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

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

Postby NYGman » Wed Nov 09, 2016 9:48 pm

Just to add a bit more color tho this. Nominee directors are not really typical in the UK. They are common in jurisdictions that require a local to be a shareholder (ie. Singapore) and are used in tax heavens to some degree. As the UK isn't a tax heaven, and I do not believe they have a local shareholder requirement, I can only speculate the Nominee is being used to obscure the true owners identity, to allow them to do something they would not want to do in their name. Whether there action is legal or not, is irrelevant, I do not think this is something an average person should be participating in.

Again, back to my last post, why would they need people outside their company to do this, when it would be more cost effective to hire a person dedicated to this, and the whole process. something is not quite right here.
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Re: I know its a scam, but what exactly is the scam?

Postby TheNewSaint » Wed Nov 09, 2016 10:01 pm

NYGman wrote:why would they need people outside their company to do this, when it would be more cost effective to hire a person dedicated to this, and the whole process.


Also, I would think any company offering a temporary nominee service would want to know very well who they are using for this purpose. Wouldn't background checks and the like would be necessary? Hiring randos off the likes of BTBATB might result in one of your filings ringing some bells down at the regulators' office.

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

Postby NYGman » Wed Nov 09, 2016 10:04 pm

TheNewSaint wrote:
NYGman wrote:why would they need people outside their company to do this, when it would be more cost effective to hire a person dedicated to this, and the whole process.


Also, I would think any company offering a temporary nominee service would want to know very well who they are using for this purpose. Wouldn't background checks and the like would be necessary? Hiring randos off the likes of BTBATB might result in one of your filings ringing some bells down at the regulators' office.


DING DING DING

Another winning answer. Exactly right. Why would I want an unknown person on the hook for this, who know what they could do... Again, another reason to believe something nefarious is afoot.
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Re: I know its a scam, but what exactly is the scam?

Postby AndyK » Wed Nov 09, 2016 10:24 pm

A quick view at the referred web site comes up with

DING, DING, DING


Another bloody mlm.
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Re: I know its a scam, but what exactly is the scam?

Postby littleFred » Wed Nov 09, 2016 10:33 pm

Yes, the "£75 is taxable" is a deliberate distraction, to add an air of legitimacy. To me, the clincher is that they don't say why they want random people to be nominees. I can see no legitimate reason for this, but plenty of possible nefarious reasons.

I see that Kedros are in Stoke on Trent. Now, where have I heard that name before...

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

Postby jellybean » Wed Nov 09, 2016 10:49 pm

Just to clarify- It isn't me that's fallen for this. I just wanted that to be very clear!

I just read about it, and couldnt work out watch the catch was, although it is very obvious that there must be one. As has been said a few times, there's no free laptop, and there's no free lunch.

I just find it really odd that they would need this many people to sign up as nominees- why would they need that many different new companies? I dont understand what they're doing with them all, its not just one or two, its hundreds of them.

When you say MLM, how does that work? Kedro are paying the £75 sign up and £25 referer fees, and no money seems to be missing from anyones bank account yet. they dont seem to be asking anyone for money so far.

Little Fred- Their FB suggests its all based in Bury, Manchester. They hold open days to encourage new members, and dont seem to have any fear of being caught, or any nerves about people knowing where they are based.

Sorry if Im asking really stupid questions!

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

Postby GlimDropper » Wed Nov 09, 2016 10:55 pm

AndyK wrote:A quick view at the referred web site comes up with

DING, DING, DING


Another bloody mlm.


I haven't dug deep but this could be a simple affiliate deal without a multi tiered compensation structure. More like help us find more marks and we'll kick some cash your way sort of thing.

I found this,...unusual:

Joseph Edward Rae Butterworth

Joseph Edward Rae Butterworth was Born in May, 1996 (20 years old) a resident of Barcroft House, Barcroft Street, Bury, Lancashire, BL9 5BT (United Kingdom) having British nationality and was first ever appointed as Director in Thesmartwatchshop Limited on Thursday 02 October 2014 and as per the records from Registrar of Companies last appointment was in Thesmartwatchshop Limited as Director on Wednesday 30 March 2016 and currently holding positions as Director Joseph Edward Rae Butterworth was appointed in over 295 companies and currently holding positions in over 134 Companies.


[Link]

Mr. Butterworth is the name of the director of the company you pay to put fake director names on companies.

jellybean wrote: .,....

Little Fred- Their FB suggests its all based in Bury, Manchester. They hold open days to encourage new members, and dont seem to have any fear of being caught, or any nerves about people knowing where they are based.

Sorry if Im asking really stupid questions!


That address on Bury is of a company that rents temporary office space and hosts "virtual" offices. [Link]

Your questions are honest and on point.

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

Postby jellybean » Wed Nov 09, 2016 11:29 pm

From their facebook:

"Kedros Formations Ltd
August 11 ·

£75 for an hour of your time...
We are holding sessions on Fridays and Mondays in Bury, everyone welcome.
FREE FOOD & DRINK to be provided.
£75 if you sign up to become a nominee and a lot more if you continue with us.

To confirm your place, contact us either through Facebook or on 07950237727."

With Address: Barcroft Street
BL9 5BT

I just find the whole thing odd! I did try to uncover the reasons behind it before posting, but could only come up with either an elaborate identity theft, but this is unlikely given that they are paying the £75, and their client base wont have much to scam them out of, or some kind of tax scam.

Seemingly, they hold these open days a couple of times a week, in addition to posting on all the north west sale and swap type pages, where their posts get hundreds of replies.

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

Postby TheNewSaint » Wed Nov 09, 2016 11:37 pm

£75 for an hour of your time...
We are holding sessions on Fridays and Mondays in Bury, everyone welcome.
FREE FOOD & DRINK to be provided.
£75 if you sign up to become a nominee and a lot more if you continue with us.

Seemingly, they hold these open days a couple of times a week, in addition to posting on all the north west sale and swap type pages, where their posts get hundreds of replies.


Which is another red flag; a legit outfit shouldn't need huge numbers of people for this purpose. The same person can be a temporary director for more than one company at a time. I would think a small stable of trusted people would meet any needs.

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

Postby TheNewSaint » Wed Nov 09, 2016 11:40 pm

GlimDropper wrote:I haven't dug deep but this could be a simple affiliate deal without a multi tiered compensation structure. More like help us find more marks and we'll kick some cash your way sort of thing.


I thought the same. I don't see any signs of multi-level marketing, beyond their curious need for large numbers of people to fulfill this service for them.

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

Postby morrand » Thu Nov 10, 2016 1:13 am

GlimDropper wrote:I found this,...unusual:

Joseph Edward Rae Butterworth

Joseph Edward Rae Butterworth was Born in May, 1996 (20 years old) a resident of Barcroft House, Barcroft Street, Bury, Lancashire, BL9 5BT (United Kingdom) having British nationality and was first ever appointed as Director in Thesmartwatchshop Limited on Thursday 02 October 2014 and as per the records from Registrar of Companies last appointment was in Thesmartwatchshop Limited as Director on Wednesday 30 March 2016 and currently holding positions as Director Joseph Edward Rae Butterworth was appointed in over 295 companies and currently holding positions in over 134 Companies.


"Thesmartwatchshop Limited" sounds awfully familiar to me, somehow. I want to say it sounds like a company name I've seen on spam emails, but I don't know that for sure. I'll have to keep an eye out.

Along that line, if we're talking about false nominees and introducing money laundering to the discussion, perhaps this is a snowshoe? That is, perhaps the scam is that there are a lot of little companies, with a lot of little directors but ultimately all under common control, which are meant to trade small sums with one another? You get, say, 1000 firms with 1000 different directors, and suddenly you have this big machine into which you can dump money on one end, have it come out the other, and have the transactions (a) be too small to track individually, and (b) be between companies with no obvious common thread, and therefore (c) be effectively untraceable. In that case, the people being drawn in aren't the ones being directly scammed; they're being used as a part of the larger scam, and perhaps paying them £75 each from time to time is peanuts, taxable or not. Still quite a risk there for those individuals, of course.

Huuuuuge speculation here, but something not too different gets used in spam operations from time to time (lots of little email senders under common control, to spread the load out and make it less blockable, whence the moniker "snowshoe").
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Re: I know its a scam, but what exactly is the scam?

Postby fortinbras » Thu Nov 10, 2016 6:35 am

Since I am in the USA and this is a Brit scam, I am not conversant with all of its details. But in the US, a director of a corporation does bear considerable legal responsibility ... for example, if the corporation is sold with fraudulent claims, the directors at the time of its sale become legally liable - in civil and in criminal law - for the fraud. If I were one of a corporation director in such a stink, nobody would believe my story that I knew absolutely nothing about the corporation or its history or operations and that it took what was supposed to be a highly responsible position simply because I was lured by $75.

It is also possible that whoever is behind this is accumulating people's names, addresses, possibly other personal and sensitive data, and when he has a sufficiently large collection will do something unethical with it; possibly, something that damages you a lot more than $75 worth. Whether he actually sends you the promised $75 is something I cannot foresee.

This does not sound honest. Honest people do not get involved with such shady schemes.
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Re: I know its a scam, but what exactly is the scam?

Postby littleFred » Thu Nov 10, 2016 7:27 am

£75 if you sign up to become a nominee and a lot more if you continue with us.

What does a person need to do to get "a lot more"?

I suspect the people who get the £75 aren't being financially scammed. But if the company does something dodgy, they can be left holding the can while other folk reap the rewards.

I should say: my knowledge of current company law is virtually zero. I used to know more, when it was common for contract computer programmers etc to have their own micro company to reduce their tax bill, entirely legally.

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

Postby Footloose52 » Thu Nov 10, 2016 9:10 am

It's got a feel of money laundering about it to me but I can't put a finger on why other than lots of small companies as noted above. Layering requires a lot of unconnected entities or individuals moving relatively small sums around. It could even be a way of placing dirty money into the economy as well, spend £75 plus a small amount of time setting it up, add Companies House fee for registration of £10, and sell the company for a small profit as a 'Premium package' with a director address already set up.

Too expensive as a data mining operation, details are sold on the dark net for pennies.

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

Postby littleFred » Thu Nov 10, 2016 9:36 am

Why lots of companies? Well, if I wanted a launder £1,000,000 per year, doing it through one company is more likely to be noticed than £10,000 through each of 100 companies.

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

Postby aesmith » Thu Nov 10, 2016 11:04 am

fortinbras wrote:Since I am in the USA and this is a Brit scam, I am not conversant with all of its details. But in the US, a director of a corporation does bear considerable legal responsibility ... for example, if the corporation is sold with fraudulent claims, the directors at the time of its sale become legally liable - in civil and in criminal law - for the fraud.

That can be true in the UK as well. Directors wouldn't automatically be liable, but could be found so.

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

Postby daveBeeston » Thu Nov 10, 2016 11:49 am

I wonder if this is a company setting up other companies for people who have been banned from being a director of a company(if that makes any sense), that way they would never have their name associated with the new company.

It could also be that they are looking for nominee shareholders which is legitimate(in most cases)to help protect the anonymity of the true shareholder(something that does happen with big investors).

Personally i would steer well clear as there is far more risk than reward, in fact apart from the initial fee i don't think there will be any reward regardless of what they say.
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Re: I know its a scam, but what exactly is the scam?

Postby Chaos » Thu Nov 10, 2016 1:51 pm

Online ponzi schemes need faux management. The digadz scam had a faux owner 'Roman Novak'

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

Postby Gregg » Thu Nov 10, 2016 1:53 pm

Roman Novak was also the name associated with Profitable Sunrise
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Re: I know its a scam, but what exactly is the scam?

Postby letissier14 » Thu Nov 10, 2016 3:38 pm

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, who typically offer to create new businesses for fees of about 200 pounds or less, fail to perform significant due diligence on who their customers are or why they are buying new companies, according to lawyers. The agents offer to set up companies within a day or even a few hours, allowing time for only minimal checks.

The weaknesses of the system make it vulnerable to abuse. A Reuters analysis of bank transaction data gives a unique insight into how newly-formed UK businesses were used to conceal huge flows of money that originated in Russia and eastern Europe. The bank transaction data spanned 2006 to 2008; such data is rarely available and Reuters was unable to obtain more up-to-date information.

Frances Coulson, head of insolvency and litigation at Moon Beever solicitors, said the data showed how illicit money passes through Britain. She said such flows still continue because no regulatory or investigatory changes have had any significant effect in clamping down on the practice.

"This is going on now and all the time," said Coulson, who is a trustee director of the Fraud Advisory Panel, a body set up by the Institute for Chartered Accountants in England and Wales. "All the indicators are that it's getting worse."

Coulson said better due diligence - such as checking identification documents - by company formation agents and the UK corporate register, Companies House, would help combat fraud.

Formation agents, also known as company service providers, are regulated by Her Majesty's Revenue and Customs (HMRC), the UK tax collector, which maintains a list of approved agents. However, HMRC does not publish the list, thus preventing potential customers from easily checking the status of an agent.

New rules coming into effect later this year are intended to improve corporate transparency. From June, British authorities will begin compiling and publishing details of "people with significant control" of businesses.

The aim 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. However, critics say there are no new funds to help police the system.

SECRET MILLIONS

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.

A further $230 million flowed through the bank accounts of 15 businesses which simply did not file accounts.

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.

More than $112 million was paid into a Latvian bank account in the name of Starion Overseas between March 2007 and June 2008, with most of the money coming from a bank account in Moscow.

Such a large sum would normally require an LLP to file full accounts with Companies House, which maintains and publishes corporate filings in the UK. However, Starion Overseas submitted statements saying it was dormant during this entire period. Starion Overseas was dissolved in 2010 and could not be contacted for comment.

The statements were submitted on behalf of Starion Overseas by the formation agent @UKPLC. In total, @UKPLC submitted accounts to Companies House for 12 of the partnerships it set up for Midland Group. Those accounts said the partnerships were all dormant – even though millions of pounds were flowing through the LLPs' bank accounts, according to the bank data reviewed by Reuters.

The co-founder of Midland Group is Oscar Cedeno, a lawyer based in Panama. He said in an email that he could not comment on companies he was involved with because of "attorney-client privilege."

@UKPLC, which is based near Reading, west of London, is now known as Cloudbuy, a company listed on the London Stock Exchange. In an emailed statement the company said it was not responsible for the accuracy of filings it submitted to Companies House on behalf of clients. It said it went to great lengths, including using fraud prevention software, to weed out bad clients or suspicious transactions.

The company said there may be "a few bad companies" in the more than 300,000 it had formed, but that it worked with UK government bodies "to vigorously support law enforcement in prosecuting any criminal organisations that use its services."

UNPUBLISHED REGISTER

Businesses which provide services such as company formation, registered addresses, nominee directors and account filing are required to register with HMRC. As well as being Britain's tax collector, HMRC is responsible for monitoring whether company formation agents have proper systems in place to ensure they don't supply services to fraudsters.

However, it is unclear whether all such companies meant to register with HMRC do so, since HMRC does not publish a list of those registered. The tax authority declined requests to supply a copy of the list to Reuters.

HMRC does not specify exactly what due diligence agents should conduct on their clients. A spokesman for HMRC declined to give details of what monitoring it conducts on business formation agents.

HMRC told Reuters it had refused to register some agents and had withdrawn the registration of other agents it felt did not meet the regulatory requirements. "HMRC makes sure businesses are fit to be operating in the supervised sector by challenging them on their anti-money laundering strategies, moving quickly against those businesses which don't have effective anti-money laundering plans in place," said the spokesman.

Successive UK governments have criticised the practice of individuals acting as "front" or nominee directors for hidden owners. In 2013, David Gauke, a deputy finance minister, told the UK parliament that the existence of such directors was "inconsistent with our desire to know who really owns and controls UK companies."

However, Reuters found that some formation agents still advertise such nominee services – including some of agents listed on a government website giving advice on how to set up in business.

A further weakness in the regulatory system is Companies House, which collects and publishes corporate filings by the over 3 million companies registered in the UK. Companies House told Reuters that it checks whether forms submitted to it have been properly completed, but that it does not have the capacity to verify whether the information on the forms is accurate.

A spokesman for Companies House said it was the responsibility of the Department of Business Innovation and Skills to enforce rules that businesses submit accurate and truthful corporate filings. Submitting false documents is a criminal offence under the Companies Act 2006.

The department said it had never prosecuted anyone for such an offence.

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