Boris Johnson vowed to help victims of the £10 billion Government-sanctioned pension scams four years ago, Money Mail can today reveal — but as of yet his promises have proved empty.
After meeting workers fleeced of their futures in the scandal, the now Prime Minister pledged to take up their case to find out why HMRC had ‘approved’ rogue retirement schemes.
But victims say they did not hear from him again — despite attempts to arrange further meetings — and years on they are no closer to getting justice.
Empty promises: Boris Johnson with David Burgess, left, Sue Flood and Micky Nettle
The revelation comes after the Mail last week revealed how tens of thousands of workers lost their retirement savings in the almost decade-long scam.
Army veterans, police officers, firemen, ambulance staff, care workers and teachers were among those who agreed to transfer their nest eggs to the rogue schemes because they were enrolled with HMRC and the Pensions Regulator — making them appear above board.
Employers including the Ministry of Defence, the NHS and the Royal Mail also approved the transfers because the schemes were officially registered.
But a 2006 government rule change aimed at bringing ‘security, dignity and comfort in old age’ meant scammers could enrol pension schemes with HMRC online in minutes — and with virtually no checks — in what MPs described as a ‘scammers’ paradise’.
In a second blow, some victims also face hefty fines because many of the bogus schemes broke tax laws and are being targeted with big bills by HMRC even though it approved the schemes in the first place.
The Mail can also reveal a string of other blunders surrounding pension schemes that caused untold misery to thousands of families, including how:
- HMRC kept pension schemes on its register for months after launching a criminal investigation into fraudsters administering them — during which time more than 100 victims unwittingly moved their savings into them.
- Tax officials privately raised concerns and started looking into the legality one of the first major pension scams but took no action for months while 300 more people signed up and lost millions.
- Government departments and private companies approved transfers of staff pension pots to scam schemes for years despite explicit warnings to be ‘vigilant’ from the regulator.
- A policeman fleeced out of his pension by an HMRC- registered scam said he faced a ‘nightmare’ trying to get anyone to investigate the fraud.
When newly elected as MP for Uxbridge, Mr Johnson spent 45 minutes with workers who lost all their retirement savings in the HMRC- registered Ark scheme, where almost 500 people lost £25 million.
The rogue pension scheme was later ruled by a judge to be illegal and a ‘fraud on the trustees’ powers’.
The meeting was arranged by his constituent David Burgess, who lost his £38,000 pension to Ark after trusting it because it was registered with HMRC and the Pensions Regulator.
Two months after the October 2015 meeting, Mr Johnson wrote to Mr Burgess to say he would raise the ‘serious concerns’ with David Gauke, then Financial Secretary to the Treasury.
As the scheme was registered with HMRC, he said he would write to its then chief executive Lin Homer to ‘question the approval process and the criteria for approval’, he said.
He added: ‘As soon as I have received their responses, I will ensure you are kept informed.’
But auto worker Mr Burgess says: ‘That’s the last correspondence we had. I’ve tried on numerous occasions to try to get another meeting without success.
‘It’s just shocking what happened. Without the support of others in the same situation I would be at breaking point.
‘I’m 52 so I want to think about retiring. Some of the victims are retirement age and left without a pension.’
One of his colleagues who also signed up to the scheme lost £180,000 and has had to sell his house, he says.
‘I just wish I could turn back the clock. Ark is just one scheme and there are many more out there. I hope that now Boris is in No 10 that he will do something. It’s long overdue.’
Another attendee at the meeting, and also pictured with Mr Johnson was Sue Flood, who has described enduring years of hell after she and her partner lost £125,000 in the Ark scheme.
They are now being pursued by HMRC regarding tax bills of £60,000.
The victims had previously had several meetings with then Work and Pensions Secretary Iain Duncan Smith, who wrote to one of his constituent victims in December 2014 saying: ‘There is a case [for HMRC] to reconsider their position for those who were impacted by their previous registration process.’
A No 10 source said Mr Johnson had followed up with Mr Gauke and Ms Homer as he had promised to do, to highlight what had happened and to push his constituent’s case.
And former Home Secretary Jack Straw raised the issue with Mr Gauke in parliament in May 2005 after being contacted by one of his constituents who was a victim of Ark.
He said: ‘It seems to me that my constituent has been the innocent victim of an elaborate and sophisticated arrangement designed to evade our pension laws. I have no sympathy for the architects of the scam or for those advising them.’
Mr Gauke responded that it was a difficult case and it was ‘hard not to be sympathetic’ to those who joined Ark.
‘HMRC’s role is to ensure that the tax system is being complied with. It is not there to perform a role of consumer protection but to ensure that pensions are not liberated, and we have made a number of changes in recent months to strengthen its powers in that area.’
A painstaking investigation by the Mail discovered at least 105 rogue pension schemes registered with HMRC and the Pensions Regulator.
After the Government belatedly tightened checks on UK based schemes, scammers started operating abroad using overseas pensions listed with HMRC to give their cons the appearance of respectability.
An HMRC spokesperson said: ‘HMRC cannot and does not authorise pension transfers.
‘Pension schemes which individuals are currently with are responsible for carrying out due diligence on transfers to other pensions schemes and ensuring they comply with the legislation.
Through a strong governance process implemented in 2014, we can quickly de-register schemes set up to avoid pensions tax rules where we have sufficient evidence.’
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