I know its a scam, but what exactly is the scam?

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I know its a scam, but what exactly is the scam?

Postby jellybean » Wed Nov 09, 2016 6:20 pm

Hi all,

I have been following the forum for a while now, ever since I encountered Peter Of England by chance on facebook, found his ramblings utterly ridiculous and googled him, leading me here.

I have spent countless hours reading all 700 pages of the posts, so thanks for entertaining me!

Apologies for making my first post a question, and I hope its in the right part of the forum, its not a FMOTL/ Sov Cit scam, but its UK based so I thought this the most sensible place to ask.

I have spotted a post online today about someone who has been contacted by a company called Kedros Formations. They are offering to pay people £75 to become a director of a limited company, which they say they sell within 24 hours, leaving no ramifications for the person involved.

Ive done a little digging, and this company leads to one Joseph Edward Rae Butterworth, who has been involved with no less than 296 companies, all operating at roughly the same time, from the same address in Bury, Manchester.

Reading the post, it seems one poster knows 30ish people who have been involved in this, and more and more people are adding to the post to say they are not only involved personally, but have been paid an additional £25 to refer their friends.

Please forgive my stupidity, but I just dont understand the benefit of paying to set up multiple LTD companies, and I dont understand why anyone would want a complete stranger to be the director of their company.

If any one could explain this scam in a bit more detail I would really appreciate it, Im struggling to get my head around it.

This is the website they are currently using: https://www.kedrosformations.co.uk/

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Re: I know its a scam, but what exactly is the scam?

Postby rumpelstilzchen » Wed Nov 09, 2016 6:32 pm

jellybean wrote:
I have spotted a post online today about someone who has been contacted by a company called Kedros Formations. They are offering to pay people £75 to become a director of a limited company, which they say they sell within 24 hours, leaving no ramifications for the person involved.

Can you provide a link to that post please.
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It shows your mentality to think someone would make the effort to post something on the internet that was untrue.

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Re: I know its a scam, but what exactly is the scam?

Postby jellybean » Wed Nov 09, 2016 6:38 pm

Its in a closed group on Facebook, so I dont think youd be able to see it unless youre a member Im afraid.

https://www.facebook.com/groups/beatthe ... 7420954047

This is the original post, if you have access to the group.

Edit to add... Everyone seems to have been paid the money upfront, and no one is complaining of any suspicious bank transactions since payment.

If you need any other info, please let me know and i will do my best to find out.

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Re: I know its a scam, but what exactly is the scam?

Postby NYGman » Wed Nov 09, 2016 6:42 pm

I do hope they are not using these unsuspecting Nominees To register investments under the nominee, disclosing their information to any financial authority, allowing the true beneficiary to remain hidden. Becoming a nominee isn't risk free. Since you are known, and the real Beneficiary isn't, who do you think will get in to trouble? Also, under CRS reporting requirements, any income earned will be reported to the local government, and as a real person, will include your details. I would strongly advise against this. While it doesn't seem "illegal" on its face, it probably is being used as part of an illegal scheme, you would not want to be caught up in.

That, and if it only takes $75 to engage a nominee, where can I sign up, it is a real deal...
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Re: I know its a scam, but what exactly is the scam?

Postby littleFred » Wed Nov 09, 2016 6:59 pm

In the UK, most companies start their life registered at the address of an accountant, with that person as the director. Companies are "prefabricated", so when Joe Bloggs decides his business should be a company, he can buy one off the shelf rather than taking the time to create it from scratch. Then the company is transferred to the new owner. This is common practise and not a problem.

Why would anyone use the name and address of a complete stranger for this? Why bother? I can't see how it benefits anyone, if it is legit.

They say:
We never ... Set up any lines of credit or trade whilst you are the director

Well, I should hope not. The director has personal responsibilities. If the company isn't limited, this would include all the company debts.

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Re: I know its a scam, but what exactly is the scam?

Postby TheNewSaint » Wed Nov 09, 2016 7:03 pm

I found this article, which may be relevant:

http://uk.reuters.com/article/uk-regula ... KKCN0WK17W

Insight - How UK company formation agents fuel fraud

British government efforts to crack down on money laundering and fraud through UK businesses are failing to tackle a key area - the role of company formation agents - a Reuters study of the sector shows.

Some formation agents fail to perform significant due diligence on who their customers are or why they are buying new companies, according to lawyers.

The aim [of new rules coming into effect this year] is to prevent fraudsters from setting up companies whose directors and shareholders are nominees - people who are directors in name only and are acting on behalf of someone else – or opaque corporations.

An indication of the scale of fraud through UK companies can be found in data detailing 1.3m transactions that originated in Russia and Eastern Europe and passed through two U.S. banks between April 2006 and November 2008. A Reuters analysis of the data shows that nearly $2 billion (£1.3 billion) was paid into the bank accounts of newly-created UK companies and limited liability partnerships (LLPs) that went on to claim in corporate filings that they were not trading and were dormant.

Receiving large sums of money while claiming to be dormant is a breach of UK company and tax laws.

One of the businesses appearing in the bank data was Starion Overseas LLP, a partnership set up in 2006. Starion Overseas was one of 20 LLPs created on a single day - June 29, 2006 - by a formation agent called @UKPLC, filings show. @UKPLC formed the LLPs on behalf of a Panamanian-Russian company called Midland Group.

At least 12 of the LLPs formed that day received millions of dollars between 2006 and 2008 while filing regulatory statements saying they were dormant, according to corporate records and the bank data reviewed by Reuters. It was not possible to identify who made the payments.


I wonder if the scam here is to collect real names to pad out the roster of directors, for phony companies that are later used to launder/transfer money.

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Re: I know its a scam, but what exactly is the scam?

Postby NYGman » Wed Nov 09, 2016 7:16 pm

TheNewSaint wrote:I found this article, which may be relevant:

http://uk.reuters.com/article/uk-regula ... KKCN0WK17W

I wonder if the scam here is to collect real names to pad out the roster of directors, for phony companies that are later used to launder/transfer money.


DING DING DING

Exactly what I was refering to, but one step worse. In order to crack down on this, CRS requires a company to document their controlling persons. The Nominee would be disclosed here. Then any reporting, will reflect the Nominee as having control. so if they do decide to go after someone for tax evasion, who do you think it will be. I would be glad to pay someone $75 to use their name, to set up a company, to invest tax free. Where can I sign up, and find an idiot incredible person willing oto do this for me???
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Re: I know its a scam, but what exactly is the scam?

Postby NYGman » Wed Nov 09, 2016 7:20 pm

I have to add, being a nominee of a company you know nothing about, for a company you know nothing about, is just crazy. for a measly $75, someone is willing to disclose their name, and all other information, in order to front a company for an unknown person to use in unknown ways, just can't end well. The company may have secure servers to protect your data inside the company, but what they don't tell you is that nominees are disclosed as part of the AML/KYC process.

REminds me of the Panama Papers too, there, the law firm would find living nominees to open accounts for their clients. This is no different. Except for a small sum, you are selling yourself down the river, without a paddle.

what people are willing to do for pocket change. It isn't even enough for a swanky dinner.
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Re: I know its a scam, but what exactly is the scam?

Postby TheNewSaint » Wed Nov 09, 2016 7:37 pm

NYGman wrote:for a measly $75, someone is willing to disclose their name, and all other information, in order to front a company for an unknown person to use in unknown ways, just can't end well.


Hell, this could just be an elaborate identity theft scam. I'm sure whatever information is necessary to be board member of a company is also enough to access a person's bank accounts. Full name, residence, government ID numbers, etc.

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Re: I know its a scam, but what exactly is the scam?

Postby NYGman » Wed Nov 09, 2016 7:41 pm

TheNewSaint wrote:
NYGman wrote:for a measly $75, someone is willing to disclose their name, and all other information, in order to front a company for an unknown person to use in unknown ways, just can't end well.


Hell, this could just be an elaborate identity theft scam. I'm sure whatever information is necessary to be board member of a company is also enough to access a person's bank accounts. Full name, residence, government ID numbers, etc.



Correct, they will need name, address, Tax ID Number (NHS. SSN, etc), and a copy of government issued ID. I would want a heck of a let more than $75 to be a nominee. And yes, this can be used for identify theft, and I am sure they are not compliant with Data protection rules. there may be nothing to stop them reusing it over, and over too, I am sure forging a signature isn't above them.

Reminds me of two old sayings:

1) You don't get something for nothing.
2) If it sounds too good to be true, it probably is.

Edited to add:
I do have to say, it is pure genius, to offer a token amount to sign up nominees. They are paying $75 to the sucker, maybe $100 if they refer someone, but are probably charging in excess of 5k per annum for the service. And for that $75 you basically take all the risk. Have fun dealing with regulators, tax collectors, and others, looking for the real owners

I think both apply here.
Last edited by NYGman on Wed Nov 09, 2016 7:49 pm, edited 1 time in total.
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Re: I know its a scam, but what exactly is the scam?

Postby jellybean » Wed Nov 09, 2016 7:48 pm

Thank you for shedding a little light on this for me, and for the informative replies and links, its much appreciated.

Would you have any ideas on the potentional ramifications for anyone who has signed up for this already? Is it too late to do anything about it?

Neither the police nor Action Fraud seem especially interested so far, who would be the best authority to report this to?

I completely appreciate it might seem a bit daft for people to fall for this, but it seems they have chosen their target audience quite wisely, all the posts I have seen so far are struggling single parents, with no knowledge of whats involved in becoming a director of a LTD company, nor the potential pitfalls.

Kedro claim that you will only be the director for 24 hours, before they sell the company to someone else, so its an easy £75 towards christmas presents for some.

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Re: I know its a scam, but what exactly is the scam?

Postby NYGman » Wed Nov 09, 2016 8:29 pm

Again, sounds too good to be true. do you know if they sign any documents or know the company name they are nominee for? You may be able to get your name scrubbed, as I am sure the company isn't updating information as they should. The issue may be with banks and financial institutions who will have already processed your information, and will likely use it to report next year. I will say you may want to contact all banks and see if you can find the companies accounts, good chance you will still be director, and authorised to act on the account. Then you could really have some fun, but probably should see what you can do to have your name removed, and the account closed, and probably should sell the assets and empty the account... Although if you did, that would be interesting
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Re: I know its a scam, but what exactly is the scam?

Postby aesmith » Wed Nov 09, 2016 8:33 pm

There's not that much personal information needed to register the appointment of a directory, NI number isn't given and remember there's no mandatory government issued ID in the UK. The form is downloadable online here AP01 Appointment of Director

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Re: I know its a scam, but what exactly is the scam?

Postby jellybean » Wed Nov 09, 2016 8:53 pm

This is one of the companies someone has become a diretor of... As you can see, its only very recently incorporated on 1/11/2016.

She was told she would be a director for just 24 hours, and yet her details are still there.

https://beta.companieshouse.gov.uk/company/10456386

Their facebook page is here: https://www.facebook.com/kedrosformatio ... CH&fref=nf

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Re: I know its a scam, but what exactly is the scam?

Postby TheNewSaint » Wed Nov 09, 2016 9:04 pm

If it were me, I would consult an attorney. Explain to them what happened, and that you want to remove your name from any companies you might be a director of. It'll cost you more than 75 GBP, though.

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Re: I know its a scam, but what exactly is the scam?

Postby NYGman » Wed Nov 09, 2016 9:04 pm

While you may not need Government ID to be added as director, it may be required to open an account at a bank, or validate the director status. Yes, it isn't required, and there may be alternative documents you can use, government ID makes it easier.

As to the name still being there, it does probably take time to remove. Not sure if one can initiate it themselves. I just wouldn't trust them to remove a name anytime soon. Also, you indicate you own the company, so again, if you know where they bank, it could get interesting....
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Re: I know its a scam, but what exactly is the scam?

Postby aesmith » Wed Nov 09, 2016 9:15 pm

Yes a Director can resign. Directors aren't necessarily owners, any more than shareholders are necessarily directors. I would suspect in this case that the director is not owner, otherwise once appointed they'd have the power to do what they wanted with the company and that might not suit the scammer.

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Re: I know its a scam, but what exactly is the scam?

Postby NYGman » Wed Nov 09, 2016 9:24 pm

See this link...

https://beta.companieshouse.gov.uk/comp ... nt-control

Nature of control
Ownership of shares – 75% or more


Owns more than 75% of shares, and looks to derive control from that.

Yes Mister Bank Manager, I do control the company, and I would like to liquidate all assets, and cash out please.
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Re: I know its a scam, but what exactly is the scam?

Postby rumpelstilzchen » Wed Nov 09, 2016 9:34 pm

jellybean wrote:
She was told she would be a director for just 24 hours, and yet her details are still there.

According to their website they transfer the company out of your name normally within one month.
Details are here:
https://www.kedrosformations.co.uk/nominees/

They do say the £75 must be declared as income and could be taxable.
FWIW I don't think this is necessarily a scam.
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Re: I know its a scam, but what exactly is the scam?

Postby NYGman » Wed Nov 09, 2016 9:40 pm

rumpelstilzchen wrote:
jellybean wrote:
She was told she would be a director for just 24 hours, and yet her details are still there.

According to their website they transfer the company out of your name normally within one month.
Details are here:
https://www.kedrosformations.co.uk/nominees/

They do say the £75 is taxable income.
FWIW I don't think this is necessarily a scam.


If it were so safe and simple, and without risk, why isn't someone from the company doing it themselves? Why can't they just employ a person to be Nominee for all their entities. I work for a financial institution, we act as nominee, we are paid to be nominee, we have a company set up to be nominee, and employee people to act for and behalf of the nominee. They make sure the Nominee is compliant with any and all reporting, registration, and regulatory requirements.

If they want to offer nominee companies, tehy can do it internally, without turning to the public and paying 75 a head. The compensation is too low, the risks are undisclosed, and the ramifications are unknown. It isn't a risk I would take for an easy 75.

Oh and saying that the 75 is taxable income is neither her nor there, it is a fact yes, but unconnected to the issue at hand. And I think they mention this, to make them sound legit, as in oh by the way the fee we pay you in cash is taxable. You should report it, nudge nudge, wink, wink...
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