustees of pension schemes.

Barratt received a sentence of five years and seven months while Dalton was sentenced to four years and eight months in prison. The pair were also banned from acting as company directors for eight years following a request by TPR.

The court set a timetable under the Proceeds of Crime Act (POCA) to investigate whether any of the money taken in the fraud can be recovered from the defendants, with an initial hearing set for 4 November.  

The court heard how Barratt – who was extradited to the UK from Spain in 2021 in connection with the fraud – and Dalton were key participants in a high-value pension liberation fraud between 2012 and 2014.

The pair were part of a criminal enterprise which persuaded 245 members of legitimate occupational pension schemes to transfer their pension savings, worth about £55,000 on average and with a total value of £13.7 million, into scam pension schemes under the control of the defendants.

Once the savings had been transferred, the pair then passed the lion’s share of the money to mastermind David Austin who used it for his own personal benefit, to fund his businesses, pay others involved in the pension liberation operation and enrich himself.

Once independent trustees had been appointed by TPR to review scheme investments and assets, it became apparent that it was very unlikely that any pension funds would be restored for scheme members.

A civil trial brought by TPR against Barratt, Dalton and others, took place at the High Court in 2018 after which Barratt was ordered to repay c.£7.7 million and Dalton c.£5.9 million. Following the end of the trial TPR began a criminal investigation. Austin was part of TPR’s investigation into the allegations but died in 2019, before it completed.

Delivering his judgement, His Honour Judge Perrins said both Dalton and Barratt had acted as principal points of contact for victims, earned substantial commission payments and were both aware that fraud was taking place.

He said: “What is most striking is the impact on others, which has been utterly devastating. I have read 13 victims’ personal statements, they each tell a similar story, which I’m sure is representative of all. People who had worked hard, saved for their future and have been robbed of their financial security. I heard about depression, anxiety, divorce and suicide attempts. Each account is a story of a life ruined and you should be ashamed of bringing such misery to so many innocent people.”

Judge Perrins added: “These are undoubtedly extremely serious offences in which each of you carried out the role of trustee dishonestly and, put simply, had you not done so, many people would not have had their lives ruined.”

Nicola Parish, Executive Director of Frontline Regulation at TPR, said: “This is a despicable case which highlights the devastating impact pension scammers have on their victims.

“Barratt and Dalton were part of a criminal enterprise that tricked hundreds of savers into transferring their hard-earned pension pots into scam schemes under their control. In their role as trustees, the pair enabled millions of pounds to be taken from the schemes and channelled offshore, where it was used to enrich others involved in the criminal enterprise and to profit themselves.

“This prosecution and substantial custodial sentence sends a clear message that TPR and the courts will take tough action against fraudsters. Our successful extradition of Barratt from Spain also shows there’s no haven for scammers. 

“Pension scams ruin lives. Savers should always be careful when making any decision to transfer a pension pot that’s taken a lifetime to build and should contact MoneyHelper, part of the Money and Pensions Service, for impartial guidance first.”

Criminal enterprise

The defendants, based in a call centre in Spain, were handed names of potential victims found by introducers via cold calls and internet enquiries offering free pension reviews. The defendants, and other sales agents, told victims their existing pension arrangement was not giving a healthy return and transferring to a new scheme could increase their retirement savings.

The introducers promised safe investments and a tax-free cash bonus when the transfer was completed. All of these claims were false – the savers’ money was immediately put at risk, and ultimately taken by Austin, and the so-called investments were totally inappropriate and have yielded minimal if any return.

Any rebate or bonus paid to victims was taken from their own pension savings, exposing them to punitive tax charges for early access to their pensions

After being passed the leads by the call centre, Barratt and Dalton became the main point of contact for several victims during the transfer of their pensions and provided false reassurance that everything was above board and the victim’s money was safe.

A total of £13,737,202 was transferred into the scam schemes. The court heard that Barratt and Dalton effectively surrendered control of the accounts and the pension scheme funds allowing non-trustees – including Austin and others in the criminal enterprise – to do what they wished with the money.

The fraud has had a devastating impact on the victims with many saying they are now suffering financial and mental health issues and are ashamed to have lost their savings. In a statement, one victim said “I have no dreams or aspirations left. I am just surviving on benefits.”

The court heard that the total amount taken from the schemes by Barratt and Dalton for their personal benefit was £250,416.49 and £126,624.69 respectively.

How the scam worked

Victims were promised cash incentives and high investment returns if they transferred their pensions. However, the cash payments were taken from their savings leaving them at risk of punitive tax charges as a result of accessing their pensions before the minimum age of 55.

The majority of victims’ savings were routed via Austin’s companies, through off-shore bank accounts and then sent back to Austin. Other scheme monies were lost through highly speculative and inappropriate investments, such as an unbuilt timeshare development in St Lucia, which ultimately yielded no return.

As part of its action to prevent further funds being removed from the pension schemes, TPR removed Barratt and Dalton from their positions as trustees in December 2014 replacing them with a firm of professional trustees.