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InvestUS Exit Strategy (Real Estate Investments USA Plc)


InvestUS was an Unregulated Collective Investment Scheme (UCIS) in operation between June 2013 and June 2015. The opportunity was the brainchild of Steven Wright, a former director of Cherish Wealth Management, and centred around the US housing market.

The formula was simple: following the financial crash of 2008 and subsequent decimation of the US housing market there was a huge number of repossessed houses in America. InvestUS would snap properties like these up in Chicago, Florida and Detroit for very little money. They would then renovate the houses for let or sale, earning a healthy profit along the way.

Recommended by unregulated introducers

Investment in the InvestUS UCIS was recommended by numerous firms, including Avacade Limited (trading as Avacade Investment Options) and their re-incarnation, Alexandra Associates (UK) Limited (trading as Avacade Future Solutions). 

Both were unregulated introducers, who offered a free non-advised pension report via cold calls, with customers then passed to a number of authorised firms including Shah Wealth Management, of which Cherish Wealth Management was an appointed representative, and Black Star Wealth Management

Many of those targeted were ordinary working people who had little or no knowledge of the murky world of high-risk investments. They were talked into transferring their money over to Self-Invested Personal Pensions (SIPPs) and then into the InvestUS scheme, despite their original pensions performing perfectly well. In total, it’s thought around £77 million was invested via cash or SIPP.

Investors were promised returns of 15%. However, in reality the story was dramatically different, as the auditors recorded in InvestUS’ accounts to March 2017.

Funds fraudulently diverted

The scheme’s accounts showed that investors’ funds went initially to Global Custodial Services to be held on behalf of Real Estate Investments USA Plc who, in turn, lent the funds to three companies – Right Buy Properties LLC, Exit Strategy LLC and Rebuilding America LLC.

Interest was supposed to be collected at the rate of 16%, with 1% being used to cover all administration costs and the balance returned to investors. Unfortunately, all three borrowers went into default and racked up a combined interest unpaid bill of £4.6 million. 

Worse still, despite a successful $50 million US court case against Right to Buy Properties for fraudulently diverting funds to alternative projects, the chances of investors recovering their funds looked dubious at best.

Worryingly, the auditors also noted the “information available to date had been inhibited by the lack of detailed accounting”, and that they were “unable to provide evidence of the borrowing companies’ finances.” 

These findings were at odds with the upbeat commentary from Wright, the scheme’s founder, who was quoted as saying: “there is no doubt that the investors will get re-paid their funds, it’s just a question of timing. But we can’t say because that depends on sales and income.”

Little warning of the risks involved

Those who invested in InvestUS should have been informed of the risks involved and told the scheme was unregulated. The financial advisory firms, like Cherish Wealth Management, should also have ensured investors were sufficiently financially stable to enter into such an agreement. 

Unfortunately, none of this happened. Instead, investors were wrongly talked into taking a gamble that didn’t work out and left facing a financially insecure retirement as a result.

This scenario should never have been allowed to unfold and the team at Beat the Banks are committed to helping victims of scams like this. If you were persuaded by advisors to switch your money into a SIPP and then to invest in schemes like InvestUS, we would like to hear from you. Call us on 0800 193 1234 for a friendly, no-obligation chat to find out what we can do for you.

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