‘He lived among his victims with no apparent shame or remorse’
The respected finance director of a residents’ management company at Bryanston Court in central London was exposed as a thief after a £1.8 million cheque bounced.
Brian Copsey, an accountant from New Zealand, plundered his neighbours of £1.1 million “to pay for his children’s education” … and to fund an “extravagant lifestyle”.
On Tuesday, Copsey, 60, was jailed for eight years at Southwark Crown Court, and banned from being a company director for 12 years.
He stole the money at the 57-flat block, near Marble Arch, by forging bank documents authorising money paid in service charges by residents. The funds were transferred in £100,000 tranches to companies that he controlled.
Because he was a chartered accountant, Copsey was appointed to finance chairman and director of Bryanston Court Management Limited and Bryanston Court Freehold Limited.
He was responsible for gathering in the service charges at the flats, and manage funds for a substantial planned refurbishment of the building.
Instead, he decided to spend defrauded funds totaling £1,160,525 on himself.
Copsey was arrested on October 28 2012 by Westminster CID investigation after the horrified board learned that a cheque for £1.8 million had bounced.
For two years and nine months, bank transfers were made from the two companies to companies over which Copsey had sole control.
The cash was then doled out to recipients who included his wife, his two sons and to their private school in New Zealand. He also made payments towards his own personal bills.
Copsey attempted to hide his fraud from his neighbours by emailing board members to say the funds were safely invested in the money markets to achieve some “additional yield”.
Unsurprisingly, nothing was returned.
Copsey had been spending the money as if it were his own, and for the benefit of himself, his associates and his family.
“Brian Copsey abused the trust placed in him repeatedly for almost three years,” said Detective Constable Julie Jode of Westminster CID.
“The victims in this case were neighbours and friends whom he saw on a daily basis. Despite the revelations of Mr Copsey’s actions he continued to live among his victims with no apparent shame or remorse.
“These transfers appear to have been made in order for Brian Copsey to spend the money and in effect run these accounts as if they were his ‘pocket money’ accounts at an extortionate loss to multiple victims in this case.
“The victims were Brian Copsey’s neighbours, some of which were friends all living in the same block as him, some being elderly and retired, some who had to take loans out to pay their contribution to the service costs and refurbishments of the building.
“Money which Brian Copsey appears to have disposed of on his own personal bills and commitments.
“Hopefully this conviction will send a strong message to others that the Metropolitan Police Service will seek to arrest and put before the courts anyone engaged in this type of criminality to keep our communities safer.”
COMMENT
There is no denying that a jailed director of a residents’ management company sounds a cautionary note for those who campaign to empower leaseholders.
Especially when the sum involved, £1.1 million, was so vast. This total dwarfs the £120,000 stolen by managing agent Simon Van Houten, employed by Rendall and Rittner, who was jailed last year.
Leaseholders must be vigilant and demand to see evidence of accounts – bank statements and actual invoices, for example – rather than simply rely on breezy assurances.
Brian Copsey has demonstrated that that is equally important, whether dealing with a Rackman or your charming neighbour who lives on the fourth floor.
There will be no shortage of finger-wagging among the usual stooges of the status quo who will use this case as an example of why leaseholders should not manage their own affairs.
It will be argued that property management is best left to “professionals” who are regulated by codes of practice, vigilant trade bodies and have meticulous standards, confirmed by a slightly unfamiliar jumble of letters after their name.
They will be employed, of course, by freeholders of irreproachable character, whose offshore holding companies should cause no alarm at all …
The truth of the matter is that while the leasehold system can and should be reformed, there is little anyone can do to prevent outright criminality.
On this occasion, the man going down was a leasehold resident director of an RMC. But it could be the turn of a property manager, a freeholder, a bent lawyer, surveyor or auditor.
It is an open question what the next leasehold scandal will reveal.
The only certainty is that there will be one.
Related posts:
Chairman of leasehold RMC accused of stealing £1 million
Leaseholders’ money ‘safe’ from £1.3 million fraudster at Hurford Salvi Carr
Fraudster managing agent gets 30 months jail for using East Londoners’ cash to fund high life in Chelsea
LEASE uses debt-collecting Brady Solicitors for leaseholder survey
Having fraudster Simon van Houten manage our flats cost us £100,000
Quango-crat Deep Sagar told: sack ‘disgraced and disgraceful’ Benjamin Mire or sack yourself!
Whilst it is true that there is little that can be done to stop someone who has decided to simply steal the service charges, had the money been stolen by, say, a managing agent, there would likely have been better prospects of recovery via a professional negligence / breach of trust claim and, if necessary, a call on their professional indemnity insurance.
Or the client money protection schemes.
It should be made compulsory that all service charge trust accounts are protected by insurance against fraud.
I agree, but as neither government has not commenced the enacted right to withold nor the penalties,don’t hold your breath.
ME, how can we check that what we are informed is correct and how do we request the balances when they only provide photo-copies of statements.
We had a Cheating House Manager who relived us of over £3,676 we eventually received 95% as a good will gesture, does this GOOD WILL GESTURE ring any bells when considering Price Fixing?
Our Regional Manager refuses to allow monies used by the House Manager some £150 which was from the day she moved in she treated the Managers Phone as her own?
What a silly boy you have been Brian Copsey!
Next time if you want to get hold of service charge trust funds, set up associated companies and engage in a bit of collusive tendering! Oh! and don’t forget the insurance commissions you can help yourself to!
Not only will that keep you out of jail, but because you have used “associated” companies you can still be a member of ARMA.
Brilliant 😀
No doubt members of the Institute for Residential Property Management, the Association of Residential Managing agents and their fellow travelers will want maximum publicity for this case to demonstrate that self-management is not safe. Unfortunately, any claims that the funds held by such people are safer is completely without foundation.
What is there to prevent a Madoff type scam with a managing agent aggregating funds from all developments under its control and simply issuing entirely fake statements about balances?
In reality, nothing.
A great many people who feared their funds would disappear have in recent years switched to paying by direct debit precisely in order to mimimize such risks, or better still, managed to get rid of a managing agent that was simply notorious for its conflicts of interest and poor service. Members of these organisations have had,in recent years to repay six figure sums looted from the reserves of developments they manage, and managed to avoid publicity by doing so, because they could find the money.
Frankly, for the leaseholder it’s a choice between putting money in a bank that might go bust, Barings style, and one that with an endless list of stratagems to monetise your business, and which also might go bust.
I think to put this into perspective we have to remember that there are thousands of extremely well managed self managed sites out there, ours being one of them. We should all be quick off the mark to remind those self pontificating bodies and their legal representatives who try to say RTM Co’s do not work that they DO WORK…. They are only trying to justify their own positions and salaries not to mention keep the heat off all the unscruplious companies operating out there….
And, on the other hand, a lot of those resident controlled schemes use agents that provide a service from “”mmm”to ok to excellent. A lot of those schemes are also very well run until they find out that they still need to do section 20,aren’t keeping service change separate in a section 42 fund, dont comply with section 47 or 48 and look blankly when summary of rights are mentioned, and any other number of mistakes.
The point is neither side of eh coin is right mistakes and ignorance abound on both sides, as does the potential for fraud.
That is not my experience of our RTM or any of the leaseholders I speak to who have a RTM on their sites……. and our funds are kept seperatley as is our sinking fund…
Sadly it is an all to common problem with the number of people not only in business experience but with my other hat on where leaseholders are helped at two websites. I am glad to see that the RTM money is held separately to SC & RF/SF, BUT has the bank confirmed that the monies are recognised as held under section s42? if they haven’t, then they are treated as the company’s money and not, as they should be, as held on trust, and separate from the company’s cash or assets.
AM,
I understand that separate readily identifiable service charge trust accounts cannot be counted as managing/freeholdercompany assets..
In every case an acknowlegement should be obtained from the bank.
Whilst that should protect service charge trust accounts from a managing/freeholding company default,those funds have to be readily identifiable. At what point are those funds readily identifiable and at what point do they cease to be identifiable? Does it refer only to funds in the actual account? what about funds yet to be paid in or funds taken out to pay invoices?
Is there protection against fraud for service charge trust accounts?
Is insurance available to cover service charge trust accounts?
If so, would it be dificult for a company that has a “history” to obtain such insurance?
Fully agree Karen, lets look at how these Managing Agent survive?
We pay £12,000 a year of which 20% is VAT to Peverel Retirement who advertised on the WEB stating that they had 1,500 developments, 50 Area Managers and 5 Regional manager.
Divide the 50 into 1500 this is 30 developments that each Area Manager would have to manage?
As there is only 48 weeks that they can work in a year that means that 30 weeks from the 48 weeks leaves 18 weeks to be divided by 30 developments.
Therefore each development can only be allotted 1.6 weeks a year each?
35 hours a week meant that 0.6 of a week is a 20 further hours, making a total that can be spent per year on each development by the Area Manager is 56 hours a year for each of the 30 developments?
£12,000 a year for Management Fees so divide 56 into £12,000 means that Peverel Retirement earn £214.00 an hour for each of the 56 hours that they allow for MANAGING OUR DEVELOPMENT???
I have been informed that the Area Managers have to undertake unpaid overtime just to keep their heads above water some working over 60 hours to maintain the poor service that they offer?
The Area Managers do not check any weekly or monthly invoice that is sent to HQ but rely on personnel to put together the Invoice Files which are a disgrace with invoices for other development often found and others filed in wrong heading, but mostly all contract documents are removed before they are sent to us for checking as they have been at ABC.
They claim that they can be checked up to 30 days after a contract is agreed but they then do not place the contract documents within the Expenses File, so you have to ask as I have done and 18 months after asking for the Warden Call System documentation only half of the information/documentation has been provided.
No contract document have been seen or sent and we like others are aware we also were possibly Price Fixed as was reported by The Peverel Group to the OFT into Price Fixing where it was stated that possibly all contracts undertaken by Cirrus after late 2006 to 2009 had been Price Fixed,
Peverel Group, own words seen in the OFT Report which can be seen on line???
Chas that is how some agents survive, not by any means all.
No surprisingly I disagree,but bear with me. Whoever is in control, there is always the risk of fraud-“thank you”s to freebies to £1.8m or more. For resident controlled groups there is marginally more risk (though a lot more to lose if the fraudster lives there 🙂 ), so the motto for everyone, RMC/RTE/RTMs especially,is “Trust, But Verify”.
Don’t rely on breezy assurances or excel spreadsheets ensure that the original bank statement wherever the money is are brought to each quarterly board meeting,and when dealing with a block of this size and the level of funds,have the auditor verify that they are correct and reconciled each quarter. Don’t have one signatory or sole online access restrict it to 2 or even 3 if its over £10K and banks will alert you if there are more than a certain number or volume of transactions.
The worry for residents groups is that they rarely understand this nor even ensure that the funds are even held in section 42 accounts. rather than just bash the “stooges” this stooge ( as some say) suggests that a simple advice sheet on the site might be a lot more useful to those you encourage.
We employ managing agents to run our site so no leaseholders have access to any of the funds. I personally go into our managing agents office every 2 months and scrutinise EVERY invoice to ensure we are not being overcharge. I also insist that where possible we use local services who are not vat registered because as we know vat can add 20% onto the overall running costs of a site.
It is important that complacency does not set in once RTM has been achieved and do not assume that you can trust anyone because you can’t.
This man was good,; but not good enough……..
Having any form of direct debit arrangement to the favour of ANYONE is a risk worth avoiding
Watch people’s personal habits, and if they keep a suite at the Savoy or the Westbury…… or have six children at private schools – like my father did – look out
Working out how l can get a position on the board at the Co-op Bank
Pip pip
Martin Ellis Jones
Leaseholders are too complacent when it comes to their money especially in RMCs. They are uncomfortable about questioning their neighbor directors in case it is seen as an assault on their integrity. If neighbor directors are unscrupulous, they will exploit this and say anyone asking questions is a troublemaker (and much worse). In some cases neighbor directors bully leaseholders into agreeing with them on fear of being singled out for special treatment for minor breaches of leases.
As leaseholders wear two hats – that of leaseholders and that of shareholders – their position is complicated. If they wish to challenge the landlord they are in effect challenging themselves. If legal action is necessary the leaseholder has to pay twice, once as an individual leaseholder and once as a shareholder in the landlord company.
Proper, detailed RMC accounts should be a legal requirement, so many items can be lost in abbreviated accounts.
You are right and that is a rub, though the Articles must allow the company to ask shareholders or members to make a contribution, most don’t, and therefore it cannot be approved by a vote. However it actually helps the shareholder by being a leaseholder. While dormant accounts should never be accepted a leaseholder does have the contractual rights in(most) leases for a detailed statement or report or certificate, even an audit, and the statutory right to a summary and the right to inspect the invoices. In most cases the addition of a detailed I & E to most company accounts solves the problem for most.
ME re 23-4 To make them identifiable, the funds passed in and out that are service charge should only go through a trust account, not say a pool account that hold other non SC money eg a Karen type RTM could not use their company account to bank/pay and transfer funds to and from the SC/RF/SF accounts. An agent might use a single trust account, for SC/RF/SF, to bank/pay for all blocks and allocate or reconcile funds between them
I agree this is only worst case protection, and there is yet to be requirement for all landlords and all agents to have a money protection scheme as you suggest.