A company director has been jailed for eight years and one month for being responsible and playing a key role in a Ponzi-style £9m investment fraud.
Declan Nowell, 32, was sentenced at Hull Crown Court on Friday after pleading guilty to two counts of fraud and one count of operating an unauthorised, unregulated investment scheme.
He had been behind a Ponzi-style scheme that attracted investors with promised high returns but pocketed the proceeds for himself.
The Crown Prosecution Service (CPS) and the Humberside Police investigation proved that Mr Nowell was the director of a company called ‘Investing4you Ltd’, which claimed it traded on the foreign exchange (Forex) markets and recruited hundreds of investors where the majority came from Scunthorpe and North Lincolnshire.
Nowell told investors once the company received money from them then he would set up an individual transfer across to Forex where the money could be traded and each client would hold separate accounts.
Mr Nowell was not registered with the FCA, nor was ‘Investing4you Ltd’, which meant he was not authorised to operate and accept or make investments on behalf of others. Clients were not covered by the Financial Services Compensation Scheme which exposed them to a greater risk of financial loss.
The CPS and the police said ‘Investing4you’ operated like a Ponzi-style investment scam. There were promises of high returns with little or no risk, but it actually paid early investors with money collected from new investors.
They said Mr Nowell misrepresented account balances, showing huge daily “profits” that did not reflect real trading. He diverted large sums for personal spending, including a house, luxury cars, jewellery, and designer clothing.
The prosecution financial analysis showed that:
• £8,977,529.32 was received from investors
• £968,113 was actually paid onto trading platforms
• £1,067,246.91 was spent personally
• £70,697 was transferred to his partner
• £7.3m was repaid to investors (using money from other investors, not trading profits)
• Overall, Nowell made an approximate £300,000 net trading loss, contradicting his claims of strong daily profitability.
Vivienne Hartley, specialist prosecutor for the Crown Prosecution Service said: “Declan Nowell was operating a callous scam targeting the public. Many people lost their hard-earned money because of Nowell’s greed, fake investment schemes and false promises.
“We would like to thank the investigative work of Humberside Police to help us prosecute this case and deliver justice for the victims.
“The CPS will immediately start confiscation proceedings to claw back monies and assets gained during these crimes.”