Rainforest fraud trial: Investors' cash spent on luxury holidays, hotels and restaurants (From Echo)
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Basildon firm rainforest fraud trial: Investors' cash spent on luxury holidays, hotels and restaurants
A COMPANY boss used investors’ cash on luxury hotels, restaurants and holidays, a court heard.
Matthew Ames, 38, from Goldfinch Lane, Thundersley, used money invested in two Laindon-based companies to fund a trip to the US with two female staff members, which included a stay at the Mandalay Bay hotel in Las Vegas.
Ames and the saleswomen enjoyed meals at the Bellagio Hotel and Wing Lai Chinese – high-class restaurants in the city.
Clothes were also purchased for one of the women at Ambercrombie & Fitch.
Mandalay Bay hotel in Las Vegas
Ames told a jury at Isleworth Crown Court they were legitimate business expenses because they were trying to promote their Forestry for Life rainforest carbon credits investment scheme to the US market at green conferences.
He said: “We had the idea to promote Forestry for Life to US investors.
“When I came out the hotel I thought I was a film star because a story had broken about Tiger Woods and the paparazzi were everywhere because the Mandalay Bay hotel was where he took his first female fan.”
He said no sales were made, but the three of them built up a network of contacts.
The clothes were needed because one of the girls spilt a drink on her outfit, he said.
Ames admitted using the business account to pay for exclusive luxury villa accommodation for two family holidays totalling more than £13,000 on the Caribbean Island of Mustique, was not a legitimate expense.
Referring to the first occasion in 2009, he said: “It was five years ago, but from memory it was because it was the only debit card I had on me at the time. It should have gone on the director’s loan account.”
Grand lobby of Mandalay Bay hotel
Stuart Biggs, prosecuting, said Ames was “robbing Peter to pay Matthew”. He told the court that for the second trip in 2010, Ames transferred money from the business to his personal account.
He said the transfers meant the combined balance of the two firms went as low as £1,000 to £6,000 at times.
Ames denies two charges of fraudulent trading, in connection with Forestry for Life and the Investor Club he ran from a barn conversion in Dunton Road, Laindon.
He is accused of scamming investors through a carbon credit scheme and an investment in Sri Lankan teak plantations, which offered guaranteed 12 per cent returns.
The court was told Ames covered up his fraud by using what is know as a “Ponzi scheme” – repaying existing investors with new investors’ money.
Mustique in the Caribbean
It is also claimed the companies never bought any land for planting teak trees or protecting rainforest.
Ames argued he injected his own money to set up the businesses and was entitled to recoup that and added he only paid himself £75,000 in wages over two years before the Financial Services Authority shut down the firms in March 2011 when there was about £200 left in the accounts.
Ames said: “Yes there was tight cash flow. In business sometimes you have to rob Peter to pay Paul, but that does not mean it was dishonest. ”
Ames with Jack Charlton at 2010 Forestry for Life Launch
He told the jury before being shut down he was close to a deal with international food production company Bunge over a carbon credits project worth millions of pounds and in positive talks with Barclays Bank about it buying the company.
Mr Biggs asked what proof Ames had to back up claims he bought 5,000 teak trees in Sri Lanka, which did not show in the accounts and were never planted.
Ames said he paid in cash as it was a rural part of the country and he left the paperwork with a contact – known only as Eddie – who was nurturing the saplings.
Mr Biggs said: “You never bought any trees did you?”
Ames insisted he did and said the prosecution’s case was all lies.
The trial continues.