How an investigation into thousands of suspect online reviews led to a trail of financial losses and damaged reputations, with royal couple Mike and Zara Tindall amongst the losers
When KwikChex started an investigation into how a new crypto business called Nova Wallet instantly jumped into the number 1 rated UK company in Trustpilot’s UK Banking and Money Services (“Best in Banking & Money”), we had no idea that it would lead to a trail of businesses ‘ultra-hyped’ by celebrity endorsements and purported success stories that quickly became catastrophic failures – affecting not just wealthy investors, but also the very vulnerable.
As part of our constant quest to tackle misinformation and prevent fraud, KwikChex has been investigating and taking actions against suspicious online reviews since 2010. In November 2022, we found that a business named Nova Wallet was occupying the Trustpilot UK Best in Banking and Money top spot. Closer examination revealed that it had accumulated over 23,000 reviews in just a matter of a few weeks. The patterns and characteristics of the reviews indicated extreme manipulation – and within a short time, KwikChex had established that these thousands of reviewers had been offered rewards to write positive reviews – something that is unlawful in many countries and which is supposedly against Trustpilot’s rules. At that point it seemed remarkable that Trustpilot’s claimed review fraud detection systems had not discovered the abuse. And a similar situation existed on Google Play, where the Nova Wallet app has received over 26,000 reviews and a 4.9 star rating.
From reviews corruption to celebrity endorsements
A trail quickly led from Nova Wallet and its sister cryptocurrency called VSolidus to a string of technology businesses, including VST Enterprises (VSTE), all connected by one man in particular – Louis-James Davis, a seemingly highly successful tech entrepreneur. Glowing endorsements from the likes of Mike and Zara Tindall, and football legends Harry Redknapp and Kenny Dalglish, who were acting as ‘Global Ambassadors’ for the products and starring in promotional videos, added to the apparently attractive investment prospects. These promotions focused on what was said to be revolutionary technology that would help protect the world from the dangers of Covid, to tackling counterfeit products. The celebrities enthused over the role of the pivotal technology, called ‘VCode’, and its use within a ‘V-Health Passport’ that promised to safely help open up the world – particularly the world of sport, by combining Covid testing with a mobile app. And it was not only celebrities that were endorsing the business – even the then UK Prime Minister, Theresa May commended the VCode innovation, with VSTE CEO Davis participating in a high-profile UK government trade trip to India and posing in photos with May.
In fact, despite massive hype, it all lacked real substance, with there being really only an alternative type of QR code, and none of the crucial technology infrastructure to make it work as had been promised.
Collapse and losses
The VST Enterprises business collapsed with big losses for private investors, business suppliers and Mike and Zara Tindall, who in addition to not being paid £80,000 for their ‘Global Ambassador’ services lost a further £50,000 as investors.
But it was not just the wealthy that lost money – one couple that were extremely vulnerable at the time were persuaded to invest most of their life savings – over £30,000, in the VSTE business. The husband had told an associate of Davis – Chris Lightbody, who was responsible for most of the sales of shares in VSTE, and who earned a commission off each sale, that his wife was suffering from terminal cancer – and Lightbody told him that the investment would mean they would make a huge profit, which would make life much easier for them. Instead, the couple have been devastated by their losses.
Two respected technology businesses that were asked to make the VCode technology work in practical terms – to develop the necessary platform also lost out badly, with unpaid bills amounting to £880,000, and investors have lost millions overall.
Hype and promises unfulfilled
KwikChex has seen the history and hype associated with the various connected businesses. Aside from celebrity endorsements, there are financial forecasts for VSTE that are extraordinary – projecting over £35 million revenues in the first year alone, with an extraordinary ‘sales profit’ of £30 million, rising to over £1 billion revenues and nearly £900 million profit by year 5. The document compared VSTE to the likes of Amazon and Google. There is no indication that any revenues were generated during the lifetime of the business, which spans a period from November 2012 to the appointment of a liquidator in December 2022.
Finance veteran Bob Wigley, the former Merrill Lynch banker and Chairman of UK Finance, was announced as VSTE Chairman in June 2019 – but apparently never actually took up his role.
The investor pitch document also uses the names of major companies and institutions, including banks, petroleum businesses, Premiership football clubs, airlines and the likes of Coca Cola and Pepsi, as well as various authorities, including the UK police as a part of its hype.
In addition, rugby club Sale Sharks became another loser. They announced a sponsorship deal in October 2020 with VSTE and another Davis company, Luna Venture Partners Limited, with VCode featuring on their shirts, but it was all left high and dry when VSTE failed to pay the promised sponsorship monies, and Sale Sharks were forced to urgently seek a replacement sponsor.
Another document for potential investors actually shows that the same technology promises were originally made by a predecessor company named myi-life, with the code technology being then called myi-code. This document lists dozens of global brands and organisations said to be in negotiations to take on the technology, but never traded and was dissolved in 2014.
With the collapse of VSTE, Davis switched to hyping his VSolidus cryptocurrency – this time using TV celebrity Jenny Powell as the host in a glamourous launch event. Some of the VSTE investors were offered compensation by assigning them VSolidus coins. But VSolidus has lost virtually all value and trading is just about non-existent. The company said to own Nova Wallet and VSolidus, Nova Coin Ltd., which was incorporated in March 2021 has never traded.
Where did the investors money go?
That’s a question the liquidator is working on at the moment, but a number of things are evident, including that many suppliers did not get paid, so the investment capital does not seem to have been used for the promised development. One troubling aspect is that KwikChex has seen documents, including payment instructions and bank statements which show that money for shares in VSTE were actually paid into a Louis-James Davis personal Coutts bank account.
Where do things stand today?
It doesn’t look like there is any prospect of investors or suppliers getting any money back out of VSTE, and there appears to be no substance in the cryptocurrency businesses at all. Louis-James Davis has resigned as a director from multiple connected businesses, but according to his Facebook profile, he is CEO of Nova Wallet and VCode and is attending events and meetings to extoll the virtues of this technology. He is apparently rolling out the projects in the Philippines and looking to expand in the Middle East. In February, he announced “We had a fantastic day at KPMG where we shared updates on the exciting projects that Nova Wallet, VCode and VSolidus are involved in across the UK, Canada, Africa, India, and the Philippines. As our group of companies operate in complex sectors, we discussed tax advice and the inbound investments we are expecting to support our projects.”
It’s difficult to align all this ongoing hype with the actual status of all his businesses and his resignations from his companies.
Lessons to be learned?
For private equity investors, cut through the hype of awards, valuations provided by the business and celebrity endorsements. Don’t put much faith in online reviews and news releases, both of which are easily manipulated. Verify purported commercial deals and ensure that the business is as commercially viable as it is presenting itself. Ensure that the capital raised by investment is being spent on genuine business development. Don’t wait until it’s too late to ask hard questions.
For celebrities and people of influence, do all due diligence on the business you are thinking about attaching your name to – you don’t want to have angry investors attacking your reputation.
KwikChex is an award-winning investigation and verification based business that provides checking services and assistance to those that have lost monies to misrepresentation and fraud. Initial evaluations are free of charge. We work closely with authorities, including law enforcement and consumer protection agencies and specialist lawyers.