Three directors of Ethical Forestry Limited (EFL) have pleaded guilty to fraudulent trading after orchestrating a £70 million eco-Ponzi scheme that defrauded more than 3,000 investors. Stephen Greenaway, Paul Laver, and Matthew Pickard, all aged 48 and 55 respectively, are now awaiting sentencing for their roles in the scheme, which promised investors substantial returns from planting trees in Costa Rica.
Investors were led to believe their contributions would fund the planting of trees, which would later be harvested and sold for timber, offering returns between 10 to 25 years later. The company, established in 2007, marketed its investments with an "intoxicating blend of hard finance and ecological consciousness," assuring investors they were "making the world a better place" while also generating significant profits. The scheme operated between January 2008 and December 2015, with investments ranging from £10,000 to £200,000.
However, the directors, described as "consumed" by access to the funds, diverted millions of pounds for personal luxuries. These included Italian supercars, multi-million-pound mansions, and expensive holidays. The court heard that the promised returns from supposed "thinning harvests" were actually funded by new investors, a characteristic of a Ponzi scheme. Prosecutor Kevin Dent, KC, stated that the directors exhibited a "cynical and calculated disregard of investors' interests."
Matthew Pickard, who held a 65 percent share in EFL, was considered the "dominant player." Stephen Greenaway and Paul Laver each held 17.5 percent stakes. The company purchased 48 plots of land for £10 million and sold two million trees during the scheme's operation. In addition to the core investment fraud, the defendants also paid £2.7 million to a company called Blackstar for a tax avoidance scheme that created a £40 million tax liability. They subsequently withdrew approximately £17 million from EFL, leaving it unable to meet its obligations to HMRC, further exacerbating the company's financial collapse.
Evidence presented in court detailed the extravagant spending of the directors. Pickard reportedly spent £4.3 million on a property, £30,000 on garden tiles, £283,000 on a yacht, and £170,000 on holidays. Greenaway purchased a £1.9 million home in Poole's Sandbanks peninsula and spent £1.3 million on 26 cars, including Ferraris and Porsches. Laver acquired a £755,000 home, invested in expensive art, bought 16 cars for around £673,000, and installed a home cinema. Laver also personally purchased a plantation called Cinco Ramas for $600,000.
Former employees described the directors' "frivolous" and "careless" approach to money, noting the frequent arrival of high-end sports cars at the company's premises. The scheme began to unravel in 2014 when cost predictions proved inaccurate, revealing a significant capital investment shortfall. When the company lacked funds for "thinning harvests," the Financial Conduct Authority became involved, and EFL entered voluntary liquidation in 2015. At that point, the company still had over 275,000 trees to plant for 475 investors who had paid £7.5 million, with documentation falsely claiming the trees were already planted.
Emma Luxton, Director of Operations at the Serious Fraud Office (SFO), stated that the investigation exposed the fraudulent scheme and that the guilty pleas were an important step toward justice for the victims. The sentencing hearing is ongoing.