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Wealth management boss jailed over £14.5m Ponzi fraud

Jail bankerA former boss of a wealth management firm has been sentenced to six years in jail for defrauding 55 people out of £14.5m in a Ponzi scheme.

Freddy David, former managing director of Hertfordshire firm HBFS Financial Services, pleaded guilty to obtaining a money transfer by deception and fraud by abuse of position at Southwark Crown Court.

A City of London Police investigation found that between 2005 and 2017 David was running the Ponzi scheme through HBFS.

The FCA referred the case to the police after it became suspicious of HBFS’s accounts.

David was running the fraud in parallel with legitimate HBFS business. The investments made varied between £20,000 and £750,000 per person.

According to the police, David would convince the investors, some of whom he knew personally as friends, their funds were being held in a high-interest bank account offering between four and eight per cent annual interest.

The investigation revealed money was being transferred into David’s personal account for his own use as well as being used to pay investors “monthly interest”.

David used the money for gambling, holidays and his children’s school fees.

Between January 2005 and November 2017, David spent £15.6m on gambling websites and £240,000 in one day alone.

Police staff investigator Katie Watkins says: “David was a well-respected member of his community who exploited this in his position as a managing director of a recommended financial advisory firm to gain trust from unsuspecting investors.”

“This fraud has caused significant emotional distress and financial harm to the victims involved, many of whom invested their life savings in HBFS. Some victims are retired and are not in a position to recover the money lost.”

FCA enforcement and market oversight executive director Mark Steward adds: “Freddy David abused the position of trust he had as managing director at a regulated firm to run this appalling fraud.”

He says: “The FCA has been working closely with the City of London Police throughout and will now be carrying out its own enforcement action against David on the back of the criminal conviction to prevent him working in financial services again.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Ah yes. Wealth mismanagement – his and his clients. Fancy title for an IFA, but not unusual today. Wealth manager, Planner, Investment Coach anything but the real description – IFA. Don’t tell me that is because the term IFA is in disrepute. It would seem that plenty of wealth managers and planners are also not exactly on the straight and narrow.

  2. So for 12 years he successfully outfoxed the FCA and no one suspected a thing? Wow!

  3. I would like to know what qualifications he had. Just out of interest, if anybody knows.

  4. 6 years? So he will be out in 3. If he were in the US he would have got 60 years.
    I wonder if he still has assets. If there was any justice he wouldn’t even be left with a pair of trousers. His family – tough, they lived the high life while he was stealing.
    There needs to be some really effective and severe sanctions for this sort of thing. Not just a slap on the wrist and a 36 month stay in a holiday camp (open prison).

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