CIO Sentenced to 7 Years in Jail for Fraud, Money Laundering

Ian Robert Woodall

The former interim CIO for Westminster City Council in London has been sentenced to seven years in jail after being found guilty of fraud and money laundering following a 10-day trial at Southwark Crown Court.

According to London Metropolitan Police, between January 2009 and December 2012, Ian Robert Woodall defrauded the pension fund of Westminster City Council of more than £1 million ($1.3 million).

Woodall was employed as a contractor through his own firm Lonkal Consulting Limited, and despite not being an employee of Westminster City Council, he had been the interim CIO for several years through various contracts.

In 2010, the council decided to hire a permanent pension fund manager, and the role was externally advertised. As a result, Woodall stopped working for the council around October or November of 2010, according to the police. In 2013, an accountancy firm which had audit responsibility for the council discovered significant discrepancies within the staff pension fund and found that approximately £1 million had been illegally removed.

After senior auditors investigated that allegation, they identified four suspicious transfers that occurred in 2010 for which there were no records or information available. The transfers ranged in size from more than £22,000 to £741,000.

As part of that initial review, in December 2013, the auditors conducted an initial fact-finding interview with Woodall, who was unable to provide any specific detail into the transactions. The council then decided to report the matter to the Metropolitan Police for further investigation.

The Metropolitan Police’s Fraud Squad, which is part of the Organized Crime Command, launched an investigation and found that Woodall had abused his position to steal the funds. The police found Woodall had diverted the funds through Swiss bank accounts and then back into the UK, where it was distributed to his personal and company bank accounts.

Police say Woodall then used this stolen money to fund the purchase of his house and cars, and to support his lifestyle.

“Woodall betrayed his colleagues and employers by stealing their money to fund his own lifestyle,” Detective Sergeant Andrew Bailey of the Met’s Fraud Squad said in a release. “Work remains ongoing to recover the stolen money and we hope this sentence shows we are determined to find and punish those engaged in fraudulent activities.”

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Tags: Ian Robert Woodall, Money Laundering, Pension, Westminster City Council

Market volatility and fluctuating investor sentiment contributed to making 2018 the worst year for hedge funds in a decade.

According to the Preqin All-Strategies Hedge Fund benchmark, hedge funds finished the year with losses of 3.42%, which was the lowest return the industry has seen since 2008, and the first time it reported negative returns since 2011.

This was in stark contrast to last year, when hedge funds returned 11.41% and reported gains every month.

“A turbulent end to the year means it comes as little surprise that the hedge fund industry ended 2018 in negative territory,” Ross Ford, Preqin’s head of hedge fund research, said in a release. “While losses didn’t approach the level seen in 2008, they are still a blow to investor confidence, especially given how widespread they are. It’s no surprise that the majority of investors feel underwhelmed by hedge funds’ performance.”

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Preqin also said performance difficulties among hedge funds were widespread in 2018, as 59% of hedge funds posted negative returns for the year, with 39% seeing losses greater than 5%. Only 21% of funds reported gains that exceeded 5% compared to 67% of funds earning more than 5% in 2017.

Additionally, 2018 saw a contraction in the number of active hedge fund as liquidations exceeded launches. Although there were fewer liquidations in 2018—746 compared to 1,130 in 2017—the number of funds launched fell sharply and nearly halved to 609 from 1,169. It was also the fifth consecutive year in which hedge fund launch activity has fallen, as there were 15,837 active funds at the end of 2018 compared with 15,947 at the end of 2017.

According to Preqin interviews with investors, a majority (55%) said they felt their hedge fund investments fell short of expectations in 2018, while 39% said their expectations were met, with only 8% saying their hedge fund returns exceeded expectations. In contrast, 72% reported that their hedge fund portfolios surpassed their expectations the previous year.

Tags: Hedge Funds, performance, Preqin