Nick Carlile – £21 Million Property Scam Through Shepherd Cox
Nick Carlile used to claim to be a property entrepreneur who has built 3 multi-million pound businesses in this industry. In reality, he is a fraudster who had to eventually file for bankruptcy.
He had launched the Shepherd Cox project a few years ago. Through this project, he was able to attract a lot of investment from UK-based investors as well as foreign investors.
Eventually, he stopped paying the investors back and later filed for bankruptcy.
The following review will explore further how Nick Carlile ran the Shepherd Cox scam and why you should avoid dealing with unregulated collective investment schemes (UCIS):
How Nick Carlile and Lee Bramzell Ran the Shepherd Cox Hotels Scam:
Before running Shepherd Cox, Nick used to run Platinum Portfolio Builder, another notorious company which didn’t have many happy clients.
Later, he partnered with Lee Bramzell and started Shepherd Cox. Here, they bought old hotels, claimed to refurbish them and then started selling leasehold rooms within the hotels to investors.
The project didn’t materialize and investors started to express their concerns before the pandemic had started.
In 2021, Nick Carlile filed for bankruptcy as the amount he owed to investors at the time was around £21 million.
Here’s a snippet of his bankruptcy notice:
How Nick Carlile Ran the Scam:
Nick and Lee had promoted Shepherd Cox Hotels as a way for people to buy hotel rooms which they can profit off of.
They promised guaranteed rentals of 8% per annum for 5 years and guaranteed buy-backs after that duration for 115% of the invested amount. Certainly, the proposition was lucrative and many people decided to invest with Nick.
It’s a common business model where people make hotel room investments. However, they don’t work in most cases.
Shepherd Cox isn’t the only company which offered this scheme. Another firm offering a similar investment was Signature Living and both of them have worked together in the past.
The company paid the guaranteed rentals for a while. However, they stopped paying eventually.
Initially, they stopped paying most of their foreign investors who were usually based in Singapore, Taiwan and Hong Kong. They kept paying their UK-based investors for some time probably because they didn’t want the attention of local authorities.
The company had a business relationship with 2 companies in those countries and one of them became the focus of a police investigation in 2020.
Shepherd Cox’s investors owned room leases only. They didn’t have freehold interest and had no ownership over the rest of the hotel such as the kitchen, the land on which hotel was built, lounge, etc.
The Pandemic and Lawsuits:
When the pandemic started in 2020, Shepherd Cox announced that it was closing most of its hotels because of it.
They weren’t the only ones as many hotels had to close due to COVID-19. However, they had stopped paying the guaranteed rentals well before the outbreak.
In some cases, they hadn’t paid rentals for over a year even though the investors had requested frequently.
However, Nick Carlile kept making his company seem like it was successful. Even if the company hadn’t paid hundreds of investors for months, the company announced the acquisition of 2 new hotels: The Crab Manor in Thirsk and The Olde Barn in Marston.
Clearly, many investors objected. They thought Nick and Lee had used their funds to purchase those 2 hotels for themselves.
Many wondered if Shepherd Cox offered them fair market price for their investments either, which was obviously not the case.
The investors had actually paid 200%-600% of what the rooms were truly worth.
In April 2020, the investors had filed claims against Nick Carlile’s Shepherd Cox hotels at the High Court in London.
The firm had bought the hotels for £6.5 million and sold their rooms to investors for around £14.8 million.
Investors had filed claims regarding The Comfort Inn Hotel, The Travelodge Hotel, The George Hotel, The Best Western Grand Hotel, The Sandpiper Hotel and The Jersey Arms Hotel.
There were suspicions that Nick Carlile and Lee Bramzell had used some of the hotels as security for taking loans.
After the hotels had closed, investors couldn’t visit their rooms. This meant the investors of Shepherd Cox couldn’t even check the condition of their rooms.
IVA Proposals and The Aftermath:
Near the end of 2020, Nick Carlile and Lee Bramzell released their IVA proposals. They were among the sketchiest IVA proposals a company director can release.
Many investors read through the proposals and realized that Nick and Lee were stalling them until they could use the ‘pre-pack’ administration of Festival Hotels Group Ltd, leaving them with nothing.
In their initial IVA proposal, Nick and Lee declared personal debts of a little over £19.5 million and £15 million respectively. They didn’t mention the room investors who had paid £16 million for the bedrooms.
Furthermore, they didn’t add the claims their hotels’ administrators had made. Both Nick and Lee claimed they excluded the administrators’ claims because they didn’t agree with them.
Through their IVA proposals, Nick Carlile and Lee Bramzell were trying to get away with their multi-million scam unscathed
What’s worse is that Nick Carlile and Lee Bramzell put both of their personal properties into the “Excluded Asset” category. Nick said that he was separated from his wife and only owns 50% of the property where she lives.
He had put his 50% share in the ‘Excluded Assets’ list as well.
In the initial IVA proposal, Nick and Lee had proposed a 5-year payment plan for the investors. They even put their vehicles in the Excluded Assets list.
The duo claimed to offer repayments through the Festival Hotels Group Ltd. Before declaring bankruptcy, Nick Carlile was 38% owner in this firm.
Festival Hotels Group Ltd claimed to run multiple hotels such as The Crab & Lobster and The New Hobbit Inn. Nick and Lee claimed in the IVA proposal that they will operate these hotels for the coming 5 years, generate profit and pay creditors through the dividends they declare.
In other words, Nick Carlile and Lee Bramzell could have easily declared no dividends and avoided paying the creditors in this proposal.
Basically, they were offering nothing to the creditors.
Nick Carlile offered 11 residential investment properties with equity of £200,000+. He claimed that the local estate agents, Bell & Co had performed the valuation. However, Bell & Co Estates Limited only had 2 directors and Nick was one of them.
He didn’t mention this fact in the IVA proposal. Nick had started Bell & Co in July 2019 and was using it to dupe the creditors.
It’s a common strategy among shady debtors to get a friendly estate agent to undervalue their properties. This way, they can sell the same to a friend who would also have a side arrangement with them.
IVA Proposals After Nick Carlile’s Bankruptcy
After Nick Carlile was declared bankrupt, Lee Bramzell issued a new IVA proposal in July 2021. This was a worse proposal and didn’t raise much confidence with the investors of Shepherd Cox.
After all, the bankruptcy of Nick Carlile and Lee Bramzell was more beneficial for the creditors as it gave them access to their personal assets which the duo had kept in the “Excluded” category.
In late July 2021, creditors accepted Lee’s updated IVA proposal. However, by that time, the number of hotels under the ownership of Festivals Hotels Group had reduced from ten to five.
Furthermore, in the proposal, Lee Bramzell didn’t share a very important fact about one of the hotels under the ownership of FHG. There was a petition against Comfort Inn Sunderland, one of his hotels, which can cause the company to lose that hotel.
Speculations and What Other People Said About Nick Carlile
Nick had started the multi-million hotel investment scam with false promises and exaggerated claims. Although hundreds of people fell for it, many investors were skeptical as well.
I found a detailed discussion talking about Nick’s claims. As you will see, several people had predicted how Shepherd Cox will scam its investors:
Here, a person asked if someone has dealt with Platinum Portfolio Builder and Shepherd Cox and do they seem credible.
Several users pointed out that both of these companies seemed shady and suggested avoiding them. Keep in mind that Nick Carlile was behind both of these firms.
One user explained the scam. He said they buy a terrible hotel for a small sum then sell some of its rooms at exaggerated prices. They assure the buyers that they will get ‘assured rentals’ of 8% a year.
Then, the company pays these investors some of their own once or twice until they are certain that the investors wouldn’t buy any additional rooms.
Afterwards, they stop paying and ignore any phone calls from the investors as well. Clearly, they are extremely unethical and borderline illegal.
Another user pointed out that it’s an unregulated, illiquid investment where your income is dependent on a ton of additional factors such as quality, location and upkeep.
No one in the discussion recommended Nick Carlile’s marketed scheme.
There’s no doubt that Nick Carlile scammed hundreds of investors through Shepherd Cox. He claimed to be a property guru with 25 years of experience. However, it seems his expertise was limited to defrauding people.
This is why you should be extremely cautious of unregulated investment schemes. If something sounds too good to be true, chances are, it is.
Such swindlers rely on manipulative marketing and false promises to trap their victims. Always check if an investment is regulated or not.
Avoid investing in unregulated schemes.
Nick Carlile ran a multi-million property scam with Lee Bramzell through Shepherd Cox. He was declared bankrupt in 2021 when he owed £21 million to creditors.
- Notorious for running unregulated property investment schemes
- Declared bankrupt after owing £21 million to investors