Trader gets 7 years for 'utterly shameless confidence fraud'

Prison Window

On one trip to Las Vegas, the bar bill alone was $37,000.

Benjamin Wilson of Bournemouth, Dorset was sentenced to seven years at Southwark Crown Court today for defrauding investors of over £21m, following previous guilty pleas for fraud, forgery and operating a collective investment scheme without authorisation.

The sentence included seven years for fraud, 18 months for not being FCA authorised and two and four years for counts of forgery, with all the terms to run concurrently. This is the longest sentence for anyone prosecuted by the Financial Conduct Authority (FCA) and the second longest for either the FCA or its predecessor, the Financial Services Authority (FSA).

Sentencing Wilson, His Honour Judge Michael Grieve QC said:

'It was an utterly shameless confidence fraud'

'The purpose was to give (Wilson) a lifestyle of untold lavishness and luxury'.

'It was abuse of trust on a massive scale'.

Wilson pleaded guilty in December 2013 after it was found that the unauthorised investment firm he ran, SureInvestment, was a sham, costing investors millions which were used to fund Wilson’s extravagant lifestyle.

In total, over 300 investors trusted Wilson with £21.8m. When the scam was closed down by the FCA, £17.54m was owed to investors and it is estimated that £5.39m in total will be recovered.

Commenting on the case, Tracey McDermott, director of enforcement and financial crime, said: 'Wilson used his charm and the trappings of apparent success to lure investors. However, his firm was almost as fictitious as his claims to genius. It was little more than a charade acted out at the expense of those who trusted and believed in him. There was only one beneficiary of the scheme and that was Wilson himself.

'The FCA has objectives to protect consumers and enhance the integrity of the financial system. Wilson being put behind bars contributes to us achieving both'.

History of the case

SureInvestment was set up in 2003 when Wilson was 24 years old. Within a few months the regulator had informed him that he needed to be authorised to continue to trade or had to close down. Wilson later lied to the regulator, claiming he had wound up the firm and repaid his investors. To verify his account, the FSA contacted investors. However, Wilson persuaded them to tell the regulator that he had returned their money, when in reality he had encouraged them to invest in a separate ‘overseas’ fund.

Despite claiming to his investors that he had set up overseas, Wilson instead placed the money in his personal SureInvestment UK bank account. Only 20% of the total money that investors gave him between 2003 and 2010 was ever traded and when Wilson did trade, far from being some sort of ‘maestro’, he invariably lost money.

Wilson grossly exaggerated claims of both his trading abilities and of how much money and returns SureInvestment was making. In September 2005 he emailed an investor to say the fund was now worth $3.6 million and was up 146% that year. In fact SureInvestment had less than £100,000 at that point and in the previous year Wilson had lost 90% of investors’ money. As a result of his deception, SureInvestment continued to attract investors, with the money coming in used to pay those who wished to withdraw their funds, Ponzi-style. By April 2010 Wilson was falsely claiming that the SureInvestment scheme was valued at $160 million.

In October 2010, following information that suggested Wilson was still operating an investment scheme, the Financial Services Authority (FSA), which was the FCA’s predecessor, acted through the civil courts, obtaining an injunction to freeze assets and restrain the unauthorised activity, and pursuing civil action. When the scale of his dishonesty became clear, the FSA began a criminal investigation - Wilson was arrested and his house and offices were searched in a joint operation with Dorset Police. Wilson was also sentenced to 5 months imprisonment in April 2012 for repeated breaches of the FSA High Court injunction.

Lavish lifestyle

During the lifetime of the scheme, Wilson took £21.8m from investors. Of that, only £4.2m was ever traded, with Wilson losing £2.25m.

Wilson spent £6.3m funding an extravagant lifestyle, including a £4m house in the exclusive Sandbanks area of Poole, Dorset; £200,000 on racing and horses; £200,000 on cars, including a Ferrari California; £100,000 on shopping and hundreds of thousands more on leisure and holidays. On one trip to Las Vegas, the bar bill alone was $37,000.

Wilson also spent substantial amounts creating the impression that his firm was above board and successful. £4.8m was spent on an exclusive office in Poole, complete with massage room, bar, games area and life coach. It was also filled with ‘traders’ who were merely doing simulated computer trading. Many felt lucky to have a job and to be learning from a trader of purported genius like Wilson, so much so that many persuaded their family and friends to invest.

Wilson pleaded guilty on 12th December 2013 to three counts of dishonesty (two counts of Forgery and one of Fraud) thereby avoiding a trial which was due to begin on 7th April 2014. He had already pleaded guilty to a count of operating a collective investment scheme without being authorised by the FCA on 25th October 2013. As a result of these pleas, which the FCA felt fully represented Wilson’s criminality, it was decided it would not be in the public interest to proceed to a lengthy trial on the remaining counts.

Source - Financial Conduct Authority

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