Vol 14 (2017) - Issue 5

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'Salvaging the Arck': Raising a Jersey Company Sunk by the Weight of Fraud

As the dust settled on the 2008 global financial crisis, it was surprising that Jersey, as an international financial centre, had not experienced the collapse of investment funds that seemed to have occurred in other offshore jurisdictions. The conventional wisdom has it that Jersey was protected by tight regulation and a vigilant corporate services industry, but no matter how effective the regulator may be, there is rarely anything that can be done in the face of pre-meditated fraud by determined criminals.

In December 2014 Richard Clay admitted three charges of fraud and was subsequently jailed for 10 years and 10 months. His knowing assistant Kathryn Clark had pleaded guilty to charges of fraud and forgery at an earlier hearing in October 2014 and was subsequently given a two-year suspended jail sentence, combined with 300 hours of unpaid community service. Clay and to a lesser extent Clark, were the controlling minds behind Arck LLP (in liquidation) ('Arck'), which operated a bogus collective investment scheme using Jersey trust and corporate vehicles to disguise a massive fraud.