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IFA jailed for 21 months for fraud

An IFA who used more than £90,000 of clients’ investments to pay off his own debts has been jailed for 21 months and banned from being a company director for five years.

Andrew Payne, an IFA living in Whissendine in Rutland, used money invested with him by clients to pay off personal and company debts, according to the Teeside Evening Gazette.

Payne pleaded guilty to two counts of fraud dating back to 2008. Defence barrister Jeremy Barnett said Payne was financially ruined and would not be able to find work.

He said: “He is bitterly sorry for the effects of his failure.”

Josef Thompson from Saltburn lost £87,187 of the £90,000 invested with Payne.

Prosecutor Richard Bennett said: “When the cheque was handed over Mr Thompson believed the money would be invested on his behalf in good faith. He expected to receive a series of payments on a monthly basis. In fact the £90,000 was not invested at all.”

Payne paid £12,500 into overdrafts of his two failing companies, £5000 into credit card debt and large amounts was put into his personal bank accounts and paid just £2,812 to Mr Thompson over five monthly payments.

Payne defrauded a second client by using a £5,000 investment for his own means. This client received £15,600 back from a total £55,000.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Richard Brydon 8th March 2011 at 4:33 pm

    I wonder if he’d passed RO1?

  2. Whilst on this subjects? Do regulations apply to former regulators?

    Could Sir Howard confirm that full money laundering investigations were conducted prior to the acceptance of £300K from Gaddaifi, a man who employed his network of diplomats and recruits to assassinate dozens of his critics around the world. Amnesty International listed at least 25 assassinations between 1980 and 1987’s. Sir Howard Davies has told the BBC that his decision to accept £300,000 for research from a foundation run by Col Gaddafi’s son Saif had “backfired”.

    Backfired perhaps because it was discovered and perhaps because Gaddaifi, is seen by many as a murderer not only of his own people but also of the 243 passengers, 16 crew members over Lockerbie and for the shooting of WPC Yvonne Joyce!

    Q: Are criminal dictators exempt from money laundering requirements?

    Q: Has there been a breach of money laundering regulations here?

    Q: Would an IFA placed in the same position now be facing criminal prosecution and a possible 14 years in prison?

    Ignorance of the law is no excuse especially when you consider Sir Howard Davies was former executive chairman of the Financial Services Authority from 1997-2003 and helped impose these same requirements on the independent adviser community.

    As an IFA I fully accept the need for money laundering investigations but ask why these same rules do not apply when the former chairman of the FSA accepts £300K from a criminal dictator with no apparent concerns about the criminal source of these funds!

  3. Has this become so common-place that no-one comments on it any more!!

    Who was this guy an AR of. His Principal carries direct liability under section 39 of FSMA and also indirect liability under section 150 of FSMA because they failed to supervise him or assess him as fit and proper.

    They need to reimburse the victims and if they dont the FSA MUST I repeat MUST take action.

    Unfortunately I suspect that some of the victims will get soem money back from the FSCS (up goes the levy again) and the FSA will take no action and in effect cover up this appalling crime.

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