Attorney Tracks Ticket Fraud

An American lawyer with experience in class actions is trying to track down those responsible for a U.K. ticketing scam that’s left sports and music lovers at least £3.5 million ($6.2 million) out of pocket.

James R. Moriarty flew to the U.K. for the Sept. 9 creditors’ meeting of Xclusive Leisure & Hospitality Ltd. and Xclusive Tickets Ltd., which have both filed for insolvency with combined debts that may top £4 million.

Alan Thomas Scott, the sole director of both companies, told creditors the 2-year-old firms tanked after he spent £1 million on advertising – to make sure his firms were on top of Google’s search results – and gave £2 million in cash to the person who was supposed to supply the tickets.

The money allegedly went to Richard Smith of Peter’s Tickets, which was trading from a north London service office that’s now empty.

After the meeting at London’s Brent Cross Holiday Inn, Moriarty – a partner with Moriarty Leyendecker Erben – told BBC Radio 4 that it’s time the British government did something about the situation.

His company, which has offices in Houston and Boulder, Colo., is in the process of tracking down the history of what he believes are fraudulent ticket sales and determining who is responsible.

He’s set up, which says he’s successfully represented clients in civil cases against Shell Oil, Tenet Healthcare, Prudential Securities and Marriott, among others – and is continually collecting information.

He’s believed to have gotten involved after he bought tickets to the Summer Olympics in Beijing from Xclusive and didn’t receive them.

He told BBC that the U.K. government should be embarrassed when the mother of British double-Olympic gold medallist swimmer Rebecca Adlington misses seeing her daughter’s triumphs because she bought tickets from Xclusive and never received them.

Lane Bednash of insolvency experts Valentine and Co., who has previously dealt with the bankruptcies of Elite Ticket Shop and Ticket Tout and is also winding up Xclusive, said he’s not at liberty to discuss whether he’ll refer the matter to the Department for Business Enterprise and Regulatory Reform (BERR).

Xclusive owed 3,500 people money for 18,000 undelivered tickets. Most were for the Olympics and sold around the world, although many others were sold for U.K. festivals including V, Reading and Leeds.

The biggest creditor will likely be Wirecard, the global financial services company that underwrites the money major credit card companies will have to refund to customers. It claims it is owed £2.5 million ($4.4 million). Scott said he’s owed £141,114 he claims he lent to Xclusive.

A quick look at the companies’ assets and liabilities suggests none of the creditors are likely to get a cent.
Bednash said many of them were suspicious that Scott didn’t even seem “a little uncomfortable” that he’d handed over nearly £2 million in cash and seems to have lost it.

Scott said he’d paid in cash because the “shadowy, cash-based but not illegal” secondary ticketing business works that way.

He said he’d done business with Smith and Peter’s Tickets for years and that he’d always found the company to be reliable. He also said he’s notified the police about the money and Smith’s alleged disappearance.

Scott also told creditors that he knew Smith quite well and had even visited his house on one occasion.

Asked if he’d looked for Smith at his home address, he said he couldn’t remember where he lived.

According to the Daily Mirror, both the Xclusive companies are connected to ticket tout Terry Shepherd, who has run a string of failed ticket sellers and is barred from holding a directorship until 2013.

Under the terms of the U.K.’s insolvency laws, he’d face prison if he was involved in the formation, promotion or management of a company.

Scott admitted to creditors that Shepherd was a paid consultant to the Xclusive companies.

The Mirror believes Shepherd is also behind, which is registered in Spain. The company and its Web site disappeared after failing to deliver an estimated £3.5 million worth of tickets to the same U.K. festivals and shows by top artists including Madonna and George Michael.

The paper also claims he’s operating and originally tried trading as SOS Ticketmaster, but Pollstar has learned that the real Ticketmaster’s lawyers soon put a stop to it.