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Adviser roles probed in SFO Ponzi cases

The Serious Fraud Office is investigating seven suspected frauds in financial services which may include Madoff-style Ponzi schemes and is looking at the role played by intermediaries.

An SFO spokesman says: “The role of intermediaries is always significant for us to look at, but that is not to say that they have necessarily behaved badly. We would look at financial advisers, people working for feeder funds and professional advisers and other intermediaries.”

A recent investigation by the SFO has seen a Lincolnshire IFA told by a judge that he will go to jail following the collapse of his company.

Alan Richardson, 58, who ran MFC Finance of Wellingore, admitted a series of fraudulent trading charges when he appeared before Lincoln Crown Court. Richardson had been expected to plead not guilty and go on trial next month.

Sentence was deferred but Judge Michael Heath said: “You will go to prison. The fact I am granting you bail does not mean you will not go to prison.”

A lengthy investigation by the Serious Fraud Office and the Lincolnshire police economic crime unit had discovered that in 2002 and 2003 MFC Finance had been trading while insolvent.

Richardson knew the company was insolvent but still persuaded investors to put more money into it, promising high rates of interest and a safe return of capital.

He took £400,000 out of the company to prop up another of his businesses which was failing, Watson’s Truck Services. As a result, when MFC Finance collapsed at the end of 2003, dozens of investors in the Lincolnshire area lost their life savings.

During initial hearings before Grantham magistrates, Richardson had been charged with false accounting, evasion of a liability and perverting the course of justice as well as fraudulent trading.

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