LONDON, England – Daniel Pugh has been sentenced to 7 years and 6 months in prison for running a £1.3m Ponzi scheme, following a prosecution brought by the Financial Conduct Authority (FCA).
Pugh, aged 35, set up a Ponzi scheme with another individual that netted over £1m. Run from his bedroom in Devon, the fraudulent Imperial Investment Fund (IIF) took money from 238 investors Pugh targeted largely through Facebook adverts. Investors were offered impossibly high returns of 1.4 percent a day, 7 percent a week or 350 percent a year.
Pugh received £96,000 from the scheme. He used the money to support his lifestyle, including designer clothes, restaurants and withdrawing £18,000 in cash.
The returns investors were promised did not materialise. Pugh duped investors into believing he was successfully trading and their money was safe. Even at the point he knew the scheme was collapsing, Pugh continued to try to attract more investors into the scheme.
Steve Smart, executive director of enforcement and market oversight at the FCA, said:
“Pugh made outlandish claims to hook in victims but in reality this was nothing more than a massive fraud. Fighting financial crime is a priority for the FCA. We will take action to ensure criminals face repercussions for their actions, including being denied access to any ill-gotten gains. People’s online personas are often at odds with reality, as was the case with Pugh. Claims that sound too good to be true, are usually just that. Check the FCA Firm Checker before you invest.”
In sentencing, Judge Weekes said there were “persistent and knowing breaches of the regulatory framework” by Pugh and that any remorse for his actions came ‘woefully late.’ He added: “The consequences for them [the victims] are marked and apart from financial loss they feel embarrassment.”
The FCA is pursuing confiscation proceedings to deprive Pugh of the proceeds of his crimes and compensate the victims. Pugh was disqualified from being a director of a company for eight years, effective upon release from custody. A further individual is wanted in relation to the same offences.
In the last six months alone, the FCA has secured criminal convictions in relation to 6 individuals for a range of financial crime offences, including money laundering, insider dealing, and fraud.
Unauthorised investment schemes pose a huge risk to consumers, and can offer little or no protection. Many will not realise their investments are at risk until it is too late.
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