How I lost $250,000 with Barry Payne of Easyqrops

This month's tale shines a light on the darker side of humanity. It's a story of deception that led a foolish man to lose everything. A sequence of events showing how things are never as they seem.

You’re working class trash. How did you ever accrue such an amount?

First off it was ‘only’ $225,000 (£140,000 or 7.3M THB). I rounded to the nearest $50,000 for effect. However, with interest it would’ve been almost $0.25M.

In 1991 I joined the Royal Navy aged 17. My parents gave me £10 for the 8hr train journey from Newcastle to Plymouth. My net worth was £10.  By the time I’d arrived in Plymouth my net worth was back to £0.

For the next 22 years I never earned more than an average salary. However, through a combination of hard work, frugal living, lucky house flips, eschewing marriage, diligent saving and compound interest I’d managed to achieve a substantial net worth. The purpose of which was to realise a dream. A dream to be free from the bonds of modern day wage slavery. In essence, I longed to be a free man.

OK. So what happened?

Being a risk-averse lad I was happy to leave the cash sitting in a standard UK savings account. The thought of losing decades of hard-earned savings terrified me. Then Phuket happened. To get to the root of this disaster we have to turn the clock back to Phuket, 2011.

Phuket? Thailand?

Yes. I was working there when I met Barry Payne, a QPR supporter from the south of England. We shared an interest in global economics and discussed many topics around the swimming pool. At that time historically low Bank-of-England base rates (0.5%) and meager savings rates (1%) were hurting savers. The UK’s inflation rate (5%) meant people’s savings were losing 4%pa and (using basic logarithms) would lose half their value in 17 years.

Over the course of 2011 Barry Payne (using a Montpelier Wealth Management email address - but now running Easyqrops) started hinting at a new investment vehicle he was touting. Third Party Litigation Funding (TPLF) namely: Centaur Litigation and Growth Series II. TPLF basically funds court cases and takes a slice of the winnings. The proposed product had a 100% capital guarantee backed by a comprehensive insurance package. This was vital. I did not want to expose my hard-earned to any risk.

I toyed with the idea for six months before plunging in November 2011. I scrutinised the brochure with a feverish intensity satisfied there was no sleight of hand. I was shaking as I transferred most of my life savings to an HSBC account in Hong Kong. Happily, everything went to plan and I invested more (the rest of my savings) into Centaur Income Accelerator III (Principal Protected Shares) in May 2013. I retired in July 2013 confident I was set for life.

Sounds good. So what went wrong?

I was enjoying early retirement in Chiang Mai when I stumbled across this in February 2014:

http://www.offshorealert.com/brendan-terrill-argentum-litigation-fund-buttonwood-legal-capital-suspected-ponzi-scheme.aspx

I shat myself. Ponzi is a horrible word that no investor wants to hear. I refused to believe this could be true. I’m sure there’s a psychological explanation for my refusal to face reality in these circumstances. Denial? Rationalisation? I called Barry and he told me it was merely malicious press speculation. Mental gymnastics told me that the 100% capital guarantee would protect me and this journalist must be wrong.

He wasn’t. Barry Payne was.

In June 2014 the funds went into Provisional Liquidation:

http://www.scmp.com/business/money/markets-investing/article/1524093/litigation-investment-fund-centaur-litigation-put

In September 2014 www.grantthornton.com.au the provisional liquidators produced a report detailing the scale of incompetence, embezzlement and lies we'd been sold. It was like reading your own obituary. It's supposed to be confidential but the South China Morning Post gives an overview:

http://www.scmp.com/business/money/markets-investing/article/1595379/centaur-litigation-funds-misappropriated-backed

This passage is incredible:

"capital guarantee structures that investors were told would protect them in the event of a loss either did not exist or were for the most part issued by firms connected to the funds' founders and former directors and show little likelihood of being honoured."

So the entire house of cards was built on lies? Additionally, it appears Scott Williams and Brendan Terrill, the former directors and alleged beneficiaries of "irregular transactions" have done-a-runner:

http://www.smh.com.au/business/liquidators-hunt-for-alleged-centaur-litigation-ponzi-scheme-boss-scott-williams-20140713-3buza.html

Jeez. Why did you invest in that shite?

Simple.

1. Negative interest rates in UK banks.

2. 100% capital guarantee.

3. Decent returns not linked to volatile stock markets.

4. Argentum Capital (funded by Centaur) was chaired by retired London High Court judge Sir David Keene lending the whole enterprise a comforting air of credibility and legitimacy.

5. A safe way of funding an early retirement dream I’d worked hard to achieve.

It’s abundantly clear now that investing everything was irrational – easy to see in hindsight. However, back then I was sure of my decisions as I was 100% convinced by the 100% capital guarantee. This illusion of security was my Achilles’ heel.

Looks like you’re fucked. What will you do?

Yes, I agree. I’m fucked. I managed to retire at 39 only to have the rug pulled from underneath a year later. I’m skint again. The same as I was at 17 on the train to Plymouth. Retirement’s over before it began and I’ll be looking for full-time work again very soon.

Funny, I rode a £9,000 Ducati last month and could’ve bought 15 of them. Now I can barely fill one up with petrol. Life can change in a breath. Rich to poor in a day.

How do you feel?

Like a rolling stone. When I first learned of the situation I experienced a waterfall of negative emotions. For 48hrs I wanted revenge – to punish those responsible. Torture and murder tantalised my thoughts.

The emotional pendulum swung from suicide to shame. How could I have been so stupid? Anger and grief overwhelmed me. This was the worst I’d felt since my Mother passed away in 2008. Decades of work and sacrifice for nothing. It was a terrible couple of days.

Cruel world

It seems everyone is enriched but the mugs investors. Barry Payne gained a generous commission for hooking me. The elusive fund managers Scott Williams and Brendan Terrill (if they’re their real names) are likely millionaires living in opulent luxury. The liquidators earn in an hour what I spend in a month.

I’ve met a lot of folk who’ve lost on the stock markets (hence my reluctance to go there) but they’ve all, without exception, got something back. We, on the other hand, have lost the lot (despite the 100% capital guarantee). I still don’t understand how that can be? However, facts are facts and we’ve received no interest payments in 2014. The capital is due back in November 2014 (with interest) but we're getting the square root of FA.

Do you blame yourself? Have you learned anything?

I blame myself for believing the 100% capital guarantee lies that led me to become entangled in this web of bullshit. I blame myself for being greedy. I blame myself for listening to a Financial Adviser working on commission. I blame myself for not acting in February when suspicions were first aroused. I blame myself for putting all my eggs in one basket – a classic blunder. I blame myself for becoming an inadvertent victim.

What have I learned? Nothing in life is permanent. Security is an illusion – it can be snapped away in an instant. I’ve learned to be humble as evidence clearly shows I’m not as clever as I thought I was. It takes a special kind of dumbass to lose quarter of a million.

Poor life choices lead to people being poor

I believe this maxim is true and I’m not immune to its mechanics. This was, by far, the poorest decision I've ever made. What a fuck up.

Future

After the initial shock of learning that I'm totally skint I’ve had to regroup and consider my predicament. The only thing I own of any value is a motorbike. It’s unlikely I’ll ever accumulate that much wealth again. However, this rags-to-riches-to-rags story will not destroy me. I will be resolute. I will continue to live a modest life, adhering to the tenets of minimalism, squirreling bits away when I can.

Thinking positively, I'm healthy, debt-free and have an uncanny ability to live happily on very little. Obviously I'll have to change this blog's sub-heading to 'Embracing minimalism and early retirement in Chiang Mai, Thailand.'

Justice

I would like to believe Scott Williams and Brendan Terrill will receive justice at some point in the future. However, just like their funds, this can’t be guaranteed. Perhaps karmic justice will prevail where human systems are found wanting.

Are you looking for sympathy?

Not really. I penned this as writing helps to galvanise my thoughts. Any ex-serviceman will tell you that sympathy comes between shit and syphilis in the dictionary.

Instead, I’d like to take this opportunity to warn people about the perils of Financial Advisers, glossy brochures promising the moon-on-a-stick and, most importantly of all, a reminder that the best criminals wear suits.

This scam was so well executed I almost want to applaud them. Nigerian internet scammers have nothing on white men in Armarni. I wonder if they'll evade the law in perpetuity? They’re obviously smart guys. Do yourselves a favour and leave any savings in the bank. At least you’ll still have them at the end of the day. Failing that, go for tangibles (eg. property, gold).

If you must invest, only invest what you can afford to lose. Don’t, whatever you do, go balls-deep like I did – it’s financial suicide and a future of impoverished wage slavery.

It's too late for me but if just one person benefits from my experience something positive will emerge from this cesspit of gloom.

My life destruction in pictures

A quarter century of hard work …… gone.  I want to cry when I think of the condos, motorbikes and women this could’ve bought.

In fact, thinking about it, that's exactly what I should have spent it on. I wish I could go back in time.

Centaur II. Hilarious.

You try to do the right thing by being financially responsible but end up with nowt.

I wonder if Brendan Terrill and Scott Williams have since invested in TPLF? They should do based on iron-clad guarantees like these.

Centaur III. I took a leap of faith based on this? Doh!

I should have asked for proof of all this fancy-sounding BS before committing. How could I fall for such lies? Where was the due diligence? Caveat emptor.



Conclusion

I’ve been spending time in Temples trying to reconcile what happened while reflecting on the Buddha’s teachings. I’ve found enormous comfort here. I envisage Buddhist spirituality complementing a minimalist approach to life in the future.

Finally, I'll finish with a couple of quotes I can’t seem to get out of my mind:

When you ain't got nothing you got nothing to lose. – Bob Dylan

You only lose what you cling to. - Gautama Buddha

Letting go gives us freedom, and freedom is the only condition for happiness. If, in our heart, we still cling to anything - anger, anxiety, or possessions - we cannot be free. - Thích Nhất Hạnh

Life goes on. Peace.