Nick Carlile, a real estate business owner who had built three multimillion-pound companies, is a scammer who filed for bankruptcy in the end.
A few years ago, he started the Shepherd Cox project. Through this project, he was able to get a lot of money from investors both in the UK and outside of it.
He quit paying the investors back in the end, and then he filed for bankruptcy.
This review will go into more detail about how Nick Carlile ran the Shepherd Cox scam and why you should stay away from uncontrolled collective investment schemes (UCIS):
How Nick Carlile and Lee Bramzell Pulled off the Shepherd Cox Hotels Scam
Nick used to run Platinum Portfolio Builder, another infamous company with few happy customers before he started Shepherd Cox. He later went into business with Lee Bramzell as Shepherd Cox. They bought old hotels, said they were fixing them up, and then started renting out rooms to buyers.
The project didn’t happen, and investors were worried about it even before the pandemic began. Nick Carlile filed for bankruptcy in 2021 because he owed investors around £21 million at the time.
How Nick Carlile ran the scam?
Nick and Lee sold Shepherd Cox Hotels as a way for people to buy hotel rooms so that they could make money. They offered guaranteed rents of 8% per year for 5 years and buybacks for 115% of the amount invested. The idea was a good one, and many people chose to invest with Nick.
People often invest in hotel rooms, which is a common way to run a business. Most of the time, though, they don’t work.
This plan was offered by more than just Shepherd Cox. Signature Living was another company that offered a similar business, and both of them had worked together in the past. Nick Carlile had stopped paying Shepherd Cox’s backers months before the pandemic. For a while, the company paid the promised rent. But they stopped paying at some point.
At first, they stopped paying most of their foreign investors, who were generally from Singapore, Taiwan, and Hong Kong. They kept paying their investors in the UK for a while, likely because they didn’t want local officials to find out.
The company engaged in business with two companies, and in 2020, a police probe was launched into one of them. The people who invested in Shepherd Cox only owned room leases. They didn’t own the rest of the hotel, including the kitchen, the land on which the hotel was built, the lounge, and so on.
Pandemic And Lawsuits
When the pandemic started in 2020, Shepherd Cox said that most of its hotels would have to close. COVID-19 forced a lot of restaurants to close, so they weren’t the only ones. But they had stopped paying the promised rent a long time before the outbreak.
In some cases, they hadn’t paid rent in over a year, even though the owners asked many times.
But Nick Carlile kept making it look like his business was doing well. Even though hundreds of investors hadn’t been paid in months, the company stated that it was buying two new hotels: The Crab Manor in Thirsk and The Olde Barn in Marston.
A lot of buyers didn’t agree. They thought that Nick and Lee had bought those two hotels with their money. Many people wondered if Shepherd Cox gave them a good market price for their investments, which was not the case.
The buyers paid 200%–600% more than what the rooms were worth. The owners sued Nick Carlile’s Shepherd Cox Hotels at the High Court in London in April 2020.
The company bought the hotels for £6.5 million and then sold the rooms to buyers for around £14.8 million.
Several hotels, including the Comfort Inn, Travelodge, George, Best Western Grand, Sandpiper, and Jersey Arms, had been named in investor claims. Nick Carlile and Lee Bramzell were thought to have used some of the houses as collateral to get loans.
Investors couldn’t go to their rooms after the hotels closed. This meant that the Shepherd Cox backers couldn’t even see how their rooms looked.
IVA Proposals & Aftermath
Nick Carlile and Lee Bramzell put out their IVA ideas near the end of 2020. They were some of the most vague IVA plans that a company director can put out.
After reading the proposals, many investors understood that Nick and Lee were just putting them off until they could use the “pre-pack” administration of Festival Hotels Group Ltd, which would leave the investors with nothing.
Nick and Lee’s debts were just over £19.5 million and £15 million, respectively, in their first IVA plan. They didn’t say anything about the buyers who bought the rooms for £16 million. Also, they didn’t include the claims that the people in charge of their hotels had made. Nick and Lee both said that they didn’t include the claims of the managers because they didn’t agree with them.
Nick Carlile and Lee Bramzell tried to get away with their multimillion-dollar scam without getting caught with their IVA plans.
Even worse, Nick Carlile and Lee Bramzell put both of their homes in the “Excluded Asset” category. Nick said he and his wife were no longer together and that he only owned half of the house where she lives. He had also put his 50% share on the list of assets to be left out.
Nick and Lee had suggested a 5-year payment plan for the owners in their first IVA plan. They even put their cars on the list of things they wanted to keep. The two people said they could pay back the money through Festival Hotels Group Ltd. Nick Carlile owned 38% of this company before he filed for bankruptcy.
Festival Hotels Group Ltd said that it ran hotels like The Crab & Lobster and The New Hobbit Inn. Nick and Lee said in their IVA plan that they will run these hotels for the next 5 years, make money, and pay off their debts with dividends.
In other words, Nick Carlile and Lee Bramzell could have easily avoided paying the creditors in this plan by not declaring dividends.
Nick Carlile sold 11 homes that could be used as investments and had a value of £200,000 or more. He said that the estimate was done by the real estate company Bell & Co. But Bell & Co Estates Limited only had two members, and one of them was Nick.
In the IVA plan, he didn’t say anything about this. Nick had started Bell & Co. in July 2019 to trick his creditors. Untrustworthy debtors often ask a friend who works in real estate to undervalue their homes. So, they can sell the same thing to a friend who would also work for them on the side.
IVA plans post Nick Carlile’s bankruptcy
Nick Carlile was ruled bankrupt in July 2021, so Lee Bramzell sent him a new IVA offer. This was a worse plan, and Shepherd Cox’s backers didn’t have much faith in it.
In the end, Nick Carlile and Lee Bramzell’s bankruptcy was better for their creditors because it gave them access to the personal assets that Carlile and Bramzell had put in the “Excluded” group.
Creditors agreed to Lee’s new IVA plan at the end of July 2021. But by that time, Festivals Hotels Group only owned five hotels, down from ten when they started.
Also, Lee Bramzell left out a very important fact about one of the hotels owned by FHG from the plan. There was a protest against one of his hotels, the Comfort Inn Sunderland, which could lead to the company losing that hotel.
Nick Carlile rumors and what other people said about him
Nick started the multimillion-dollar hotel business scam by making false promises and making claims that were too good to be true. Even though it worked for a lot of people, many investors didn’t believe it.
I found a long discussion where Nick’s claims were talked about in depth. As you’ll see, a lot of people knew how Shepherd Cox would trick its investors.
Here, someone asked if anyone had worked with Platinum Portfolio Builder and Shepherd Cox and if they seemed like trustworthy companies.
Several users said that both of these businesses seemed sketchy and suggested that you stay away from them. Remember that Nick Carlile started both of these companies.
One person told me about the scam. He said that they buy a bad hotel for a small amount of money and then charge too much for some of the rooms. They promise the owners that they will get ‘assured rentals’ of 8% a year.
The company then gives these investors a little bit of their own money once or twice, until they are sure that these investors won’t buy any more rooms. After that, they stop making payments and don’t answer the phone when buyers call.
Another user said that it’s an unregulated, hard-to-sell business where your income depends on a lot of other things like quality, location, and maintenance.
Nick Carlile’s plan wasn’t suggested by anyone in the investigation.
Conclusion
There’s no question that Nick Carlile used Shepherd Cox to rip off a lot of investors. He said that he had been an expert in real estate for 25 years. But it looks like all he knew how to do was scam people.
This is why you should be very careful with investment plans that aren’t regulated. Usually, if something seems too good to be true, it is.
Swindlers like this use misleading advertising and false claims to trick people into giving them money. Check to see if a trade is regulated.
Don’t put money into schemes that aren’t controlled.
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