Specialist prosecutors bring major investment scammers to justice
Specialist prosecutors from the Crown Prosecution Service have brought three major investment scammers to justice since the end of September.
Through its dedicated Specialist Fraud Division, the CPS is cracking down on these atrocious crimes which often result in a huge financial loss to victims who have invested their savings and pensions in good faith.
Fraudulent investment schemes are complex and designed to appear legitimate, meaning it can take time for investigators to follow the money trail and identify those responsible for the criminal conduct. However, that does not prevent the cases being fully investigated, charged and brought to court where our legal test is met, even during the current pandemic.
Head of the Specialist Fraud Division at the CPS, Andrew Penhale, said: “The harm caused by these fraudsters is immense - stripping individual victims of their savings, raiding pension pots and wrecking their futures.
“The Specialist Fraud Division is focused on tackling these crimes and continues to bring cases to a successful conclusion - securing justice for victims of investment fraud. Working with law enforcement partners, we also prioritise the recovery of criminal proceeds, to compensate victims wherever possible and to seek measures on conviction which may prevent future fraudulent activity.”
Further information on the work our Specialist Fraud Division has been doing to prosecute people for investment fraud schemes can be found in the case studies below
David Stevens, 67, carried out a five-year investment scam resulting in a loss of £1,200,000 to his victims. He was working as an Independent Financial Adviser, and approached people to have them to invest in his peer-to-peer lending scheme that would give investors a 12% return on their money.
When potential investors expressed caution, Stevens assured them he would personally guarantee £50,000 from his own money and that interest payments could be obtained monthly if they wanted. Over time, investors noticed payments were becoming irregular, much smaller in amount until eventually they weren’t receiving anything at all.
Stevens had paid investors’ money into different bank accounts, including his own, and could no longer sustain the fraud. Following an investigation by Essex Police Service on 14 October 2020 Stevens pleaded guilty to 16 offences and was sentenced on November 3 to five years and nine months' imprisonment.
Joseph Lewis, 65, ran a £20million Ponzi scheme fraud for a decade, taking millions from people who thought they were investing in foreign exchange trading. Clients of Joe Lewis Trading were sent monthly reports, which looked as though their investments were doing exceptionally well and encouraged investors to either invest more, or recommend the company to friends and family.
City of London police found the monthly reports were false, as investors’ money was paid into Lewis’ personal accounts. In 2013 when clients requested withdrawal of their money, they were met with delays and ultimately a failure to return the funds, except to investors who had threatened legal action. Having used his final client’s investment of £279,000, Lewis was forced to admit to his investors that the funds were gone.
On 4 September, Lewis admitted his responsibility for the £2.2million Ponzi scheme, pleading guilty to 19 fraud offences at Southwark Crown Court and on October 16 was sentenced to five years and four months in prison.
Freddy David from Elstree was convicted and sentenced at Southwark Crown Court on 30th July 2018 after he was found to have run a Ponzi scheme fraud between 19 December 2004 and 9 November 2017.
David was an authorised financial consultant and operated a parallel ponzi fraud using his company name and company bank accounts to make it appear legitimate. David would take investors’ money, which they paid into legitimate accounts, and use some of it to pay clients’ interest and the rest investing in a restaurant called ‘let’s meat’, lavish holidays, funding his online gambling habit and paying for his children to be privately educated.
David was convicted of Theft and Fraud and was sentenced to a total of six years in prison. On 28 July 2020, at Southwark Crown Court, David was issued with a confiscation order of £1,340,111.
On 30 September 2020 David paid £85,684.17 towards this confiscation order and has until the end of the month to pay the remainder, or he faces an eight-year default term being activated.
Notes to editors
- More information on the Specialist Fraud Division at the CPS