LONDON Feb 14 A British man who ran a ponzi-style investment scheme to defraud investors of over 21 million pounds ($34.94 million) was jailed for seven years on Friday, Britain's financial watchdog said.
Benjamin Wilson, from Bournemouth, southern England, pleaded guilty last year to dishonesty and operating a collective investment scheme without authorisation from the Financial Conduct Authority (FCA).
Sentencing Wilson in London, Judge Michael Grieve said he had committed an "utterly shameless confidence fraud" that was "an abuse of trust on a massive scale".
Wilson set up SureInvestment in 2003. When informed by the regulator, then the Financial Services Authority, a few months later that the firm needed authorisation to continue operating, Wilson lied, saying it had been wound up. He persuaded his investors to say the same.
Wilson "grossly exaggerated" the success of his trading abilities, telling one investor the fund was worth $3.6 million and up 146 percent that year, when in fact it held less than 100,000 pounds. He used money coming in from new investors to pay those who wished to withdraw their funds, according to an FCA statement.
The regulator was tipped off about SureInvestment in 2010 and opened a criminal investigation shortly afterwards.
The probe found that, during SureInvestment's lifetime, Wilson took 21.8 million pounds from investors, trading just 4.2 million pounds, of which he lost more than 2 million pounds.
He spent 6.3 million pounds on a luxury property, a Ferrari, horse racing and travel and created the image of a successful fund with a state-of-the-art office complete with massage room, the FCA said.
Tracey McDermott, director of enforcement and financial crime, said SureInvestment was little more than a charade acted out at the expense of those who trusted and believed in Wilson.
"There was only one beneficiary of the scheme and that was Wilson himself."