An independent financial adviser has been sentenced to five years and nine months behind bars for his role in a five-year investment scam which saw victims lose £1.2m ($1.56m, €1.33m).
David Stevens encouraged people to invest in his peer-to-peer lending scheme by saying it would give investors a 12% return on their money, the UK’s Crown Prosecution Service (CPS) said.
Following an investigation by Essex Police Service, on 14 October 2020, Stevens pleaded guilty to 16 offences and was sentenced on 3 November at Southwark Crown Court.
Scam details
Between 2010 and 2017; Stevens conned 16 of his clients out of their savings, through the Ponzi scheme he nicknamed “the club”, claiming their money was going into a collective investment fund.
He met most of his victims after providing them financial advice through his firm David Charles Financial Services.
Stevens said that he would personally guarantee £50,000 of his own money and that interest payments could be obtained monthly if they wanted.
Over time, investors noticed payments were becoming irregular, much smaller until eventually they were not receiving anything at all.
Stevens had paid investors’ money into different bank accounts, including his own, and could no longer sustain the fraud.
Funding own lifestyle
Prosecutor James Norman told Southwark Crown Court that the money was instead being used to fund Stevens’ lifestyle.
“He spent the money propping up businesses of his own and funding his own lifestyle – not least his substantial gambling habit.”
He added: “In addition, some of the money was used to make interest payments, or what appeared to be interest payments, to some of the victims, to prevent the fraud from being uncovered. That is, of course, the Ponzi method.
Judge Michael Hopmeier added: “Your victims were ordinary hard-working people or retired persons who put their trust in you, they were not sophisticated investors.
“Each victim has lost different sums and to different extents are feeling a mixture of anger, frustration, that they have been let down and that this is a breach of trust.
“It has also affected the lives of the victims who went on to introduce friends to the defendant and caused loss of friendships.”
CPS investigations
This case was one of three major investment investigations that the CPS had brought to justice.
Other cases include Joseph Lewis and Freddy David, both of whom have been jailed for their crimes.
Through its dedicated specialist fraud division, the CPS is cracking down on these crimes which often result in a huge financial loss to victims who have invested their savings and pensions in good faith.
Andrew Penhale, head of the specialist fraud division at the CPS, said: “The harm caused by these fraudsters is immense – stripping individual victims of their savings, raiding pension pots and wrecking their futures.
“The specialist fraud division is focused on tackling these crimes and continues to bring cases to a successful conclusion – securing justice for victims of investment fraud.
“Working with law enforcement partners, we also prioritise the recovery of criminal proceeds, to compensate victims wherever possible and to seek measures on conviction which may prevent future fraudulent activity.”
