Celebrities Lose Out In 'british Bernie Madoff Ponzi Fraud'

[LaoPo]

Celebrities lose out in 'British Bernie Madoff Ponzi fraud'

Celebrities, sports stars and high-profile businessmen are among the victims of an elaborate £80 million London "Ponzi" scheme that has wiped out the life savings of hundreds of Britons, police said.

By Matthew Moore

Published: 7:00AM BST 20 Jul 2009

The alleged fraud – similar to that concocted by US financier Bernie Madoff – was so convincing that many investors refused to believe they had been cheated even after being contacted by officers.

A household name 1960s pop star is one of the well-known figures known to have lost tens of thousands of pounds.

City of London Police said it is one of the biggest Ponzi frauds ever detected in Britain, and suspect at least 600 people around the world have lost huge sums.

More than 100 people who invested in Business Consulting International (BCI), the Knightsbridge-based company behind the alleged scam, have not yet been traced and may be unaware that their savings have vanished.

The fraudsters behind the conspiracy are said to have used their business connections to target wealthy names in the sports, music and finance industries, although people with modest incomes have also lost out.

Like Madoff, the conmen "befriended and groomed" their victims, many of whom recommend friends and family join the scheme.

Police have seized assets totalling £1 million, including two Ferraris, a Lamborghini, two Bentleys, a Rolls-Royce and a Maserati, plus jewellery and £250,000 in cash, but that amounts to a fraction of the £80 million invested. Police are trying to track down the missing money, some of which may have been diverted to acounts in Dubai, the Cayman Islands and Thailand.

According to police, BCI and connected companies offered returns of between six and 13 per cent a month, claiming that the tempting dividends were generated by lending money to struggling firms who were willing to pay high rates of interest.

In reality the monthly payouts were funded by the original investments. The con men used the rest of the capital to fund lavish purchases including a fleet of luxury cars, it is alleged.

The scheme began in 2007 but started to unravel late last year after promised payments failed to materialise. In May three investment consultants linked to BCI were arrested after the Financial Services Authority handed the case to City of London Police. But in angry exchanges many of those present accused the police of precipitating the company’s collapse and defended the men accused of stealing their savings.

Last week hundreds of defrauded investors were called to a series of meeting at the force's headquarters where officers broke the news of the scam. But in angry exchanges many of those present accused the police of precipitating the company's collapse and defended the men accused of stealing their savings.

"These victims have been totally hoodwinked," said Det Supt Bob Wishart of City of London Police's fraud squad.

"They think these people are friends and they have placed complete trust and have given over a lot of personal information and it is very difficult to break that link of trust."

Other potential victims have been urged to come forward, but are being warned that they stand little chance of getting much of their money back. The scheme was not licensed by the Financial Services Authority so investors are not entitled to Government compensation.

One of the people who lost their savings was a 48-year-old woman from the Welwyn Garden City in Hertfordshire, whose family invested £50,000 for the future care of her son, who has cerebral palsy.

"The worst thing is the abuse of trust. We invested the money in stages from March last year onwards. Because we got some back we then invested more," she said after the meeting.

"I have lost the whole of my son's financial security for the future. These people defrauded my son."

Two men from Virginia Water, Surrey and another from London, have been quested on suspicion of conspiracy to defraud, money laundering and fraud by misrepresentation and are on police bail.

The alleged Ponzi scheme is believed to be the largest of several "mini-Madoffs" that have been uncovered in Britain since the financial crisis. Last month Madoff was jailed for 150 years for orchestrating a £39.5bn fraud.

http://www.telegraph.co.uk/news/newstopics...onzi-fraud.html

LaoPo

[LaoPo]

Ponzi 'victims' reluctantly come forward

By Jessica Rose

Business reporter, BBC News

They may have lost hundreds of thousands of pounds, but police investigating what they believe is the UK's biggest Ponzi scheme say some alleged victims cannot face coming forward to report their loss.

A number have even turned back at the door of the police station, they say.

Officers have been holding sessions at the City of London Police HQ for investors thought to have lost money, to explain to them what they think has happened and also collect statements as part of the investigation.

“ There are still people who refuse to believe the money they invested has gone. Some even think that the police investigation is the reason for the investment fund's problems. ” Det Supt Bob Wishart

At the latest in the set of sessions at the force's headquarters, presentations were made by senior officers and representatives from the charity Victim Support before those attending were asked to make written statements about the money they had invested.

Officers estimate up to 200 have attended but believe there could be many more who could have been affected.

Livelihood at stake

A Hertfordshire businessman, who wishes to remain anonymous, told the BBC he invested a very large sum of money in the scheme which he had taken from his firm, in the hope he could plough the profits back into the company later.

WHAT IS A PONZI SCHEME

# The fraud was named after Italian immigrant Carlos (Charles) Ponzi who set up schemes in Boston and Florida in the 1920s

# Investors are offered high returns over a short period of time

# Some of that money pays returns to other investors

# The rest of the money is siphoned off by the fraudsters

# The fund collapses when people stop joining or too many existing members withdraw funds

He said: "I had three full-time staff and two part-time employees, so there was more than just my livelihood at stake - a number of people were threatened."

Police say the criminal investigation focuses on Knightsbridge-based finance firm Business Consulting International (BCI) and several companies linked to it.

Officers believe a gang of men ran an investment scheme between 2005-8 offering returns of 6-13% a month for up to four years.

Clients were told the money was loaned to distressed companies who needed short-term cash and were willing to pay for it.

Police believe they are unlikely to see their money again.

'Not greedy'

Investors who come to the sessions listen to a talk in which police explain the investigation and what has happened to the money.

Seated at rows of desks as if in an exam hall, the investors then fill in forms detailing the money they put into the scheme.

Det Supt Bob Wishart, head of operations at the force's economic crime directorate, says one individual lost more than £1m, but thinks there are others who do not yet realise what has happened.

He said: "There are still people who refuse to believe the money they invested has gone. Some even think that the police investigation is the reason for the investment fund's problems.

"Fraud is not a victimless crime - those affected weren't greedy people, they just wanted to invest their money."

Two men from Virginia Water, Surrey, aged 40 and 43, and a third man aged 38 from Knightsbridge, central London, have been arrested and remain on bail.

They have been questioned on suspicion of conspiracy to defraud, money laundering and fraud by misrepresentation.

Anyone who thinks they have been a victim can contact the City of London Police on 0207 601 6844 or Victim Support on 0207 4489898.

Story from BBC NEWS:

http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8165513.stm

LaoPo

[geriatrickid]

I have zero sympathy for these "victims". They made the decision to invest because the returns promised were significantly higher than conventional investments. If they were too lazy to check out the people or more likely too blinded by the lust for money, then too bad.

The warnings were sounded about ENRON long before it collapsed.

Complaints were filed with the SEC in the USA about Madoff.

Lost in the stories of the victims are the stories of the people that did their due diligence and avoided the scams.

The losses from these scams are always inflated. The fact is that if people were paid out from the scams then that amount has to be deducted from the actual investment.

Sorry, but these victims have to take responsibility for their own behaviour.

[TAWP]

Each one who defend them after the fact is begging to be scammed and can be the last to get any money back in an settlement or insurance payout, if any.

[Brigante7]

It's amazing how quickly people forget the old saying "If something appears to good to be true, it probably is"

That's what I love about being poor, I have fu_ck all to lose.

Brigante7.

[jalansanitwong]

I too have no sympathy for these 'wood ducks'. Most people in the world are happy with their small but safe investments. The greedy ones think they're smarter than everyone else and are privy to information that will yield huge profits. Garbage!! When the cards fall down they cry like babies to the media and expect the small but careful investor to bail them out. Anybody who would invest their money with some quack in a pinstripe suit in Wall st or London deserves whats coming.Shouldnt be too hard tracing the money here in Thailand. All you need do is look for a scum bag driving a new Ferrari down at Phuket and living in a 50 million baht home . You can smell the greed and arrogance on them.Every dog has its day!!! One of these guys will be lying on the beach with a couple of lasses and not a care in the world then suddenly a dark shadow will loom over him he will nervously lift up his raybans and its good night . A few days later there will be a story in the local papers. 50 year old farang from UK tragically topples over 15 th floor balcony. Police have no suspects and determine it a suicide. Over.

[losworld]

The money is most likely in Israel. A few years back Madoff moved some money to Israel where he set up a bank with a friend. He was refusing to pay U.S. taxes stating he would pay in Israel only.