Police recover £3m after wealth manager boss’ Ponzi-scheme

Source: Money Marketing Daniela Esnerova 2020-08-12

City of London Police has recovered £3m of funds from a wealth management boss who was found guilty of running a Ponzi-scheme two years ago.

Hertfordshire-based Freddy David is currently serving four and six-year jail sentences concurrently for two counts of fraud and deception, after defrauding 55 people of £14.5m.

David was convicted in July 2018 after the court heard that David ran a Ponzi scheme between January 2005 and November 2017 while he was managing director of wealth management firm HBFS Financial Services.

The police said that David ran the Ponzi scheme in parallel with a legitimate HBFS business, using the company’s name to defraud victims out of vast sums of money.

The case was referred to the police by the FCA after the regulator became suspicious of HBFS’ bank accounts.

Wealth management boss jailed over £14.5m Ponzi fraud

David convinced investors, some of whom he knew personally, that their monies were being held in a high interest bank account that was offering between four and eight percent interest annually, according to the police.

The investors were told that they would receive interest each month but that their money was locked in for various time period of between three months and five years.

The investments made by victims varied between £20,000 and £750,000 per person.

The investigation found that large sums of money were transferred into David’s personal bank accounts for his own use as well as being used to pay other investors their “monthly interest”.

The police’s review of the accounts showed that once David received the funds, he used the monies “to fund his gambling habit”, as well as for paying his children’s school fees and holidays abroad.

The police found that between January 2005 and November 2017, David spent £15.6m on gambling websites, including £240,000 in one day alone.

Last month, David was ordered to return £1.3m by Southwark Crown Court or face more jail time.

Fraudulent adviser’s firm declared in default

In an update published yesterday, City Police of London said: “In fraud cases, the work doesn’t stop when the criminal goes to jail.

“In the case of Freddy David, we have worked hard to legally recover funds to repatriate his victims.

“Two years on from his sentencing, we’re pleased to have recovered £3m.”

Hertfordshire-based HBFS Financial Services Limited was declared in default in January 2019.

Freddy David

investment

bank

Ponzi scheme

FCA

Police recover £3m after wealth manager boss’ Ponzi-scheme

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