A company director has been jailed for eight years and one month for being responsible and playing a key role in a nearly £9m investment fraud, which saw the deceptive gaining of money from members of the public.

Declan Nowell, 32, was sentenced at Hull Crown Court today after pleading guilty to two counts of fraud and one count of operating an unauthorised, unregulated investment scheme at previous hearings.

The Crown Prosecution Service (CPS) and the Humberside Police investigation proved that Nowell was the director of a company called ‘Investing4you Ltd’, which claimed it traded on the foreign exchange (Forex) markets and recruited hundreds of investors where the majority came from Scunthorpe and North Lincolnshire.

Nowell told investors once the company received money from them then he would set up an individual transfer across to Forex where the monies could be traded and each client would hold separate accounts.

Nowell was not registered with the Financial Conduct Authority (FCA), nor was ‘Investing4you Ltd’, meaning that he was not authorised to operate and accept or make investments on behalf of others. This meant that clients were not covered by the Financial Services Compensation scheme which exposed them to a greater risk of financial loss.

The CPS and the police were able to show that ‘Investing4you’ was operating like a ‘Ponzi-style’ investment scam in that there were promises of high returns with little or no risk, but instead it paid early investors with money collected from new investors, rather than actual profits from a legitimate business. Only a small fraction of investor funds ever reached genuine trading platforms. Nowell misrepresented account balances, showing huge daily “profits” that did not reflect real trading. He diverted large sums for personal spending, including a house, luxury cars, jewellery, and designer clothing.

The prosecution financial analysis showed that:
•    £8,977,529.32 received from investors
•    £968,113 actually paid onto trading platforms
•    £1,067,246.91 spent personally
•    £70,697 transferred to his partner
•    £7.3m repaid to investors (using money from other investors, not trading profits)
•    Overall, Nowell made an approximate £300,000 net trading loss, contradicting his claims of strong daily profitability.

Vivienne Hartley, Specialist Prosecutor for the Crown Prosecution Service said:

“Declan Nowell was operating a callous scam targeting the public.  Many people lost their hard earned money because of Nowell’s greed, fake investment schemes and false promises.

“We would like to thank the investigative work of Humberside Police to help us prosecute this case and deliver justice for the victims.

“The CPS will immediately start confiscation proceedings to claw back monies and assets gained during these crimes.”

Detective Constable Paul Twidale from Humberside Police’s Economic Crime Unit said: 

“This has been an extensive and highly complex investigation spanning over the past four years.

“Over this time, we have worked diligently to meticulously build a case that has ultimately compelled Nowell to admit his guilt.

“Nowell orchestrated a fraudulent operation known as a ‘Ponzi scheme’ where he used funds from new investors, mainly members of the public, to pay back existing customers. This created the false illusion of financial success whilst, in reality, he was diverting over £1 million to fund his extravagant lifestyle including purchase of a McLaren, new house and designer clothing.”

The CPS prosecutes various types of fraud including investment fraud.

Investment fraud occurs when criminals deceive victims into investing money based on false information. Often, as in this case, there is little or no real investment opportunity and the whole enterprise is fraudulent.

Whatever the type of investment fraud, the CPS will work to deliver justice for victims where the evidence and public interest support a prosecution.

How to report Fraud
If you believe you have been a victim of fraud, you should report it to the police by calling 0300 123 2040.  Alternatively, you can report fraud through the national Report Fraud website www.reportfraud.police.uk