(Updates with details of an email in which CCI says it is not working or affiliated with LCCCL)
A UK court has disqualified a 34-year old man for running a carbon credit investment firm that purported to be in partnership talks with former US President Bill Clinton’s philanthropic foundation but was found to have scammed investors out of hundreds of thousands of pounds.
Young Erumuse was disqualified earlier this month for the maximum 15-year sentence for his role in Greenwich, London-based London Carbon Credit Company Limited (LCCCL), which was wound up by a British court in 2013 in the name of the public interest, the UK’s Insolvency Service announced on Friday.
An investigation uncovered that between June 2011 and March 2013, Young Erumuse had “caused or failed to prevent LCCCL from inducing members of the public to invest in voluntary carbon credits (known as verified emissions reductions or VERs) for which there is no genuine secondary market,” the agency said.
“In addition, he failed to maintain, preserve or deliver up adequate company records to explain payments totalling over £2 million and receipts of almost £1 million.”
A 2011 press release that appears to have been released by LCCCL claimed that the company would “soon be able to offer its clients carbon credits from the Clinton Climate Initiative, part of the Clinton Foundation”.
“London Carbon Credit Company is currently in advanced negotiations with the world renowned Clinton Foundation to be sole UK provider of carbon credits produced from the Clinton Climate Initiative’s carbon capture and forestry projects.”
The CCI could not be reached for comment, but a Sep. 2012 email sent by D. James Baker, Director of the Global Carbon Measurement Program at the Clinton Foundation, to Chris Lang of the REDD-Monitor website states that “this matter is a known fraud”.
“The Clinton Foundation and its Clinton Climate Initiative is not working or otherwise affiliated with the London Carbon Credit Company. The Foundation has included this matter on the Fraud Alert section of its website and is undertaking efforts to address this matter,” Baker wrote.
REDD-Monitor works to expose companies engaged in carbon investment fraud while helping investors that have been duped by such scams.
ENORMOUS MARK UP
The Insolvency Service said LCCCL was found to have purchased VERs from brokers for an average of £3.50 each, while cold-calling investors and charging them an average of £110.70 per unit – a mark up of 3,163%.
“It was therefore LCCCL and not its customers, who profited from the VERs. Essentially, investors have lost their money.”
The disqualification means Erumuse will be banned from promoting, managing or being a director of a limited company in the UK until 2030.
It was not clear whether any criminal charges or civil proceedings were pursued against Erumuse.