Luke Johnson linked to toxic bonds tycoon

THE marketing boss at the centre of the London Capital & Finance savings scandal once owned a business with beleaguered entrepreneur Luke Johnson.

Paul Careless and Johnson ( pictured) were shareholders in an advice firm called Legalcare, which went bust in 2015 following a string of complaints about its behaviour.

Careless is under fire after his companies raked in huge fees by selling toxic bonds on behalf of collapsed savings firm LCF, which went bust in January owing £237m to 11,500 people. LCF is being probed by fraud investigators.

Former Channel Four chairman and Pizza Express tycoon Johnson has been saddled with huge losses after his cake shop chain Patisserie Valerie went bust due to an alleged fraud by another director.

Company records show that Careless took control of Legalcare in 2012, with Johnson taking a 10pc stake the following year. Johnson was not a director and did not play any executive role in the company. The business sold a subscription service where customers had access to a solicitor on demand over the internet.

It even offered a two-week free trial, marketed through a video campaign which claimed: ‘You’ll only get as much justice as you’re willing to pay for.’

But customers complained about huge difficulties cancelling subscriptions and heavyhanded tactics when they refused to pay. Other users claim to have been hounded by debt collectors and threatened with court action.

The firm went bust in 2016 with an estimated £129,000 of debts. Insolvency firm Freeman Rich, tasked with liquidating Legalcare, said there were ‘ significant withdrawals’ of cash before its collapse. Freeman Rich secured a £120,000 payment from former directors to settle claims the business unlawfully paid out dividends. Directors included Careless and his associate Stephen Jones, neither of whom is accused of any wrongdoing at Legalcare or LCF.

Careless, a former policeman, is behind firms which ran a marketing campaign on behalf of LCF, encouraging customers to buy its bonds in exchange for returns as high as 8pc. The 43-year-old’s companies took as much as 25pc of savers’ money in fees netting £58m.

Savers thought the money was being invested in hundreds of companies but it went to just 12 firms and was spent on high-risk investments such as a helicopter, stables and a holiday development. Careless’s firms were not involved in any investment decisions and he declined to comment. Johnson, who has no involvement with LCF, declined to comment but sources said that he backs many firms, and not all succeed.