Fraudster jailed for ten years over £34m Ponzi scam
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Convicted fraudster Kevin Foster was today jailed for ten years for running an unauthorised investment business and stealing investors’ funds through his £34m KF Concept scheme.
Foster, 52, devised and ran a dishonest scheme that took in £34m from investors over a three-year period.
He was found guilty at Harrow Crown Court on 9 March 2010 and the loss to investors is accepted to be over £17m.
He has since been held in custody for sentencing today in relation to six counts under the Theft Act and eight counts under the Financial Services and Markets Act.
Foster promoted the scheme through road shows around the country, many of them in South Wales.
What could not be made public until now was that there was a first trial in which the first trial judge stayed the FSMA counts.
However, the Serious Fraud Office successfully appealed and a re-trial proceeded under a different judge.
Kevin Foster was charged in May 2007 following an investigation by the SFO with the assistance of Kent Police into the KF Concept and related schemes.
Kent Police had already been working with the FSA on an investigation launched by them.
The charges consisted of eight counts of theft under the Theft Act 1968 and eight offences under FSMA 2000, including five offences of dishonestly concealing material facts.
The case was sent to the Crown Court from Maidstone Magistrates’ Court and the defendant entered pleas of Not Guilty to all 16 offences on 17 October 2008 at Kingston Crown Court.
A first trial was heard before trial judge HHJ John Samuels QC at Kingston Crown Court between 16 March 2009 and 8 June 2009.
During the trial the court heard evidence and legal argument in relation to earlier investigations by the FSA and Kent Police as well as the subsequent SFO investigation. The trial judge ruled that the FSMA counts be stayed from proceeding which brought a halt to the trial and the judge discharged the jury.
The SFO successfully appealed this stay, with the Court of Appeal ruling that the trial judge’s conclusions amounted to an error of law.
The second trial was heard before HHJ Nic Madge at Harrow Crown Court from 18 January to 9 March 2010.
The jury found the defendant guilty of all of the FSMA offences and six of the Theft Act offences, including stealing almost £1.5 million of investors’ money to pay off personal
judgments and debts, and buy and improve properties for himself and his family.
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Readers' comments (8)
Another FSA Classic | 16 Apr 2010 4:34 pm
Well the FSA have done it again. How did they protect these investors? By using the idea of Treating Customer fairly.
I feel sorry for the investors but everyone in the FSA will still get paid and take home their bonuses.
So just how are they protecting the public?
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john higgins | 16 Apr 2010 4:53 pm
another financial advisor is jailed, this is becoming a daily headline. It amazes me that some advisor's have the cheek to say the claims industry is dishonest!!!!
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mick | 16 Apr 2010 4:54 pm
@4.34pm. yawn
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Incompetent Regulators Award Team | 16 Apr 2010 4:55 pm
As 1st post re FSA, nowhere to be seen again. But lets just pay them anyway as we need to prop up losers in life.
Why do we need the FSA when we have the police?
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Robert Donaldson | 16 Apr 2010 5:27 pm
I hate to defend the FSA but you cannot blame them for fraud and theft as you can't blame the policy for drug dealers dealing in our streets. Get real!.
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Les Whitfield | 16 Apr 2010 5:51 pm
Oh dear, how remiss of me Robert. I really thought that one of the duties of the police was to eliminate crime from our streets, so I have been holding them responsible for their failure.
In truth then, it appears they cannot be held accountable because they have so much to do keeping records that they can't put bobbies on the beat. Just like the FSA?
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Gerry Cooper | 16 Apr 2010 6:32 pm
As the headline says, this man was a fraudster, not a Financial Adviser, or an IFA.
It's all too easy for a crook and charlatan to set up as an 'adviser', and if no one checks to see if he's authorised, he'll get away with it, at least for long enough for a lot of money to be lost and the reputation of legitimate advisers to be damaged.
It's incumbent upon all of us, if we see or hear of something that doesn't sound right, or looks too good to be true, to investigate it's legitamacy and vigourously report any suspicions.
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Anonymous | 19 Apr 2010 9:08 am
Another one......!
However for all those people slating the FSA it is worth bearing in mind that they cannot watch everyone for every second of every day just as the police cannot prevent every crime from happening and these things are going to occur.
However once these things come to light the FSA must react to protect the customers and obtain as much redress as is possible.
The criminal side of things has been handled by the police and the CPS and the individuals guilt is beyond question as it is with any fraudster after a guilty verdict.
FSA can then use their extensive powers, FSMA 2000 and FSA 2010 to get as much money back to the victims as possible, whether its from him, his firm or his Principal.
It is here that the FSA fails catastrophically as all too often they simply wash their hands of the matter forcing the victims to resort to expensive legal action to get their money back.
This is quite simply the job of the FSA. It should not be up to the victims (who have lost substantial amounts of money already) to pay out more money do the FSA's job for them.
It is this lack of reaction to these events that is the FSA's failure and raises the question as to why we even have them. It is this that needs to change for the FSA's existence to be justified.
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