- I made an unbelievably bad decision. I was in too deep and was making too much money and deluded myself into believing that somehow it would all “work out.” Of course, it did not.
- Mr. Haddow – a self-described certified public accountant and qualified in stockbroking and fund management, who owned and managed Bar Works; who decided everything and who was far older and wiser than me.
- Mr. Haddow was likewise sufficiently adroit to fool (among investors and others alike) The Real Deal into awarding Bar Works its prize for “the most creative real estate funding model of 2016.” Putzier, Konrad; Stocks, Bonds, and … Desks? The Real Deal, January 3, 2017.
- Moreover, United Property Group (“UPG”) and its massive in-house and agency network brought in by Mr. Haddow’s partner, James Moore, was selling Bar Works’ investment as of September 2015.
- Mr. Haddow agreed with Mr. Moore that UPG was to be used to raise money for Bar Works by shifting its in-house and agent network that were collectively selling projects at the rate of $2 million per month, over to Bar Works.
- As of June 2016, when I inherited the UPG accounts as a result of Mr. Moore leaving Bar Works, all of the work had already been done by UPG in order to bring the investors’ money in. The UPG investor network literally fell into my lap. There was nothing for me to do other than simply sit back and keep track of the commissions.
- I did not devise nor hatch the Bar Works scheme. I was not even in the United States when Mr. Haddow incorporated Bar Works and bought all 20 million shares of Bar Works shares for $2,000 in July 2015 and had already prepared the private placement memorandum as of August 2015.
- I was an agent (called a “Master Agent”) for Bar Works and sold investments in Bar Works through my agency network. I was neither a partner in Bar Works nor an employee.
- The Bar Works scheme was thought up, orchestrated and hatched by Mr. Haddow well before I had anything to do with Bar Works (let alone was even in this country).
- There is no denying that what I did was egregious. Once I realized that Jonathan Black was in fact Mr. Haddow, I played along and continued to pitch “Jonathan Black” as I had my agency network sell the Bar Works investments and reap the benefits of the commissions generated there – and in particular – from those former UPG/Moore investors.
- There is no excuse for my decision to abandon my conscience, morals and values on the side of the road and to actively assist in advancing the lie of Jonathan Black to investors, costing investors tens of millions of dollars.
- Why did I do it? The promise of fortune, future benefits and future opportunities.
- I believed – as did The Real Deal, that Bar Works was going to be a darling of Wall Street; that marrying the concept of WeWork to Starbucks to Fitness First was too good not to succeed.
- I saw the brick. I saw the mortar. I saw the packed Starbucks’ and the number of gym members who used a single piece of gym equipment every hour. I saw the future of co-working spaces and was sure that with Bar Works’ success, nobody would care once Mr. Haddow emerged from behind the curtain, and that Mr. Haddow would have no reason to run off.
- Mr. Haddow had James Moore as his business partner in Bar Works and agreed with Mr. Moore that UPG was to be used to raise money for Bar Works by shifting its in-house and agent network who were selling projects at the rate of $2 million per month over to Bar Works.
- Mr. Haddow negotiated with Mr. Moore for Mr. Moore and UPG to be paid 65% of the investors’ funds raised.
- Mr. Haddow was responsible, together with Mr. Moore, for “making it all look good for agents” and had UPG selling Bar Works’ investment as of September 2015
- I did profit handsomely from the sales made by my network of agents. And I made those profits after I learned that Jonathan Black was a figment of Mr. Haddow’s imagination.
- But I was neither a partner, nor principal nor even an employee of Bar Works, and the proof equally shows that I joined the conspiracy long after it had been devised and implemented.
- And that same proof establishes that my profits were a fraction of the total losses the investors suffered and which Mr. Haddow enjoyed as his own gains.
- There is no question that the nature and characteristics of my offense conduct is inexcusably bad.
When I travelled to the U.S., I was fueled by a hunger to become hugely successful, with a sense of urgency like as if time was running out for me. I felt a desperate need to make money, so I was looking anywhere I could for a good business opportunity, which I could really embed myself into and do everything I could to become a success.
I come from a recruiting and headhunting background. I started my own recruitment business in 2010, Core Agents and after a few years in the business, I realized that to make the amount of money I dreamed of, I needed simple and easy hiring contracts with volume. I realized that sales staff had a high turnover rate. I’d never looked at that area of recruitment before. Successful businesses that require sales staff, typically need a lot of them because the number of people selling determines the success of the company. If I could offer lower-than-average fees, I could take on the volume. This was the turning point in my life and my career.
I worked with investment companies which specialized in gold and diamonds, rare earth metals, listed bonds, real estate, and that sort of thing. Now, these investment firms were very different from the construction and property, or entry-level roles I was placing for the government. They still wanted to pay low fees, but had serious staff turnover. They typically had very large telesales floors with sometimes, over 100+ brokers on the phones.
Fortunately for me, London was, and still is packed, with investment houses. Since these firms took on almost 5-10 new hires every month, I was able to make good money. After some time, competition started picking up so I did something radical that no other competitor would think of doing. I offered to supply the staff for free. The job was essentially picking up a job description from the employer and marketing it out to candidates. I would parse through the applicants and send a hotlist over to the employer, who would then select who they wanted to interview and subsequently hire. The difference was, I became completely performance-driven, which required a commission split on any deals my placements did. My company, Core Agents, employed all the staff, and we placed them into the firms. They paid us the earnings for each staff member, and I distributed those commissions and base salaries to the staff. This way, I couldn’t get squeezed out of my cut on deals. For them, it meant I had a huge incentive to ensure these firms received the absolute best hires. It was a win-win situation. It worked so well, in fact, that I ascended from a recruitment consultancy to something I still don’t know how to define today.
Leaving Behind the UK And Headed For NY
I had a good business, a solid strategy and a growing distribution network but I always dreamed of moving to the U.S. as much of my family had already moved there. In the summer of 2015 I decided to take my first step in that direction. I talked to all my UK contacts in hopes of finding businesses to work with in the U.S. One of the people I knew presented an opportunity with Renwick Haddow, a British man who was based in New York and was the owner of Incrowd Equity at the time.
It seemed at the time that Mr. Haddow had thought of a fantastic business and was looking for middlemen to promote his idea for a real estate-based office space investment.
I had always recruited staff and matched businesses together which sold other companies’ products and fortunately for me, they had only been legitimate and successful products. I had become quite successful in that space while never having to do any real due diligence on the companies I worked with as I figured if they are operational and actively selling through a multitude of other experienced sales firms, they must be good – or at the very least, they must be compliant with rules and regulations. Unfortunately, I would learn this was not the case this time around working with Bar Works.
The Job Itself
The premise for the job was pretty much the same thing I did in recruitment. it’s also the same way I would engage an influencer, introducer, sales agent, distribution partner for any product or service today. I took the offer or job description, which in this case was essentially Bar Works’ private placement memorandum (PPM) and I marketed that PPM out to relevant businesses and sales agents. Whomever applied or showed interest would be awarded a Bar Works Agency agreement contract. And like my performance driven recruitment strategy, I would not charge an upfront fee. I instead took a percentage of the value of the available commission that was awarded to them – which was usually between 5-10% to me, and 20-25% to them. In other words, I did not interact with actual investors, unless an agent decided to invest, or if the investors circumvented an agent after getting involved.
I started distributing Bar Works office space investments to real estate agent resellers around the world. As I understood and believed, they did their due diligence, and were happy with what they saw, so I was too. The agents sold millions of dollars of the Bar Works investment to their clients, who as I understood it were also sophisticated and therefore did their own checks and were apparently happy with it as well.
What Made Bar Works So Attractive
Bar Works was a coworking business, which offered office space that allows people to work independently or collaboratively in shared office space. The business model works much the same way fitness clubs work – you pay a membership and have access. You have options for your own space, storage for valuables, and perhaps even an enclosed office. But the concept works more like buying a gym membership than a typical lease structure.
Typical coworking customers are self-employed, remote workers, small businesses, startups, and freelancers. These environments promote inclusiveness, collaboration, and community. Even larger companies use these office spaces when they are expanding quickly and need suitable office space or to house temporary staff.
Some coworking locations are industry-specific and provide equipment, services, and amenities that are very expensive with standard office lease options. My research, before selling Bar Works, showed me that there were plenty of other co-working companies starting up. Some focused on architect clientele and provided large open worktops to cater to them. I also saw some that focused on technology, providing everything “tech” under one roof, for startups, small businesses, and freelancers in that field. Plus, the designers made these spaces look as inviting as possible, and steered clear of those “grays and blues” synonymous with the corporate atmosphere.
Bar Works provided all those benefits, but with a twist. It married the concept of one of the largest companies in the coworking space, WeWork, with Starbucks – arguably one of the most coveted places to finish off a thesis or hold a meeting on-the-go. I believed the concept itself was great.
Bar Works converted street-facing restaurants and bars into these office space locations. They had a trendy feel, with exposed brick. Instead of going in and sitting around wobbly coffee tables, Bar Works had conference rooms, private offices, comfortable lounge areas, coffee bars and even mindfulness and yoga spaces. Everything catered to getting people to work and collaborate. It was a new business that found a niche and could ride the new trend of what people wanted for office space. Investors absolutely loved the idea, as did I.
Retrofitting a coffee shop or restaurant to a coworking place could be done very quickly so it could scale up fast. You hire a decorator, swap the tables out for sturdier worktops, add comfortable chairs, install super-fast WiFi with printing facilities, and throw in good coffee and some flair. That took no longer than two to three months so that you could be in business in no time.
All their locations were street-facing in heavy trafficked areas in Manhattan and other inner-city areas. Memberships, as far as I could see, were selling like hotcakes.
Working with Bar Works
I put together a list of firms who could be interested in selling this type of investment. I contacted them and presented the investment offered by Bar Works, which was the capital used to build out each location, and soon enough, they started selling.
During the first month at Bar Works, Mr. Haddow introduced me to Jim Moore and a few other key senior management partners who were with United Property Group (UPG). UPG as I understood it, was partnering with Bar Works to help grow the company out across the US and Europe. In other words, UPG was responsible for sales. They were all very well-spoken white males, aged between 40 – 55+ years of age. I believed them to be serious businesspeople from what they were saying about their involvement with UK politics and Football (soccer) teams.
While I didn’t know those other senior managers (nor do I remember their names), I did know of Mr. Moore prior to meeting him. I believed him to be a very successful and very well-known real estate property tycoon in the UK. He used to own InsideTrack, which was a very large real estate property seminar business. They used to hold seminars almost every week in almost every town across the UK. I know this because I would go to the local Hilton Hotel in Croydon, South London with my dad and uncles to hear presentations about real estate opportunities around the UK and Europe.
I was also told of another person at this time – that Jonathan Black would be the CEO. However, I soon realized that Jonathan Black was a made-up name, about a month into working with Bar Works. I asked Mr. Haddow and Mr. Moore about it, but they brushed off any concerns I had, saying that it was “just a name and people are buying the real property and the real business.” It was explained to me that Mr. Haddow’s name had been tarnished somewhat from a previous business failure which had an ongoing civil suit in the UK, so they wanted to avoid using his name. Weirdly, at the time this was acceptable to me — probably because they both seemed so calm and nonchalant about it. I essentially adopted the same attitude. That was wrong and inexcusable.
Mr. Moore and Mr. Haddow said the use of Jonathan Black was only temporary, and that Sean Phillips, who was the previous Managing Director of Fitness First, would be taking the helm as CEO. It was explained to me that Sean Phillips started with Fitness First when they were a single health club, and helped them grow to become one of the most successful clubs in the world at that time. I was told that at Fitness First’s peak, they were opening a new club every 4 days. Mr. Phillips seemed perfect for the job and on top of that, I understood that Mr. Moore was to be the face of Bar Works for all international business shortly, too. So, I justified my decision to keep the Jonathan Black truth from the outside world on the fact that “he” would be out of the picture soon enough. Once again – a terrible choice.
Plus, all of the agents that were distributing the Bar Works investment were also very prominent companies, well known in their countries and markets. They were established since dates going back decades, as reputable financial investment firms, with heavily showcased positive track records with investment or asset management. And, they had a lot of staff. They would carry out, as far as I knew, quite thorough due diligence checks and a lot of them even had legal counsel on staff who would provide a “Legal Opinion” to their investors. These companies were not mere network marketers, resellers, or introducers, or influencers simply acting as external sales agents sign posting or promoting a product. They were a lot more involved and put together large expensive marketing campaigns and dedicated a lot of their internal resources to selling Bar Works – their partnership was more like Joint Venture partnerships and full blown brand ambassadors to Bar Works. I closed my eyes and hoped for the best. No excuses. I should not have acted in this way.
Moreover, when Mr. Moore left Bar Works (along with UPG), I essentially inherited all of his agents and their “clients.” In other words, a good 80% of the investors’ funds which came in through my agency network were, in reality, potential investors brought in by Mr. Moore/UPG. These investors had already gotten the private placement memorandum and any other information from Mr. Moore/UPG. All I had to do was confirm that the funds came in.
In this context, the truth is, once Mr. Moore/UPG or me/my agents had introduced one of these investment firms to Bar Works, they were pretty much sold on the idea immediately. After I signed one of them as an agent, I hardly ever spoke to them after that – apart from exchanging pleasantries here and there. These businesses were entirely self-sufficient and they would work with Bar Works administration regarding their deal flow. As I said earlier, at that point all I would do was keep track of the deal flow so I could calculate my own commissions.
I was also able to rationalize my complicity in covering up Mr. Haddow as “Jonathan Black” because Mr. Haddow’s real name was on all the titles, leases, permits, food and beverage licenses and various other documentation – all of which was all attainable with simple searches. Agents and investors alike regularly spotted Mr. Haddow’s name when they did their due diligence. It did not seem as if anyone really cared. Around the office, Mr. Haddow was known plainly as “Ren” or “Renwick” to all vendors, staff and customers. So, I swept my concerns under the rug. I know that makes me complicit.
I knew then just as I know now that concealing Mr. Haddow behind the made-up name “Jonathan Black was wrong. A potential investor had the right to know if a fake person was running the company to hide the true owner’s identity. The potential investor had the right to decide for him or herself if having Renwick Haddow owning and operating Bar Works was an issue. I deprived the investor of that right. Who was I to make that decision?
When I first learned that Mr. Haddow was using a fake name, I chose to stay because of what I understood to be the master plan for the company was. I believed then that Bar Works would be a monumental success; the next unicorn, and would grow to become known all around the world like WeWork, Regus or Starbucks. I rationalized in my mind that there would be a great outcome because it appeared that there were so many highly experienced people and businesses involved and that their collective experience outweighed that one bad thing – which was in my eyes (as best as I could rationalize it) was just one man temporarily using a different name at the time.
I truly believed when I got to Bar Works that this was the opportunity of a lifetime, and I put absolutely everything I had into it. I used all the skills that I had developed in the UK because I saw a real career opportunity – so much so, that truth be told, I was trying to negotiate for equity stake throughout my time promoting Bar Works (I never got any).
The End of Bar Works
After a period of time however, something went wrong. Mr. Haddow decided to stop building locations even though investor money kept flowing in. I realized Mr. Haddow was paying the returns as a promise, like interest on a loan from whatever money was on account. I did not immediately understand that Bar Works was a Ponzi scheme then. I understand that now. And I thought it was only something he was doing while sites were opening up – at which time revenues would take over for paying out investor distributions.
The real red flag for me was when I realized that none of the new locations being sold to investors were actually opening. That’s when I started realizing things were about to take a turn for the worse. But I was in too deep. So, I chose to ride it out, and again hope things would turn. Of course, they did – but for the worse.
I also discovered after my indictment, as a result of Mr. Moore’s trial, that Mr. Moore was getting an additional 30% of all sales while he was involved with Bar Works – which was about 7 of the 11 months I was involved. That means, if distributing agents were being paid 20-25% and I was earning my override commission of 5-10% on those deals and Mr. Moore was earning an additional 30% on everything – all that was left in the business was 40% to cover Mr. Haddow’s compensation, the operations, the buildouts and furnishing investor returns. I never knew this, and it certainly would have caused me to pass on the opportunity.
For what it is worth – I never ran or hid. Bar Works imploded. Law enforcement was on the scene. My personal life fell apart and my wife and I were having serious marital problems as a result of my Bar Works troubles. We were living apart and were in the process of getting a divorce while going through couples therapy at the time. I never considered taking the easy way out and returning back home to London.
I recognize the reality of my situation. I closed my eyes to the fraud because I was more concerned about building up my distribution network and making as much money as I could. Looking back, I know that there is no excusing Mr. Haddow hiding behind “Jonathan Black” with the fact that the other owner, Mr. Moore was using his real name; or that most of the agents knew that Mr. Haddow was really Jonathan Black – or that initially as sites were being built out, new members kept floating in. The business looked great … until it didn’t.
I did initially look at Renwick Haddow and Jim Moore as older, respected, very successful businessmen in the UK, from whom I could learn a lot. I felt that they had given me – a then twenty-nine year old aspiring entrepreneur – the opportunity of a lifetime. I was young, hungry and trying to build a new life with my new wife in a new country with what I thought was a viable business option – and yes, the only business option I had at the time. Of course, perpetuating the fraud that was Jonathan Black / Renwick Haddow had the final act that unfortunately, it was destined to – the man who needed to conceal his true identity because of his past, kept true to his past. I allowed history to repeat itself when all I had to do was walk away or instruct my sales network to disclose to a potential investor that Jonathan Black was really Renwick Haddow. Do you still want to invest?
I have brought so much pain and suffering – to the investors, their families and to my own family. And for that, I am truly sorry.