DURING a lengthy trial at Bradford Crown Court, which ended yesterday, conman John Neil Hirst, aged 61, admitted his role in a Ponzi scheme, which saw British expats in Mallorca – many of them pensioners with limited saving – and investors in the UK duped out of an estimated £10-million.
His estranged wife, Linda, 62, was convicted on three charges of money laundering, involving sums totalling nearly £740,000. She was also found guilty of deception.
And Richard Pollett, a 70-year-old British accountant living in Mallorca, was found guilty of conspiracy to defraud.
The jury dismissed money laundering charges against Daniel Hirst, John Hirst’s 35-year-old solicitor son, and Zoe Waite, 37, Linda Hirst’s daughter.
Trial judge, Jonathan Durham Hall QC, will pass sentences on August 31.
However, at the request of several victims of the scam, I’ve been asked to narrate the story of my cameo role in helping to expose Hirst and spark off the long investigation that resulted in the greedy, fork-tongued hustler and his sidekicks being nailed.
Others – especially two redoubtable women victims – deserve full credit for their unwavering determination in ensuring the man nicknamed ‘Nice John’ faced justice.
* * * * * * * * * *
In the many years of living within a few kilometres of each other on Mallorca, John Hirst and I never met, but I knew him by reputation as an pushy social climber, weaving his web around the island’s British expatriate social circuit.
In fact, he joined almost every club that met for a jolly – from the exclusive Santa Ponsa Country Club, a prestigious local golf club to The 41 Club, English Speakers Residents Association and the Majorca Cricket Club.
Hirst was an impeccably-dressed charmer, glad-handing all within touching distance, oozing confidence and bonhomie, a stellar presence at any shindig, who’d assembled an impressive network of contacts, including Paul Abrey, the British Consul.
Meanwhile, the jovial Yorkshireman ensured the rumour mill buzzed with word that he possessed the Midas touch in transforming meagre saving into small fortunes through his Gilher investment fund.
He certainly lived up to every euro of a millionaire financier’s lifestyle…the lavish villa, a Mercedes for him, a chic convertible for wife Linda, exotic holidays, designer wardrobes and expensive bling, not forgetting the obligatory motor yacht.
A real, Mallorcan success story, you’d think, for a man from Brighouse, West Yorkshire, who arrived on the island in 2003, apparently penniless – according to a source – and forced to eke out a living as a day labourer, commuting to jobs on a push-bike from a rented flat in Calvia Town.
However, this can be an Alice in Wonderland place, overflowing with Walter Mitty characters, who come here and invent new identities for themselves. Most are harmless fantasists, but some are trouble and, in those days, free-spending Hirst – nicknamed ‘Nice John’ by all who crossed his cheating path – had me wondering which of the two categories he fell into.
Then, at a birthday party in 2006, a chance conversation about Hirst with an acquaintance finally triggered my instincts that maybe lurking beneath the beaming, perma-tanned veneer lay a shameless crook.
The acquaintance, an expat of long standing, knew I was working on a story about a German conman, who was offering an eight percent return to investors, but had disappeared owing over two million euros.
‘Eight percent is peanuts,’ said my acquaintance and he told me he had his money with ‘a bloke who delivers 18 percent a year, even 20 if you let it roll over.’
Intrigued, I asked who was this financial wizard and the reply came, ‘John Hirst, though everyone calls him ‘Nice John’, because he’s the nicest guy you could ever meet.’
Frankly, I told the expat, the rewards sounded too incredible – banks were then only offering a few percent, even before the Eurozone crisis brought markets crashing.
Out of curiosity, the following day I put in a call to London, where my daughter is a divisional director of an international bank, and asked her whether it was possibly for a fund manager to guarantee 20 percent annual returns for clients.
Lauren simply said, ‘Never in your wildest dreams, Dad. Nobody can consistently deliver that. Think about it…if someone’s paying 20 percent a year, they have to be making up to 40 to cover their own profits, commissions and overheads. It’s pure fantasy.’
As an extra check, I contacted the Financial Securities Authority (FSA), the British government’s City regulator, to see if John Hirst or his Gilher fund were listed. Both drew blanks. Nor were they on the rolls of the USA’s Securities & Exchange Commission (SEC), which polices Wall Street.
As a reporter I’ve covered several cases of pyramid fraud – or Ponzi schemes, after the 1920s US con artist, Charles Ponzi – and, unerringly, they follow a similar pattern: glib deceptions, pandering to people’s weakness over money.
Invariably, they are run by a plausible operator you’d be proud to call your best buddy, who oozes wealth and, obligingly, is happy to share the secrets of his success.
He brags about his infallible system and the investor – ‘dupe’ or ‘mark’ in Ponzi parlance – is so intoxicated with the notion of making his cash go a country mile further than any legitimate financial institution, he quickly put his money where his mouth is, without even doing any basic due diligence checks with the FSA or SEC.
However, if any lingering doubts exist, they are allayed when the fraudster starts to deliver on his shallow promises. Each month an interest payment arrives and, to add legitimacy to the fraud, it’s followed by a statement, showing the investor’s capital intact and even growing.
It leaves the ‘mark’ believing the golden goose is no fairytale after all and is laying its eggs on his doorstep.
So happy is he, he can’t wait to share news of his good fortune with friends and family, and they, too, can’t wait to plough in their savings and reap a dividend beyond belief. Hence the ‘pyramid’ is being constructed
What they don’t realises is they are being repaid with a fraction of their own capital, while the bulk is being hived off by the scammer. And, as long as fresh cash feeds the bonfire of financial vanities, the ‘long con’ continues for years, as Bernie Madoff proved over three decades of suckering New York’s finest.
Inevitably, the day of reckoning arrives and the ‘sting’ is exposed.
In Hirst’s case, it was the looming, financial storm clouds. With fewer people to dupe, the cash pyramid was depleting fast and he was struggling to repay clients.
Realising the con had run its course, he decided to scarper before the law stepped in. And, naturally, he had a plausible excuse for doing so.
With wife Linda, Hirst decamped back to Britain around August, 2009, claiming he was seriously ill, yet assuring investors their money was safe and he’d return it once the so-called Gilher fund was liquidated.
It was a classic stunt. Hirst was using the sympathy vote to buy time, fend off creditors, and perhaps disperse whatever remained of his ill-gotten gains.
However, what clinched my ultimate suspicions were the conman’s final acts before vanishing from Mallorca.
He sold his Mercedes and Linda’s convertible at knock-down prices and disposed of his motor yacht. Plus, according to local sources, he’d had his Santa Ponsa home valued at €1.25 million, which – minus the €350,000 mortgage – would give him a generous profit when sold.
The autumn sun rose late on Saturday, October 31, 2009, but by 10.00 a.m. its rays were dazzling in a blissfully cloudless sky that was the deep, iridescent blue unique to the Med at that time of year.
I’d been toiling hard, revising my first novel – The Mallorcan Assignment, a high-tension thriller about jihadi terrorists plotting a bombing outrage – which was due for publication the following spring, and the fortitude of my ever-patient wife, Barbara, was nearing its limits. So it was decided we’d picnic on the beach, relax and I’d turn my attentions to the mental aerobics of a cryptic crossword.
Then the phone rang. It was Barbara’s sister, Janet Corbin. A lady not prone to histrionics, she sounded upset and asked plaintively if she could she come and discuss an urgent problem.
Janet arrived, sat on the sofa and somehow remained rational enough to say, ‘I think I’ve been stupid and might have lost €200,000 in an investment fund.’
In her 60s, a divorcee and teacher, I knew it was a colossal sum for her to risk.
Clutched in her hand was a file of papers relating to a fund called Gilher Inc., managed by a John Hirst and based in the Seychelles, a location that filled me with little confidence and rekindled all my earlier suspicions about ‘Nice John’.
In his introductory letter Hirst claimed to have long experience in financial services, was semi-retired, but still played the markets with consistent success. Friends and family placed money with him and now he was prepared to put his expertise at the service of others.
The letter stated, ‘I trade movements on the Dow Jones Index, rather than buying individual shares, using technical analysis to give me a feel for which way the market is moving.
‘While the system is not an exact science it works sufficiently well to enable me to guarantee a 20% return per annum to clients. This is made up by 1.5% per month and a year-end bonus of 2% provided the original investment continues. The minimum investment is £10,000 or the €uro/US$ equivalent.’
Despite her outward calm, Janet’s stoicism was fading as I scanned the ‘simple contract’, as Hirst described it, before trousering her cash. The deal had been struck five months earlier, in June, but she’d received only two monthly ‘interest’ payments, totalling €6,000.
Like all Gilher investors I know of – including my 2006 birthday party acquaintance – Janet has received not a centimo since.
What my sister-in-law was able to provide, however, were the names of a clutch of other Hirst clients, some of whom had been introduced by Richard Pollett, a Santa Ponsa-based British accountant I’d played tennis with occasionally.
Meanwhile, I examined Hirst’s paperwork with mounting disbelief. A semi-literate 14-year-old could have written it better. There was no letter-heading, it was unprofessional and notably absent was any mention of company registration, dealer license, regulator or compliance with anti-money laundering regulations – all the requirements to trade in financial services.
What Janet said next, though, disturbed me even more. Teary-eyed, she noted chillingly, ‘I have to face up to the prospect of losing almost everything.’
Then she pleaded, ‘You’re an investigative journalist, Hugh, so find out if this scheme is legitimate. If it isn’t, then help me bring Hirst to justice.’
At noon that gloriously Saturday, I started work on a quest to discover where Janet’s money had gone, if Gilher was legal and where Hirst was. Little did I realise then that in the next month, working night and day, I’d make hundreds of phone calls – many to the Britain and America – and my email inbox would overflow with messages from anxious investors.
Within the next few days I’d interviewed at least a half-dozen of them, most delivered into Hirst’s grasping clutches by Pollett.
One, a Midlands businessman, had become so frustrated about not being able to access his money, he’d laid an official complaint – a denuncia – before a Palma court and vainly tried to get the Spanish National Police to investigate.
My trail then led to an investor who prefers to remain anonymous, but was also trying vainly to trace her nemesis in the UK.
Together we tracked a UK phone number for Linda Hirst, listed in her maiden name of Waite, to the Byfleet area of Surrey. Although her calls to it went unanswered, the location was to play a critical role in Hirst’s unmasking.
On November 5, she asked me to meet her and some fellow investors at a local cafe to give them an update on my research and suggest some options for them.
Before doing so I contacted Pollett and interviewed him in Santa Ponsa. He brought along a thick file – presumably details of clients he’d introduced to Hirst – and claimed his wife, Gill, was an investor, as was his daughter’s trust fund.
What I wanted to know was why a supposedly savvy financial advisor believed it possible for someone to deliver 20 percent dividends per annum, guaranteed.
‘You don’t know John,’ Pollett insisted. ‘And it’s possible.’
‘Well nobody’s done it yet, so I suppose he could be a first,’ I replied cynically.
Next I asked how much investors’ savings he’d channelled into Gilher. After a long moment, he admitted, ‘About ten to twelve million.’
I stifled a gasp, before suggesting, ‘Doesn’t it look dodgy to you, Richard?’
Pollett stared back blankly and didn’t answer.
At 4.00 p.m. I met the unnamed investor and her friends. Only there were about 40 of them, all wearing the same, strained, bewildered
Several familiar faces were in the gathering and only then did it register how many gullible folk were victims of what was increasingly looking to me like an unscrupulous, hard-nosed swindle.
Breaking bad news is never easy. And, even though, at that time, there could have been a genuine explanation for the behaviour of the man all still referred to as ‘Nice John’, I was convinced they’d been duped, though I was reluctant to say as much.
So I eased the pain as gently as possible, saying that if Hirst had their money, he could come forward and repay it, but he needed to be flushed out through the oxygen of publicity.
Firstly, I suggested the investors denounce Hirst as a group directly to the Spanish police, not via a judge in Palma, who might take months to order a probe.
Secondly, I calculated a newspaper story of their plight, preferably in a UK national publication, would also pressure the authorities to act.
However, for the ensuing days I continued to interview other Gilher clients and all echoed a familiar theme: they’d been lulled by Hirst – some coerced by Pollett – into parting with sums ranging from a few thousand to €1.5million.
I then traced Billy Morris, the conman’s handyman, to El Toro, where the big, moustachioed northerner was happy to talk about his best friend and boss, ‘Nice John’.
‘Great bloke,’ Billy insisted, before telling me it was he who ferried the Hirsts’ personal possessions back to Britain, receiving telephone instructions where to deliver the goods after he arrived in Dover.
‘Where did John Hirst tell you to go?’ I asked.
Billy wasn’t sure, only that it was a self-storage repository, painted yellow and less than a two-hour’s drive away, where Hirst was waiting.
‘Does the name Byfleet sound familiar?’ I asked.
Billy pondered, then nodded.
‘Did you take any papers back,’ I queried next.
‘Yes, in a big box – I think it was marked ‘clients’,’ replied Billy, of whom there is no suggestion of any wrongdoing.
The conversation then turned to what services he performed for Hirst. He chauffeured him sometimes, he said, looked after odd jobs around the house and garden and, once a month, posted a batch of between 120 and 130 letters.
‘They were statement to clients,’ explained Billy. ‘About half went to people in Mallorca, the rest mainly to addresses in Britain.’
I immediately recognised the importance of the British connection, because it would become pivotal in bringing in the UK authorities.
Back at my office, I did a Google Earth search of Byfleet. On its fringes was a repository with space to rent: aptly it was called The Big Yellow Storage Unit.
So, towards the end of a frenzied fortnight, having put together the jigsaw of Hirst’s great escape from Mallorca, there was enough murk surrounding him to justify a news story, detailing the investors alarm at his actions, and The Sunday Telegraph was keen to print it.
To flag it up in advance, I called Britain’s Serious Fraud Squad (SFO) and explained a Sunday newspaper was running a piece on John Hirst’s dubious Gilher fund and his disappearance back to Britain. Their reaction was instant and positive.
The SFO asked for every piece of information I had, including a CD of the Hirsts’ €200,000 wedding in 2006 at the opulent Maricel Hotel, where US President Bill Clinton once stayed. To add salt to their wounds, many of the investors were guests.
And, around mid-day on Friday, November 12, I received a call from an SFO contact, who said, ‘We’re at The Big Yellow Storage Unit in Byfleet and we’ve found a lot of interesting stuff.’
It needed no spelling out that this was the paper trail of investors’ cash and, for the first time, I felt certain the Hirst/Gilher case was being taken seriously, even though – as I’d warned the gathering of investors – it could take years to bring a case to court.
Two days later the story, headlined: ‘Majorca-based British financier probed by Serious Fraud Squad’ appeared in The Sunday Telegraph, revealing the fears of desperate investors.
I covered the Mallorca angle, while reporters in Britain discovered the fraudster had returned to his modest home at Warren Farm Home Park, Woking, before scurrying north to Yorkshire, where – according to his solicitor – he was receiving treatment for myeloid leukaemia.
A few days later, I read an anonymous message posted on Majorca Cricket Club’s website, inferring Hirst had once served a prison term for fraud, which I’d long suspected.
Tracking down the message-poster in England, I discovered it was a relative of Hirst, who claimed ‘Nice John’ even scammed a member of his own family.
More digging in the UK by reporters in Yorkshire revealed details of Hirst’s first fraud trial. So, the following Sunday a further story appeared in The Telegraph, headlined, ‘Majorca-based British financier investigated by SFO convicted of offence in 1990s.’
It reported Hirst served 30 months (of a two-and-a-half-year sentence) in 1992 for defrauding miners out £211,000, while working as a salesman for Allied Dunbar.
Eventually, Hirst was questioned by the SFO and, in April, 2011, charged with conspiracy to defraud and money laundering. Wife Linda, Hirst’s son Daniel, a Bradford lawyer, and Linda’s daughter, Zoe Waite, were later charged with various counts of money laundering.
After several months on remand in Palma Prison, Pollett was extradited from Mallorca and charged with conspiracy.
As I said in the premable, this has just been the story of my minor role in exposing John Hirst as the devious, wicked and thoroughly unscrupulous conman he is.
Others deserve acclaim in forcing the authorities in Britain and Spain into making sure Mallorca’s Madoff and his partners in crime were prosecuted and received the full force of the law.
And the true heroines in this are two relentless victims of the vicious scam: Janet Corbin and the lady who prefers to remain unnamed.
They drove the case forward, helped police gather evidence, chivvied reluctant witnesses into speaking up and went through nearly three years of hell to see Hirst tried before a British judge.
They paid for their efforts in terms of health – caused by physical and mental anguish – yet never relented in their quest.
The SFO says compensation proceedings are to follow and I dearly hope the £5-million still unaccounted for is identified.
Meanwhile, if it counts for anything, victims of John and Linda Hirst, along with Richard Pollett, have received justice, such as it is, and they owe Janet Corbin and my unnamed friend a huge debt.
Finally, this story is in memory of three Gilher investor, who tragically didn’t live to see their retribution – John Rule, Sue Schuber and Victor Hearmon.
© Hugh Ash 2012. Re-publication of this matter, in full or part, is strictly prohibited without prior permission of the writer