Brazil’s Federal Prosecution Office files lawsuit against Ciaran Kelly’s firm Go Balance to cancel Trocano Araretama REDD project

And demands US$1.7 million payment to Indigenous Peoples and local communities.

Brazil’s Federal Prosecution Office (MPF) has a filed a lawsuit against a company called Go Balance and the municipality of Borba to cancel the Trocano Araretama REDD project. The company and the municipality signed the deal for this forest carbon project in 2020.

MPF argues in its lawsuit that Go Balance and the municipality did not respect the right of the Indigenous Peoples and local communities living in the project area to free, prior and informed consent.

The Trocano Araretama REDD project covers a total area of 1.3 million hectares. The project area overlaps with several state and federal conservation units, a national park managed by the Chico Mendes Institute for Biodiversity Conservation, and settlements of the National Institute of Colonisation and Agrarian Reform (INCRA).

MPF prepared a report about the project which found that more than 42% of the project is federal or state conservation areas, and another 42% in INCRA settlements. Almost 85% of the project area overlaps with public lands.

MPF is demanding that Go Balance should not validate or sell any carbon credits from the project. Go Balance should not hand over any revenue from the sale of carbon credits to the municipality of Borba. And the company should pay US$1.7 million to Indigenous Peoples and local communities affected by the project as “compensation for moral and material damages”.

MPF refers to Law No. 15,042 dated 11 December 2024, which states that ownership of carbon credits belongs to Indigenous and traditional communities living in the area.

The Trocano Araretama REDD project

The Trocano Araretama REDD project was developed by an Irish company called Celestial Green Ventures. The company was incorporated in November 2010 and the project started in June 2011.

By 2011, the company claimed to have “carbon rights” to 20 million hectares of Brazil’s rainforest. That would have made Celestial Green Ventures one of the biggest REDD companies in the world at the time. Which is pretty impressive for a company that had only existed for about one year.

REDD-Monitor wrote about Celestial Green Ventures in March 2012. One of the red flags was that Celestial Green Ventures had forward sold one million non-validated, non-certified carbon credits to a London-based scam company called Industry RE.

Industry RE used boiler room operations such as Emerald Knight to sell the worthless carbon credits as investments to retail investors in the UK. Industry RE also sold worthless “carbon benefit units” from the April Salome REDD project in Papua New Guinea. These were also forward sold non-validated, non-certified carbon credits.

In September 2013, the High Court in London appointed Begbies Traynor as liquidators of Industry RE. The company had scammed its victims out of £13.3 million from sales of non-existent carbon credits and other investment scams.

In 2016, the director of the company, Ian Hamilton, was disqualified from being a company director for 15 years. An investigation by the Insolvency Service found that,

Hamilton caused IRE [Industry RE] to operate with a want of commercial probity, systematically taking money from consumers on the basis of misleading statements made to consumers.

Other than being banned as a director, Hamilton has had no price to pay for his £13.3 million scam. He currently lives in Dubai.

Celestial Green Ventures

Ciaran Kelly was the director of Celestial Green Ventures. He is also director of Go Balance, the company that took over the Trocano Araretama REDD project in 2015.

In December 2012, Brazil's Attorney General Office took legal action against Celestial Green Ventures for failing to carry out a process of free, prior and informed consent with the Awo Xo Hwara Indigenous community in Rondonia before setting up a REDD project.

The Irish Times reported shortly afterwards that Celestial Green Ventures was “suspending agreements it has with indigenous tribes in the Amazon forest following legal moves by the Brazilian authorities”.

Despite this, the Trocano Araretama REDD project was validated in 2013 by a company called Natural Forest Standard. The Natural Forest Standard was developed in 2011 by Ecosystem Certification Organisation and Ecometrica.

When I wrote about the Natural Forest Standard in 2016, I noted that “Trocano Araretama REDD project is the only project to have been verified and validated under the Natural Forest Standard.”

That is still the case.

One of the directors of Ecosystem Certification Organisation is Victoria Kelly, a relative of Ciaran Kelly. She is also a director of Natural Forest Standard.

Carbon credits and investment scams

In an October 2012 interview, Ciaran Kelly promoted buying carbon credits as an investment:

“They are a good investment and have been for a long time, and investor confidence is ever-increasing, at the premium end of the market. REDD+ credits for example have shown price increase year on year.”

Far from being a “good investment”, carbon credits are a disaster for retail investors. Carbon credits are a wasting asset, not an investment.

In August 2011, the Financial Services Authority (since renamed as the Financial Conduct Authority) put out a warning about the risks of investing in carbon credits. “You may lose money on your investment by not being able to sell,” the FSA warned, “or at least get a competitive rate, when trading a small volume of carbon credits.”

Kelly’s 2012 interview was with a company called Grosvenor Park Intelligent Investments. One of the directors of Grosvenor Park Intelligent Investments was John Russell-Murphy. He was also a director of Go Balance. And he was director of a company called Natural Capital Wealth, which marketed carbon credits from the Trocano Araretama REDD project.

In November 2024, the High Court in London heard that Russell-Murphy had “dishonestly assisted” the directors of London Capital & Finance — a Ponzi scheme that raised £237 million from more than 11,600 people by issuing mini-bonds between 2013 and May 2018.

The lawyer for the claimants, Stephen Robins, described the fraud as the “largest Ponzi scheme in British history”.

Russell-Murphy, Paul Careless, and Robert Sedgwick were liable for £211 million the court heard. Paul Careless ran a company called Surge Financial that took a 25% commission from London Capital & Finance to market the mini-bonds.

Robert Sedgwick was a solicitor with Buss Murton Law in Tunbridge Wells. Buss Murton Law assisted London Capital & Finance, helping to give an air of legitimacy to the scam.

Sedgwick was also involved in helping Industry RE sell non-existent carbon credits from the April Salome REDD project in Papua New Guinea. The unfortunate people who bought the “carbon benefit units” paid the money into a bank account with NatWest named Buss Murton Law LLP Client Account.