How Ambridge fell for a massive financial scam

Following the Melling Scam that has caught poor Christine out we investigate how the people of Ambridge got scammed and Shari Vahl from You and Yours discusses how it happened and how you can avoid being scammed.

What's the deal with Melling Equestrian Investments?

It was run by a very charming friend-of-a-relative-of-a-friend of Justin Elliott. He was smooth and dapper and was offering very high returns of about 12% for investments into what he described as a world class racecourse for top quality horses in Costa Rica.

How were they scamming people?

Hugo Melling, apart from being charming, was also armed with very convincing, plushly illustrated brochures, full of smiling happy people, photographs of gorgeous places and computer generated impressions of what the racecourse would look like when it was finished. They also claimed to have offices in the heart of London’s Regent Street. Hugo claimed that he and his co-directors were international property experts and had the lifestyle and cars to match. These are the characteristics of many of the criminals You and Yours has investigated.

And Matt was also running his own scam as well?

Matt arrived in Ambridge ostensibly to source top quality bloodstock for Hugo’s racecourse. But realising he wasn’t going to be a part of the big money coming to Hugo, he decided to get some cash for himself. Cleverly he identified the very best horses in Ambridge and gave the prices to Hugo Melling, who supplied him with the money to buy them. But Matt actually bought the very worst horses and pocketed the difference. He told ex-lover Lillian that the money was to pay her back. But of course that money came from other investors who’d given it to Hugo.

What's the picture of these kinds of fraudulent operations in the real world?

These frauds are huge. There are lots of unregulated investments being offered by unregulated salesmen promising enormous returns which simply don’t stack up. While this fictional fraud involves Costa Rica, many real life bogus investment schemes are actually based in the UK and that gives people false trust that they will be fine. Hundreds of thousands of people in the UK have lost millions of pounds of their pensions and savings in the belief that they were securely invested. There is little protection for these people and very little prospect of them getting their money back.

What do they do to make themselves appear genuine?

Like Hugo, criminals doing this go to enormous lengths to persuade their victims they are genuine. Don’t forget they have no intention of paying people back so they’re happy to spend their victims’ money on slick websites and highly-produced brochures. They’ll even meet you, wine and dine you, take you on their yacht or for a ride in their extremely expensive car to convince you that you too can be a high roller.

How can you spot one?

The first thing to watch out for is the cold call or an email or letter out of the blue. Never, ever believe it. Some people might be encouraged to go to a sales pitch like the one Hugo Melling did for Christine Barford. They can seem incredibly convincing. Sometimes they even have stooges in the audience to make it seem true. Genuine investment specialists tell us that anything unregulated promising guaranteed returns higher than 1% is lying to you. Shockingly, on You and Yours we have experience of people being defrauded in this way by people they know and trust.

What should you do if you think you have identified a fraudulent business or scam?

First, call Action Fraud - the UK’s fraud reporting centre - and give them all the details. They will need them to pass to the National Fraud Intelligence Bureau, which will decide who is best to investigate. Then you could even drop us a line to youandyours@bbc.co.uk

Shari Vahl is a reporter and presenter for BBC Radio 4 You and Yours

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