Accountant convicted for £356m Langbar fraud
Accountant and former Langbar CEO Stuart Pearson was jailed last month for falsely claiming that his company had £356m in assets with Banco do Brasil.
A chartered accountant and former Baker Tilly partner, Pearson was sentenced to 12 months in jail for his part in the fraud and disqualified from being a company director for five years. He was acquitted on 10 other counts of making a misleading statement, contrary to s397 of the Financial Services and Markets Act 2000.
A confiscation hearing will take place on 1 August. No other individuals have been charged in connection with the investment fraud, which came to light in 2005. The company’s legal adviser, Nabarro Wells, was fined £250,000 for due diligence failures in 2007.
Pearson’s crime was to have issued regulatory statements and told analysts the company had assets with Baco do Brasil after officials at a Spanish bank had notified his company that the certificate it used to back the claims was false.
“His background meant that he would have been fully cognisant with the strict requirements and standards demanded of companies publishing information to the market,” the Serious Fraud Office commented in an official statement on the case.
Previously known as Crown Corp, the company was formed in Bermuda in June 2003 and gained a listing on London’s Alternative Investment Market. It issued a series of announcements detailing profitable contract wins, but didn’t really attract the attention of investors until 2005 it backed into Pearson’s company Langbar, took on its name and appointed the accountant as CEO.
In a lengthy analysis, The Guardian characterised Pearson as “little more than a patsy” for the shadowy investors who constructed the phantom investment vehicle.