£10BN ROGUE PENSIONS SCANDAL

Thousands lose nest eggs in schemes sanctioned by HMRC ++ Scammers faced minimal checks ++ Yet now, taxman threatens VICTIMS with fines

Tens of thousands of workers have lost up to £10billion of savings in Government-sanctioned pension scams.

Army veterans, police officers, firemen, paramedics, care workers and teachers were among those fleeced under an almost decade-long loophole.

Most agreed to transfer their nest eggs to the rogue schemes because they were enrolled with HMRC and the Pensions Regulator – making it appear above board. employers – including the Ministry of Defence, the NHS and the Royal Mail – approved the transfers for the same reason – that the schemes were officially registered.

Yet under rules introduced by Tony Blair’s government in 2006, HMRC enrolment could be secured online in minutes – and with virtually no checks.

MPs described it as a ‘scammers’

paradise’. In a second blow, the victims face hefty fines because many of the bogus schemes broke tax laws.

They are being targeted with big bills by HMRC even though it registered the schemes in the first place.

The Mail can today expose the extraordinary scale of the scams and the official failures that allowed them to flourish. From a painstaking study of records, we have identified at least 105 rogue pension schemes registered with HMRC.

The ‘industrial level’ con is suspected of targeting hundreds of thousands of savers – costing them up to £10billion between them.

Victims cheated of their nest eggs said every day was a ‘slow torture’ with the constant terror of losing their homes and going bankrupt.

Soldiers suffering traumatic stress after serving in Iraq and Northern Ireland face having to work until their eighties. Some victims have been hounded at their homes by bailiffs sent by HMRC.

Because many of the scam schemes destroyed or never kept records of members, it is feared some victims are still unaware their pension has vanished. Others will not discover the truth until they reach retirement.

The Financial Conduct Authority has warned that more than five million individuals may fall prey to pension scammers. MPs and campaigners demanded a public inquiry and accused HMRC of ‘profiting from the proceeds of crime’. Our investigation also found that: A detective investigating a possible fraud told the Mail that stealing a pension was easier than stealing a TV because of lax regulations;

Scammers took huge fees to transfer pensions, then repeatedly reinvested the savings into high risk investments that paid the them hefty commissions until the nest eggs were obliterated;

A Government pensions adviser made millions from his involvement in five scam schemes that destroyed hundreds of lives;

Scammers using HMRC listed pension schemes continue to fleece thousands of savers a year.

The number of pension scams multiplied after April 2006 when the Blair government introduced a ‘simplification’ of the rules to bring ‘security, dignity and comfort in old age’.

The previous system of checking trustees before granting them ‘approved’ status was switched to online registration that automatically confirmed the status of a scheme. Tax reference numbers were often granted within 24 hours. The scammers launched sales blitzes, often using cold calling to offer targets free ‘pension reviews’ before proposing switching existing pensions to another ‘more lucrative’, but still Government registered, scheme.

The Mail has seen scores of emails and brochures produced by rogue schemes where they emphasise that they are registered with HMRC and the Pensions Regulator as their main selling point.

When they convinced victims to move their retirement savings, the only significant check their existing pension scheme made before transferring the cash was to ensure the new scheme was HMRC registered.

The Mail identified 8,000 victims from 105 schemes based on publicly available figures, but a Pensions Regulator source said the full number is probably more than 100,000.

Margaret Snowdon, of the Pensions Scams Industry Group, said: ‘What we have seen so far is likely the very tip of the iceberg.’ From talking to insurers, administrators and trustees, she estimates the full figure for all such scams could be £10billion.

Andy Agathangelou of the Transparency Task Force, which campaigns for greater openness in financial services, said: ‘We are not just not talking about dodgy characters. There was systematic, industrialscale scamming.

‘The changes to the registration system made it a crooks’ paradise.’

The MoD, which agreed to transfer servicemen’s pensions, said it moved funds only to schemes ‘approved by HMRC’. HMRC said it registered

‘Profiting from the proceeds’ ‘Not just dodgy characters’

pension schemes for tax purposes and did ‘not regulate pensions’.

It said that it changed its processes for scheme registration applications in October 2013 and online applications were now ‘fully risk assessed’ before a decision is made on whether to register them.

The following year HMRC also introduced a ‘fit and proper’ person check allow it not to register a scheme, or to de-register an existing scheme.

But Miss Snowdon said the prior ‘registration free-for-all’ meant there could be still be many ‘sleeper cell’ schemes that scammers are still using to target victims today.

A spokesman for the Pensions Regulator said: ‘On many occasions we have put independent trustees in charge of scam schemes to prevent criminals draining away victims’ savings and we have a number of ongoing major criminal investigations into pension fraud worth tens of millions of pounds.’