Police charge seven in £20m fraud probe
Seven people were last night charged in connection with an alleged £20 million fraud after the collapse of three Westcountry firms.
Five members of the same Cornish family and a high-profile Somerset councillor are to face court after a near three-year investigation by Devon and Cornwall Police into the failure of Crown Currency Exchange, Crown Holdings Ltd and Mayfair and Grant.
Hayle-based Crown Currency Exchange – one of the UK's largest foreign exchange firms – went bust in October 2010, owing millions to some 11,000 customers across the country.
Police launched an investigation into the West Cornwall firm's activities in November 2010, and arrests were made the following month.
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The seven were charged with a range of fraud and financial offences when they answered bail at Launceston Police Station, in North Cornwall, yesterday.
Company founder Peter Benstead, his children Julian Benstead, Katey Calvimonte and Victoria O'Brien, and his son-in-law Roderick Schmidt, all face a number of charges.
Director Edward James, a former Conservative chairman of Mendip District Council, was also charged, along with company accountant Stephen Matthews.
All have been released on bail to appear at Westminster Magistrates' Court in London on September 17.
In a statement, Devon and Cornwall Police said: "Following a two-year and nine-month police investigation by the force's economic crime unit into the failure of three companies, namely, Crown Currency Exchange Ltd, Crown Holdings Ltd and Mayfair and Grant Ltd, the following seven persons have been charged:
Peter Benstead, 70, Penzance Fraudulent trading, money laundering, perverting the course of justice, theft, deception and false accounting companies act offences.
Edward James, 73, Glastonbury Fraudulent trading, false accounting and companies act offences.
Julian Benstead, 44, Penzance Fraudulent trading and theft.
Katey Calvimonte, 35, Penzance Deception and perverting the course of justice.
Roderick Schmidt, 44, Penzance Fraudulent accounting, perverting the course of justice, theft, false accounting and companies act offences.
Victoria O'Brien, 37, Welwyn, Herts Perverting the course of justice.
Stephen Matthews, 50, Penzance Fraudulent trading, theft, false accounting and companies act offences.
Crown Currency Exchange, founded in 2005, had become one of the country's leading personal currency exchange businesses, allowing customers to pre-order foreign currency for £300-£10,000 up to a year in advance.
The firm, which employed some 40 people at its offices in Foundry Square, Hayle, had handled a reported £150 million worth of transactions since it was established.
But according to an administrator's report at the time, Crown Currency collapsed owing £16 million with little more than £3 million in the bank.
Edward James, who was mayor of Glastonbury in 2009, stood down as chairman of Mendip District Council, when the police probe was launched. He had been a shareholder in Crown Currency Exchange and a director on the board before resigning from the role in 2009.
The police investigation into Crown Currency was later expanded to the collapse of a cash-for-gold company called Mayfair and Grant.
It only started in June 2009, buying gold and other precious metal from customers. Based in the same building in Hayle as the currency company, it also obtained investment funds from customers who wanted to invest in gold.
Crown Currency was not regulated and therefore not covered by Financial Services Authority (FSA) compensation schemes – meaning customers could not recover their cash through the FSA.
Customers threatened to launch a legal bid to recover their money but deferred any action in lieu of the criminal case.