Pub hosts faced ruin after loan fraud

Booming business: Colin and Julie Stoneley worked out another deal to secure pub

Two hosts faced bankruptcy and were forced to live in a friend’s spare room for three months after being caught in the clutches of a multi-million pound fraudster.

Colin and Julie Stoneley became homeless after obtaining finance to buy the Merry Harriers in Hambledon, Surrey, in 2008, with London-based Gresham Ltd.

The firm was falsely promoted as a long-established financial organisation capable of lending hundreds of millions of pounds.
Lord Edward Davenport, 45, of London, was named as the mastermind of the “advanced fraud scheme” in which scores of businesses were ripped off for hundreds of millions of pounds.

He was jailed last month for seven years and eight months along with Peter Riley, 64, of Brentwood, Essex. They were found guilty of conspiracy to defraud. The duo made money by asking clients to pay thousands for ‘due diligence’ and deposit fees.
Colin saw a national press advert and called the company looking for a £300,000 loan against his home in Spain. The couple paid Gresham Ltd £14,000 for upfront fees and due diligence including surveyor costs. However, the day they exchanged contracts the money did not arrive.

“We called Peter Riley and he said it was held up with an accountant in Monaco called Louis Martin. However, it seems this accountant never existed. He promised us the money the next Monday, but six weeks later we were facing bankruptcy,” he added.

“There were a lot of excuses. We had moved out of our cottage and had to stay in a friend’s room for three months.”

The Stoneleys went to the company offices in Portland Place, London, to confront Riley. “He was still plausible and promised to divert more money,” said Colin.

However, a few weeks later there was no sign of it and they wrote the firm a letter threatening to go to the police if they did not refund the £14,000. “We were small fry to them,” added Colin.

“We were lucky. We talked to the Serious Fraud Office and we were the only people to get our money back.”

The couple worked out another financial deal to get into the pub and claim business has boomed since they took it on in 2008.

“We were not naive. We looked at legal ads in broadsheets and they were very plausible,” added Colin. SFO launched probe following complaints

SFO probe

The Serious Fraud Office (SFO) opened an investigation into Gresham in September 2009 after complaints from victims, including Elizabeth Emanuel, the designer of Princess Diana’s wedding dress.

During the case Judge Testar described the Gresham operation as a “professional and sophisticated fraud that did a huge amount of damage… victims suffered crippling losses”.

He described Riley as “a very accomplished conman at the sharp end of the fraud” who had “spun a web of elaborate lies to explain why the money had not come”.