A widow who lost £140,000 to a corrupt financial adviser in a multi-million pound investment swindle says she will not be able to retire unless she sells her home.
Grandmother-of-eight Mary Swindlehurst, from Penwortham, near Preston, says her life savings and those of her late husband have been wiped out by investor Terry Warrington, who has been jailed with his partner Malcolm Barber for a £5m financial scam.
Speaking outside court, Mrs Swindlehurst, who was one of more than 100 victims caught up in the scam, said: “I am 65 and having to work full-time to pay my bills. I’ve put my house up for sale.
“My husband worked hard all his life and ended up with nothing.”
For almost 25 years, Morecambe financial adviser Terry Warrington and his colleague Malcolm Barber ran an investment company offering fixed bonds and loans to hundreds of investors across the North West.
But in April 2007, the house of cards came crashing down, leaving hundreds of pensioners penniless.
Warrington and Barber began to trade in the 1980s, offering legitimate and favourable returns on capital investments and loans to high risk borrowers.
It was a strategy described by the prosecution as “inherently risky and ultimately doomed”, using the interest from the loans to pay the interest on the capital investments.
However, unbeknownst to the investors, the companies they were investing in – Dublin and Gentry – were run by their adviser. The companies were set up in the Isle of Man but, in the 1990s, the Inland Revenue ruled the companies had been trading in the UK and were liable for a £400,000 cash bill.
Judge Christopher Cornwall, sentencing, said: “The unspoken but terrible truth of the matter was that the companies were not able to meet their legal liabilities.” In the years that followed, Warrington and Barber continued to offer investment bonds, in a bid to “trade their way out” of the financial difficulties they had fallen into.
Many of the investors were personal friends of Warrington, who would socialise with his clients at dinner parties and on the golf course.
One investor, Mary Swindlehurst, from Penwortham, said: “On the bottom of all his letters and all the paperwork there was the FSA stamp. You think when you see that you are covered and safe, but it was a lie.”
Many of the investors would re-invest their annual interest payments, happy with the above building society rate returns they were getting.
But when payments started arriving late, or not at all, and investors started asking for their capital to be returned to them, the cracks in the company started to show.
Mrs Swindlehurst said: “I suddenly realised the whole thing was crooked. My husband John was in hospital and we couldn’t get our money.”
Terry Warrington, of Michaelson Avenue, Morecambe and Malcolm Barber, 70, of Links Views, Wallasey, were convicted at Preston Crown Court of defrauding 128 elderly investors out of a total of more than £5m.
Judge Cornwall said: “All they wanted was what they were promised. An investment which did a little bit better than they could do in the building society.
“Most wanted to save for their retirement. They wanted to be in a position to help their grandchildren with a university education or a deposit for a first home.
“All they did was place their trust in men they should have been able to trust.”
He jailed Warrington for four and a half years and Barber for four years, banning both men from operating as company directors for five years.