UK investors duped over anti-terror shares

At least 170 British investors were allegedly duped out of £30m (€45.6m) by US fraudsters who convinced them they were helping to fight the war on terror, it emerged today.

Three alleged fraudsters have had assets seized in the United States and another man has been arrested in London, authorities in both countries said.

They offered investors shares in defence firms, and guaranteed a sizeable, fast return.

Among the assets seized from the US defendants were a £1.1m (€1.7m) yacht, moored in Miami and named “Private Equity”, two Mercedes-Benz cars, a valuable painting and several bank accounts.

A civil lawsuit was filed in a court in Newark, New Jersey, in February, but details were withheld because Scotland Yard was completing an undercover investigation in London.

A Yard spokesman confirmed that a 34-year-old man had been arrested this week in connection with the inquiry and had been bailed to return pending further inquiries.

New Jersey Attorney General Peter Harvey said: “These defendants preyed on British investors by appealing to their patriotism and fears regarding terrorism,”

The Britons are seeking restitution, forfeiture of illegal profits and unspecified fines against the accused.

Investigators so far say 170 investors who purchased more than £30m (€45.6m) worth of securities from the defendants.

Lawyers for the investors said the defendants, who are not registered to sell securities in New Jersey, solicited funds from British nationals through magazine advertisements and telephone pitches.

The defendants allegedly named a New Jersey-based private equity firm – Clover Capital Management – as a specialising in financing private companies.

They claimed to be selling shares in defence and aerospace contractors or in investment companies that invested in those industries, authorities said.

Investors were promised large guaranteed returns because the sector was booming due to the war in Iraq and the so-called war on terror.

But most investors have failed to make a penny.

Meanwhile, the defendants used the millions to furnish lavish lifestyles, according to the lawsuit by the state Bureau of Securities, filed in the Superior Court in Newark.

Authorities said the scam dated back to 2001.

The accused include Hebert Mario Figueroa of Old Tappan, New Jersey, and Carmine Russo and Thomas Russo, both of Hackensack, New Jersey.

Companies named in the suit include Clover Management Group, which Figueroa founded, along with Clover Merchant Group LTD; Clover Defense Partners LP; Clover JCM Defense Partners LLC; Clover Capital Management LLC; CMG Advisors LLC, and Clover International Advisors, all of which were based in Fort Lee, Newark.