Scottish director gets 14-year ban for US oil and gas investment scam worth almost £3 million

The director of a Scottish firm who conned US oil and gas investors to invest through his company has been given a 14-year ban.

The Glasgow director took millions from UK investors, assuring them of investing it in American oil and gas companies through a Ponzi scheme.

On September 8, the British Insolvency Service announced that 52-year-old Kenneth James Campbell from Glasgow was banned from being the company director of HGEC Capital Limited. On August 16, an Edinburgh court session found Campbell guilty of duping UK investors with £2.8 million.

Instead of investing the money in US oil and gas companies in Texas, USA, Campbell spent £2.8 million. He was the sole director of HGEC Capital Limited at the time.

HGEC Capital made bold claims of investing in petroleum and natural gas extraction until it went into liquidation in February 2020. The company duped investors from March 2018 to February 2020.

After the company filed for liquidation, some of the investors raised complaints against HGEC Capital, leading to an insolvency service investigation. The Edinburgh Court found Campbell took millions from investors from June 2018 to February 2020.

Further investigation revealed the Ponzi scheme run by HGEC Capital as Campbell utilised funds from new investors to compensate some of the interest payments of the existing investors.

The benefactors of the US oil and gas investment scam

While most of the money was sent via third-party players, Campbell diverted hundreds of thousands of it to himself. Out of the £2.8 million raised from the investors only £430,000 were actually invested.

Along with Campbell, many others benefitted from the Ponzi scheme including Scotland and Rangers goalkeeper Allan McGregor's wife Cheryl McGregor who got £700,00. The director of another company got £526,000.

A gratuitous alienation claim filed against Cheryl McGregor could recover £900,000.

This type of claim is made against money allocated when the benefactor is insolvent.

While HGEC consultants were paid £360,000 Campbell himself pocketed £194,000 as payments, revealed the investigators. All these led to the total loss of £2.8 million by the investors.

People lose life savings in the Ponzi US oil and gas investment scheme

The court has held Campbell responsible for the entire duping scheme as no evidence of wrongdoing by anyone else emerged in the investigation. Campbell was the only one handling HGEC Capital's finances.

Speaking about the matter, the Chief Investigator of Insolvent Investigations North at the Insolvency Service, Rob Clarke said that people lost their life savings because of this deceit.

Clarke underlined that most of Campbell's victims were ordinary citizens, not big investors.

Clarke highlighted how Campbell took money from people at the opportune moment when he knew that there wasn't any possibility of an investment.

The Chief Investigator went on to elaborate on the nature of the insolvency and the seriousness of the matter as witnessed by the lengthy process of disqualification.

Clarke further said: that this ban should deter others from committing similar crimes. Through this case, the insolvency service wants to assure the UK public that strong action is taken against such fraudsters.

Since Kenneth James Campbell and his company HGEC Capital has declared bankruptcy the Insolvency Service team can't recover the money from his assets. Campbell's 14-year disqualification started on September 7.

According to the Company Directors Disqualification Act 1986 (CDDA), Campbell has been prevented from acting as a director of the HGEC Capital. The ban also prohibits him from promoting the company or being involved in any promotional activities of the company.

He can't be part of the management of HGEC Capital. Furthermore, any attempts at the formation of the company by Campbell needs prior approval from the court.

As per the law, he can't change his job description and work for HGEC Capital. The ban also prevents him from hiring other people to manage the company under his jurisdiction. Any attempt to do so will lead to the prosecution of those involved.