Millionaire Bankrupts Exposed Panorama


Millionaire Bankrupts Exposed

Similar Content

Browse content similar to Millionaire Bankrupts Exposed. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

A bankruptcy system in crisis,

being cheated by the unscrupulous.

0:00:070:00:12

This mining tycoon went bankrupt

owing almost 13 million.

0:00:120:00:16

Days later driving this

luxurious Bentley.

0:00:160:00:22

This sports promoter declared

himself bankrupt owing ten million.

0:00:220:00:25

We found him and his wife

still driving a line of luxury cars

0:00:250:00:28

and living it up in Perthshire.

0:00:280:00:32

And this banned company director,

once one of the biggest donors

0:00:320:00:38

to the Conservative Party,

and a £41 million bankrupt.

0:00:380:00:42

Here he is running multi-million

pound housing developments.

0:00:420:00:45

Tonight on Panorama,

we expose the millionaire

0:00:450:00:47

bankrupts playing the system.

0:00:470:00:57

When a business goes bankrupt, it's

usually a shattering experience.

0:01:040:01:09

This was once a thriving family

business in Staffordshire employing

0:01:090:01:12

more than 40 people.

0:01:120:01:15

A printing company,

the modern digital age has

0:01:150:01:17

now forced its closure.

0:01:170:01:22

Every asset: the chairs,

the filing cabinets, even the ink,

0:01:220:01:26

will now be auctioned off so that

creditors can be paid.

0:01:260:01:32

It's a painful process

for the former owner

0:01:320:01:34

and his business partner.

0:01:340:01:40

We walked out of there and locked

the door for what for me

0:01:400:01:43

was going to be the final time.

0:01:430:01:50

And I gave her a hug

and she sobbed, it was really

0:01:500:01:59

deep, heartfelt sobbing.

0:01:590:02:02

It was hideous.

0:02:020:02:06

This has been everything to you.

0:02:060:02:08

It has been everything to me.

0:02:080:02:10

It was only three months ago

but it was our life.

0:02:100:02:12

We put everything into it.

0:02:120:02:15

The pride that I felt suddenly

turned to quite the opposite.

0:02:150:02:18

To?

0:02:180:02:21

Embarrassment.

0:02:210:02:26

The embarrassment that everything

I had worked for had been a failure.

0:02:260:02:29

I had let everybody down,

let my staff down, let my suppliers

0:02:290:02:31

down, let my clients down.

0:02:310:02:34

How much do you owe?

0:02:340:02:40

Between me and my partner

about £140,000, something like that.

0:02:400:02:43

So, it is not millions,

but it may as well be.

0:02:430:02:49

Every week in the UK,

more than 300 businesses

0:02:490:02:51

are forced to close.

0:02:510:02:53

And the number of personal

insolvencies, including

0:02:530:02:57

bankruptcies, is on the rise -

up more than 10% in the last year

0:02:570:03:00

in England and Wales.

0:03:000:03:03

For most people, bankruptcy is a

shameful and a devastating process.

0:03:030:03:08

They can lose everything and face

starting again from scratch.

0:03:080:03:12

But I've discovered that's not

the case for everyone.

0:03:120:03:15

In fact some of Britain's Richest

Bankrupts are playing the system

0:03:150:03:18

and using weaknesses

in the bankruptcy process

0:03:180:03:21

itself to their advantage.

0:03:210:03:26

This is Graham Gillespie.

0:03:260:03:28

A mining and property magnate,

he went bankrupt in 2012

0:03:280:03:32

owing almost 13 million.

0:03:320:03:37

Just days after, he drove this

luxurious Bentley to the prestigious

0:03:370:03:41

Gleneagles Hotel in Perthshire.

0:03:410:03:44

Believing he was hiding assets,

the authorities twice went to court

0:03:440:03:48

to have Mr Gillespie's bankruptcy

extended whilst they tried

0:03:480:03:52

to track them down.

0:03:520:03:55

One asset they wanted was this

sought-after registration

0:03:550:03:58

plate worth £180,000.

0:03:580:04:02

Mr Gillespie claimed he'd sold it

to pay a gambling debt.

0:04:020:04:05

Yet I filmed him with it

just a few months ago,

0:04:050:04:08

on a brand new Bentley.

0:04:080:04:11

We contacted Mr Gillespie

but his lawyer said he didn't

0:04:110:04:14

want to give us a statement.

0:04:140:04:18

And here's another millionaire

who went bankrupt, yet

0:04:180:04:20

doesn't appear to be

struggling financially either.

0:04:200:04:23

This is Barry Hughes

and his wife Jacqueline.

0:04:230:04:26

He made his money through

boxing, private security

0:04:260:04:28

and sports promotions.

0:04:280:04:32

He declared himself bankrupt

in 2014 after being hit

0:04:320:04:34

with a £10 million tax bill.

0:04:340:04:38

Yet for Mr Hughes this appears

to have been nothing more

0:04:380:04:40

than a financial blip.

0:04:400:04:43

Despite claiming he has

absolutely zero assets and,

0:04:430:04:45

despite the fact his bankruptcy case

remains open, his lavish

0:04:450:04:48

lifestyle appears intact.

0:04:480:04:54

I film him and his wife driving

a line of luxury cars.

0:04:540:04:58

Here he is in an Audi Q7.

0:04:580:05:01

A Bentley Bentayga.

0:05:010:05:04

And a Rolls Royce Dawn convertible.

0:05:040:05:07

Total value of the family's cars

just under half a million pounds -

0:05:070:05:12

and that doesn't include the cost

of their very exclusive private

0:05:120:05:15

registration plates.

0:05:150:05:19

All of which I film being driven

towards their weekend abode of late,

0:05:190:05:22

in this exclusive gated

community in Perthshire.

0:05:220:05:28

We contacted Mr Hughes -

but his legal team also said

0:05:280:05:30

he didn't want to speak with us.

0:05:300:05:35

In 2016, the latest full

year figures available,

0:05:350:05:39

more than 20,000 people went

bankrupt across the UK, owing

0:05:390:05:43

hundreds of millions to creditors up

and down the country.

0:05:430:05:49

So who makes sure that assets

are declared honestly,

0:05:490:05:53

creditors get paid what they're owed

and that people involved

0:05:530:05:55

don't just do it again?

0:05:550:05:58

I went out on the road

with an insolvency investigator,

0:05:580:06:08

a man whose job it is to sort

the "simply failed"

0:06:100:06:15

from the "deliberately fraudulent."

0:06:150:06:16

It's not a crime to be bankrupt.

0:06:160:06:18

It's not a problem to have debt

but if you get to the stage where

0:06:180:06:21

you can't pay off your creditors

and your assets don't

0:06:210:06:24

cover your income, bankruptcy

appears to be the end of the line.

0:06:240:06:26

It's like dying and being

reborn again financially.

0:06:260:06:28

Yet debts only get paid

if and when assets are

0:06:280:06:31

tracked down and sold.

0:06:310:06:32

If they aren't declared and can't be

found, those owed money get nothing.

0:06:320:06:35

Bankruptcy and insolvency

is not a victimless crime.

0:06:350:06:37

There are people out

there who are either creditors,

0:06:370:06:39

it may be, a tradesman,

it may be a big company

0:06:390:06:45

but they can't afford to lose money

and very often when people go down

0:06:450:06:48

in bankruptcy, they take

other people with them.

0:06:480:06:50

Nick Barr and his wife Jill run

a successful sales business

0:06:500:06:52

which operates across the UK.

0:06:520:06:56

In 2013, he was introduced

to a man called Scott Kidd

0:06:560:06:59

who sold designer clocks

from his Leicestershire company.

0:06:590:07:03

Plausible, very plausible.

0:07:030:07:09

You would, you would - he was just

one of your kind of a naturally

0:07:090:07:12

decent guy on the phone.

0:07:120:07:14

If you asked him a question, he gave

you a straightforward answer.

0:07:140:07:16

He was very, very plausible.

0:07:160:07:18

Nick agreed to become

a sales agent for Mr Kidd,

0:07:180:07:20

selling his clocks to retailers

around the country.

0:07:200:07:23

But, within just a few months,

there were problems.

0:07:230:07:27

Customers started to

get short deliveries.

0:07:270:07:30

Then our payments started to dry up.

0:07:300:07:36

And then you get a little

kind of radar on your,

0:07:360:07:38

your kind of head says hold

on a minute, something's not right.

0:07:380:07:41

Nick was owed £4,000 and customers

began to question his integrity.

0:07:410:07:46

A phone call from another business

owed money by Mr Kidd,

0:07:460:07:49

led Nick to discover a string

of others who hadn't

0:07:490:07:52

been paid either.

0:07:520:07:55

Ian Cover, and his wife

Annemarie run an electrical

0:07:550:07:57

business in Leicester.

0:07:570:08:00

Two years ago, Ian rewired Mr Kidd's

warehouse but was never fully paid.

0:08:000:08:04

It's not uncommon

to be chasing money.

0:08:040:08:07

For any business it's

the bane of the daily

0:08:070:08:10

or weekly exercise you know.

0:08:100:08:13

But after months of being fobbed

off, Ian and Annemarie decided

0:08:130:08:16

to turn detective and

investigate Mr Kidd's past.

0:08:160:08:21

What they discovered

about him shocked them.

0:08:210:08:24

Well, he was a bankrupt,

he was a disqualified

0:08:240:08:27

director and he was actually

on license from prison.

0:08:270:08:30

Yet he was signing

company's cheques.

0:08:300:08:33

He'd been sentenced in 2011 to six

and a half years for doing

0:08:330:08:38

exactly the same thing,

and he was allowed to just

0:08:380:08:40

come out and just carry

on doing what he was doing.

0:08:400:08:45

Mr Kidd had been jailed

after trading fraudulently whilst

0:08:450:08:48

bankrupt, running a string

of companies leaving creditors more

0:08:480:08:51

than a million out of pocket.

0:08:510:08:54

Yet he was able to set up another

company from his prison cell

0:08:540:08:58

and when he was released on licence

halfway through his sentence,

0:08:580:09:01

he went to work for himself.

0:09:010:09:03

Ian and Annemarie eventually got

what was owed to them.

0:09:030:09:06

But Nick remains upaid,

still owed thousands.

0:09:060:09:12

Well, I care because I lost money

and I want other people to not be

0:09:120:09:16

put in that position.

0:09:160:09:17

That's unfair.

0:09:170:09:18

You know I'm a genuine

business person.

0:09:180:09:19

I work hard, I pay my

taxes, I pay my VAT.

0:09:190:09:22

It's unfair that these people

should get away with it.

0:09:220:09:26

Mr Kidd - bankrupt and in prison

- had simply created

0:09:260:09:28

his list of companies

through Companies House, the

0:09:280:09:31

Government's registration service.

0:09:310:09:34

All he'd needed was

a working email address.

0:09:340:09:38

Those that help legitimate

businesses get started,

0:09:380:09:45

are critical of the Government's

lack of scrutiny.

0:09:450:09:47

Companies House don't do any checks

at all on the identity

0:09:470:09:50

of individuals setting up companies.

0:09:500:09:51

All you need to do is provide

an application online.

0:09:510:09:54

There are no checks carried out

to verify the identity or even

0:09:540:09:57

whether those individuals

are genuine individuals,

0:09:570:10:00

and they can come from

anywhere in the world.

0:10:000:10:03

And Companies House

deal with how many?

0:10:030:10:06

42% is the latest figure

of incorporations passing through

0:10:060:10:14

the Government's own service.

0:10:140:10:15

That amounts to how many a year?

0:10:150:10:17

230,000 approximately,

slightly more in fact.

0:10:170:10:20

How many of them would

have undergone checks?

0:10:200:10:22

Absolutely none.

0:10:220:10:23

None.

0:10:230:10:24

None at all.

0:10:240:10:30

The Companies House registration

process relies on honesty.

0:10:300:10:32

And it's the same if

your business fails.

0:10:320:10:34

The bankruptcy process depends

on people coming clean

0:10:340:10:37

about what they can pay

and what assets they have.

0:10:370:10:44

The onus is on the bankrupt to tell

the truth and they must tell

0:10:440:10:47

the truth, that's the law.

0:10:470:10:49

Whatever assets that you have

are sold off by what's called

0:10:490:10:51

the Trustee in Bankruptcy

and your creditors are paid off.

0:10:510:10:56

And that's why it's important that

when people go before

0:10:560:10:58

the Trustee in Bankruptcy,

they have to tell the truth.

0:10:580:11:00

They have to say where their assets

are so that the trustee

0:11:000:11:03

can realise them.

0:11:030:11:05

But as Glenn knows all too well,

that's not always the case.

0:11:050:11:12

Meet Alan Yeomans.

0:11:120:11:15

A Derbyshire businessman

who made his money in property

0:11:150:11:17

before going bankrupt.

0:11:170:11:19

During the process,

he was asked what assets he had.

0:11:190:11:23

Furniture valued

at £300, he replied.

0:11:230:11:27

A watch he valued at £30.

0:11:270:11:30

Oh, and he lived in a green shed.

0:11:300:11:33

The Trustee in charge

of his case believed him.

0:11:330:11:36

It was only when police began

to investigate Mr Yeomans

0:11:360:11:38

for money laundering,

that Glenn Wicks and his team were

0:11:380:11:41

called in to re-examine the case.

0:11:410:11:43

You will remember that Alan Yeomans

told the official receiver

0:11:430:11:46

that he lived in a shed,

in his mum's back garden.

0:11:460:11:49

Right, OK.

0:11:490:11:52

What I am going to show

you is what he actually lives in.

0:11:520:11:55

Oh, my gosh.

0:11:550:11:58

And that's the shed.

0:11:580:12:01

It is probably one of the biggest

sheds I've ever seen.

0:12:010:12:09

Inside this "shed", a six-bedroom

mansion where investigators found

0:12:090:12:11

a treasure trove of fine art

and antique furniture.

0:12:110:12:15

It's complete with its

own disco and a gym.

0:12:150:12:24

And behind a 6 foot oil painting,

a secret door leading

0:12:240:12:27

to another money maker.

0:12:270:12:28

A cannabis farm.

0:12:280:12:29

All of which he was jailed for.

0:12:290:12:33

Well, to be fair to Mr

Yeomans, he wasn't lying,

0:12:330:12:35

he was living in a shed.

0:12:350:12:38

It's misleading the official

receiver at the very least to say

0:12:380:12:40

he lived in a shed when in fact

he called his property

0:12:400:12:43

Shedley Manor.

0:12:430:12:46

I can't quite believe the scale

of it, and the audacity of it.

0:12:460:12:49

He was sticking two

fingers up to you guys

0:12:490:12:51

and the system at every turn.

0:12:510:12:53

This was ruthless fraud.

0:12:530:12:54

This was a man who deliberately set

out to defraud his creditors and did

0:12:540:12:57

it until he got caught.

0:12:570:13:02

nobody says, "Let me go and see it.

0:13:020:13:03

let me check."

0:13:030:13:06

Not on this occasion, no.

0:13:060:13:10

Trustees always used to do that,

or very often had the ability to do

0:13:100:13:17

that, but now there's just so many

bankruptcies and so much debt

0:13:170:13:20

that they don't have the ability

to every time go out and check

0:13:200:13:23

what people are telling them.

0:13:230:13:24

So, the process relies

upon the honesty of the person

0:13:240:13:26

being investigated.

0:13:260:13:27

Making it a challenge for those

whose job it is to get money

0:13:270:13:30

back for the creditors.

0:13:300:13:34

What are some of the

tricks of the trade?

0:13:340:13:37

People will give assets away,

transferring property

0:13:370:13:40

into relatives' names

or into company names.

0:13:400:13:44

Creditors will be falsified

and they will be paid so it looks

0:13:440:13:47

as if legitimate debts

are being paid.

0:13:470:13:50

Income will be hidden,

bank accounts will be hidden,

0:13:500:13:52

jewellery will be hidden.

0:13:520:13:55

You can often see a white

line around the wrist

0:13:550:13:57

where the watch has disappeared.

0:13:570:13:59

So people hiding things.

0:13:590:14:01

You get paid out of the pot.

0:14:010:14:04

Is there a time when you have

to call it a day because actually

0:14:040:14:09

you're not convinced you're

going to get that asset

0:14:090:14:11

or realise the money?

0:14:110:14:12

Yes.

0:14:120:14:13

Of course there's a balance.

0:14:130:14:15

There's always

a cost-benefit analysis.

0:14:150:14:19

Perhaps the funds are in

an incredibly difficult regime

0:14:190:14:21

for example and you just are not

going to be able to get them.

0:14:210:14:24

Well, then you just have

to draw a line on it,

0:14:240:14:27

write off the money that you've

spent and move on to the next case.

0:14:270:14:30

The incentive is therefore

on the dishonest debtor to make it

0:14:300:14:33

as complex as possible?

0:14:330:14:35

Yes, but I mean they're fraudsters.

0:14:350:14:36

That's what they want to do.

0:14:360:14:38

They want to keep the money

for themselves and not

0:14:380:14:40

pay their creditors and not

pay the government.

0:14:400:14:43

For those who do get caught,

they face the severest sanction

0:14:430:14:46

possible - a Bankruptcy Restriction

Order.

0:14:460:14:50

For up to 15 years, you're banned

from being a director,

0:14:500:14:55

you can't form or manage a company,

or get credit over £500.

0:14:550:14:58

More than 1,200 BROs have been

imposed across the UK.

0:14:580:15:02

Effectively forcing those

who receive them to take a backseat

0:15:020:15:05

in the business world.

0:15:050:15:09

But what about those for

whom the backseat simply won't do?

0:15:090:15:16

The seaside town of

Dunoon, in Argyllshire.

0:15:240:15:30

Home to ferries, fish

suppers and the finest

0:15:300:15:32

radio show this side

of, well, Dunoon.

0:15:320:15:36

Live and local.

0:15:360:15:38

Come on in, pull up a chair.

0:15:380:15:41

It's just me - Malcolm,

on DCR 97.4 FM and Tune-In Radio.

0:15:410:15:47

These are the dulcet tones

of DJ Malcolm Scott.

0:15:470:15:52

Swearing gives you a sense of calm,

control and well-being.

0:15:520:15:57

Every week, he entertains his loyal

listeners with his modern classics.

0:15:570:15:59

Let's have a bit of Corner Shop...

0:15:590:16:02

Hellloooo...

0:16:020:16:04

This is Malcolm here, hello...

0:16:040:16:09

He may sound like Dunoon's

answer to Alan Partridge -

0:16:090:16:13

but he's actually

kind of a big deal.

0:16:130:16:17

Malcolm Scott was a

multi-millionaire grain merchant.

0:16:170:16:21

One of the biggest donors

to the Conservative Party,

0:16:210:16:23

he lent his private jet to some

of its biggest figures.

0:16:230:16:28

Former Prime Minister David Cameron

used it to fly from Glasgow

0:16:280:16:30

to Gatwick and Dundee to Oxford.

0:16:300:16:34

And Mr Scott's close friend

William Hague also benefited.

0:16:340:16:37

He used the plane a number

of times, including to fly

0:16:370:16:40

to the Ulster Unionist Party

Conference in Belfast.

0:16:400:16:44

This journey valued

at almost £4,000.

0:16:440:16:47

He was even the party's

Treasurer in Scotland.

0:16:470:16:51

In 2012, his business empire came

crashing down and he was declared

0:16:510:16:56

bankrupt with debts of more

than £41 million.

0:16:560:16:59

I think we'll finish at that.

0:16:590:17:03

During the bankruptcy investigation,

Mr Scott led the trustees on a very

0:17:040:17:07

deceitful dance indeed.

0:17:070:17:10

He hid a speedboat, wine collection,

fishing rights, assets

0:17:100:17:13

in the Bahamas and even claimed

a break-in at his house,

0:17:130:17:17

some items later found

being sold at auction.

0:17:170:17:20

He failed to account

for the proceeds.

0:17:200:17:23

And all the while he

was trustee director

0:17:230:17:25

of the Crimestoppers charity.

0:17:250:17:29

By 2015, the authorities had had

enough and Malcolm Scott

0:17:290:17:32

was hit with a lengthy

Bankruptcy Restriction Order.

0:17:320:17:36

Until 2021, he's banned

from being a company director.

0:17:360:17:39

From even forming a company.

0:17:390:17:43

The thing is, I've been keeping

a very close eye on Mr Scott

0:17:430:17:46

and whatever he's doing,

he's not taking

0:17:460:17:49

a backseat in business.

0:17:490:17:53

Every few weeks he travels

from his home in the west coast

0:17:530:17:56

of Scotland to Northern Ireland.

0:17:560:18:01

I watch as he visits development

site after development site.

0:18:010:18:05

All bought at auction and Malcolm

Scott with the keys to them.

0:18:050:18:09

Everywhere he goes, I follow,

including to a solicitors'

0:18:090:18:12

office in Coleraine.

0:18:120:18:15

What is he doing in there?

0:18:150:18:20

I then watch as he heads

to this large development

0:18:200:18:23

in Dervock, in County Antrim.

0:18:230:18:26

He greets the builder,

surveys the site.

0:18:260:18:28

He looks like he's the boss.

0:18:280:18:34

Now, the paperwork for this housing

company shows it's owned by a man

0:18:340:18:38

called Alexander Duncan.

0:18:380:18:40

It's a company called Sandnewco Ltd

- he's listed as the director.

0:18:400:18:43

When you look at the other

companies that he's got,

0:18:430:18:46

he makes board games.

0:18:460:18:46

This is a housing development,

and it's a big one at that.

0:18:460:18:52

I wonder whether Malcolm Scott's

really the director of this company.

0:18:520:18:58

Maybe not on paper, but I wonder

whether he's a shadow director.

0:18:580:19:02

Is he breaching his

Bankruptcy Restriction Order?

0:19:020:19:06

To try and find out,

I arrange for a member

0:19:060:19:10

of our production team to meet

with Malcolm Scott.

0:19:100:19:14

He'll go undercover,

posing as a potential investor,

0:19:140:19:17

to hear what Mr Scott says

about the business.

0:19:170:19:21

The important thing is you need to

ask what the company structure is.

0:19:210:19:25

After weeks of negotiations,

Mr Scott finally agrees

0:19:250:19:28

to a meeting in Northern Ireland

at the Dervock site.

0:19:280:19:32

Hi.

0:19:320:19:33

Hello.

0:19:330:19:36

Malcolm - nice to meet you.

0:19:360:19:37

Not bad at all.

0:19:370:19:39

Nice to meet you,

you're looking well.

0:19:390:19:40

He starts by explaining

the structure of the company.

0:19:400:19:42

It's Sandy and myself.

0:19:420:19:43

He's a silent partner.

0:19:430:19:46

He's got another business

making board games.

0:19:460:19:48

Oh, I see, right.

0:19:480:19:49

He's not even into property at all?

0:19:490:19:51

Eh, no.

0:19:510:19:52

No, he does board games.

0:19:520:19:53

Brilliant.

0:19:530:19:54

Will he be somebody

who I need to meet as well?

0:19:540:19:57

No.

0:19:570:19:58

It's me and him, we're 50/50.

0:19:580:19:59

Excellent.

0:19:590:20:01

Excellent.

0:20:010:20:02

I'm just wondering like, if this

all comes good - No, no, no, no.

0:20:020:20:05

I can make the decision

with you now.

0:20:050:20:07

Oh, right.

0:20:070:20:08

Excellent.

0:20:080:20:09

Well, that's good to know.

0:20:090:20:10

Under Malcom Scott's BRO he's banned

from managing a company or even

0:20:100:20:13

giving the impression

he is managing a company.

0:20:130:20:15

Yet here he is stating

he's the decision-maker.

0:20:150:20:18

So where does he rank

in the company hierarchy?

0:20:180:20:26

On the more corporate side

of things, you've got BLEEP

0:20:260:20:32

and then next one up...

0:20:320:20:34

Me.

0:20:340:20:35

You.

0:20:350:20:36

Me, yes.

0:20:360:20:40

And that's it,

you are the Head Shed.

0:20:400:20:42

Yes.

0:20:420:20:44

Yes, that's it.

0:20:440:20:45

Exactly.

0:20:450:20:47

So a disgraced, dishonest and banned

director appears to be running this

0:20:470:20:50

housing development,

acting as a shadow director

0:20:500:20:52

and using a clean frontman

for the paperwork.

0:20:520:20:53

A direct breach of his BRO.

0:20:530:20:56

And, apparently, it doesn't

just stop at Dervock.

0:20:560:20:59

And we have got a massive

site in Glasgow.

0:20:590:21:01

Right.

0:21:010:21:02

So, we're going in for planning

on that next year for 300 houses.

0:21:020:21:06

Wow!

0:21:060:21:07

So, I can let you see that.

0:21:070:21:09

An offer too good to pass up.

0:21:090:21:13

And this is the site,

in Netherburn in central Scotland.

0:21:130:21:20

It's a big piece of land - 32 acres,

16 of which already have planning

0:21:200:21:23

permission for housing.

0:21:230:21:26

Malcolm Scott arrives for a second

meeting with our investor.

0:21:260:21:32

How are you?

0:21:320:21:33

Not bad, yourself?

0:21:330:21:34

He outlines his plans

for hundreds of homes.

0:21:340:21:38

You've got another 100

to 150 units in there.

0:21:380:21:44

I see, right ok.

0:21:440:21:46

And then another 100 there.

0:21:460:21:47

Right, got you.

0:21:470:21:48

Interestingly, the drawing Mr Scott

shows us has the name

0:21:480:21:51

of a different company on it.

0:21:510:21:52

Instead of Sandnewco One Ltd,

as at Dervock, this time

0:21:520:21:59

it's Loch Leven Two.

0:21:590:22:02

So is there a Loch

Leven One as well?

0:22:020:22:04

There's a Loch Leven

One at Galashiels.

0:22:040:22:06

Right, and is that yours as well?

0:22:060:22:08

Yes, yes.

0:22:080:22:09

Yeah.

0:22:090:22:10

How many have you got?

0:22:100:22:13

That's, well we've got

four at the moment.

0:22:130:22:18

If this is true, it would appear

Malcolm Scott is a serial

0:22:180:22:21

breacher of his BRO.

0:22:210:22:22

And why not?

0:22:220:22:25

From what he says,

the rewards are worth it.

0:22:250:22:28

How much are you looking

to take on each?

0:22:280:22:31

We are looking at, if we have

developed it out ourselves,

0:22:310:22:34

£15 million.

0:22:340:22:35

£15 million?

0:22:350:22:36

Off this site.

0:22:360:22:37

Yeah.

0:22:370:22:38

Right, got you.

0:22:380:22:39

Worth waiting for, isn't it.

0:22:390:22:40

Yes, exactly.

0:22:400:22:43

And so, with sales pitch complete

and a firm handshake goodbye,

0:22:430:22:47

Malcolm Scott drives off.

0:22:470:22:51

Just a few days after our

meeting and Mr Scott's

0:22:510:22:55

visit to the solicitors

in Northern Ireland

0:22:550:22:57

begins to make sense.

0:22:570:22:59

I find a new business

on Companies House.

0:22:590:23:03

Its registered address,

the solicitor's office.

0:23:030:23:05

It's called Northside Residential.

0:23:050:23:07

It's another property business.

0:23:070:23:09

Now, this time, he's

gone one step further.

0:23:090:23:12

He lists himself as a person

with significant control

0:23:120:23:16

in the company, giving himself 50%

of the shares.

0:23:160:23:19

Now that's perfectly legal.

0:23:190:23:22

But, he also registers

himself as the person

0:23:220:23:25

who formed the company.

0:23:250:23:27

And that isn't legal.

0:23:270:23:33

Looking at all of our evidence

is insolvency expert Maureen Leslie.

0:23:330:23:37

She's acted as a Trustee in some

of the country's biggest

0:23:370:23:39

bankruptcy investigations.

0:23:390:23:41

He's holding himself out as

the decision-maker in the company.

0:23:430:23:47

I mean he says there

is no one above him.

0:23:470:23:50

You're not allowed to be a director.

0:23:500:23:53

He's not a named director, but he's

acting as if he were a director,

0:23:530:23:57

or he is allowing someone to form

the perception that

0:23:570:24:00

he is a director.

0:24:000:24:02

Let me show you this.

0:24:020:24:05

We saw him go into a solicitor's

office and a few weeks

0:24:050:24:10

later this company was formed.

0:24:100:24:12

Any red flags there for you?

0:24:120:24:15

He's just formed a limited company.

0:24:150:24:22

And he's a person with

significant control.

0:24:220:24:27

The Bankruptcy Restriction Order

does not allow you to

0:24:270:24:32

form a limited company.

0:24:320:24:34

That's what he's gone and done?

0:24:340:24:35

Yeah.

0:24:350:24:39

That is a breach of the terms

of the Bankruptcy Restriction Order.

0:24:390:24:45

Breaching a BRO can lead to a jail

sentence of up to two years.

0:24:450:24:52

This is the head of the government

agency in Scotland which gave

0:24:520:24:55

Malcolm Scott and others

like him their Bankruptcy

0:24:550:24:57

Restriction Orders.

0:24:570:24:59

For the rest of the UK,

it's the Insolvency Service

0:24:590:25:01

which issues them.

0:25:010:25:02

Who monitors BROs?

0:25:020:25:06

There is no positive

monitoring of BROs.

0:25:060:25:11

We rely on creditors to take account

of the fact that there is that

0:25:110:25:14

public record of the red flag

against these debtors and we would,

0:25:140:25:18

of course, follow up any information

about debtors breaching the terms

0:25:180:25:21

of their BRO directly.

0:25:210:25:23

Nobody is monitoring them?

0:25:230:25:26

Not proactively, no.

0:25:260:25:28

Not actively?

0:25:280:25:31

Yeah.

0:25:310:25:35

Do you see the kind of weaknesses

that I'm highlighting here?

0:25:350:25:44

It's like tagging somebody

with an electronic tag for bad

0:25:440:25:48

behaviour but actually it's not

linked to anything,

0:25:480:25:51

so what's the point?

0:25:510:25:53

Well, I would disagree.

0:25:530:25:55

The record is there,

it is publicly available,

0:25:550:25:58

it's easily searchable

and when the particular debtor tries

0:25:580:26:00

to apply for credit that

flag will clearly show.

0:26:000:26:04

I ask him about Malcolm Scott

and our evidence of him

0:26:040:26:07

appearing to breach his BRO.

0:26:070:26:11

Leaving aside the particular case,

if people are breaching their BROs,

0:26:110:26:13

yes, that is serious.

0:26:130:26:16

I'll take away the evidence that

you're prepared to provide us

0:26:160:26:19

and we'll have a look at,

look at the case and I can't say

0:26:190:26:23

anything further than that.

0:26:230:26:24

There is no suggestion of any

wrongdoing on the part

0:26:240:26:27

of the solicitor's firm in Northern

Ireland.

0:26:270:26:31

Alexander Duncan, the registered

director of Sandnewco One Ltd,

0:26:310:26:35

told us that Malcolm Scott

was an employee of the business,

0:26:350:26:40

with no executive

decision-making authority.

0:26:400:26:45

We asked Malcolm Scott

for a statement and through his

0:26:450:26:49

solicitor he denied acting

as a director of any company.

0:26:490:26:54

How effective do you think

the system is currently?

0:26:540:26:57

I think it could be

a lot more effective.

0:26:570:27:01

An independent trustee will have not

only the specialism and the resource

0:27:010:27:06

to be able to conduct complex

investigations but also

0:27:060:27:09

they are more flexible in terms

of resourcing and the skills

0:27:090:27:12

that they can bring to a case.

0:27:120:27:14

The insolvency service,

in your opinion, doesn't have that?

0:27:140:27:16

I don't think any government

organisation will be able to do that

0:27:160:27:19

so flexibly and so quickly.

0:27:190:27:22

So the unscrupulous

become the untouchable?

0:27:220:27:24

Sometimes that's true.

0:27:240:27:29

There are serial fraudsters out

there who, who are the clever ones

0:27:290:27:32

and I'm convinced we don't know

who they are.

0:27:320:27:34

It's only the ones who make

a mistake and leave a paper trail

0:27:340:27:39

that allows us to investigate them

and to bring them to justice.

0:27:390:27:45

My investigation has

revealed a bankruptcy system

0:27:450:27:48

fraught with problems.

0:27:480:27:52

A lack of resourcing, regulation,

a lack of monitoring

0:27:520:27:56

and robust punitive measures.

0:27:560:28:01

The government is quick to say

that business is key

0:28:010:28:03

to a healthy economy.

0:28:030:28:12

But allowing the unscrupulous

to flourish puts that at risk.

0:28:120:28:22

Download Subtitles

SRT

ASS