BBC Home > BBC News > Business

Reality lessons for Ponzi victims

20 July 09 11:41 GMT

Police have held a series of sessions for victims of a multi-million pound Ponzi scheme to explain their losses.

More than 700 people were caught out by the high-yield investment fraud, with losses estimated at £80m.

But investigators have been struggling to win the support of victims who refuse to believe their life savings are gone.

They held a series of meetings to explain the inquiry to victims and now want more to come forward.

"There are a number of people out there who have not told family and friends that they have lost a lot of money," said Det Supt Bob Wishart, of City of London Police's fraud squad.

Criminal case

Police say the criminal investigation focuses on Knightsbridge-based finance firm Business Consulting International (BCI) and several companies linked to it.

Police believe a gang of men ran a fraudulent and unregulated investment scheme offering returns of between 6% and 13% a month for up to four years.

Clients were told the money was loaned to distressed companies who needed short-term cash and were willing to pay for it.

Detectives found the fraud was similar to many Ponzi schemes, in which a small amount of investor money is used to pay returns.

Clients, who thought their money was safe, were encouraged to bring others to the scheme, but some have lost their life savings, with losses ranging between thousands of pounds and £1m each.

Among those left out of pocket are high-profile businessmen, sports people and celebrities.

Money search

Police have seized about £1m of assets and eight prestige cars, including a Lamborghini, two Ferraris and several Bentleys from a West Sussex dealership.

But they are searching for more of the funds and are keen for more victims to come forward to shed more light on the case.

Among the victims who attended the recent meetings was a woman who said her family lost about £50,000 they saved from benefit payments for the long-term care of her teenage son, who has cerebral palsy.

"We had been saving his disability payments for about 13 years, it was going to be a deposit for a flat or for an annexe to our house," said the woman, a voluntary worker in London.

"The worst thing is the abuse of trust. We invested the money in stages from March last year onwards. Because we got some back, we then invested more."

Two men from Virginia Water, Surrey, aged 40 and 43, and a third man aged 38 from Knightsbridge, central London, have been arrested and remain on bail.

They have been questioned on suspicion of conspiracy to defraud, money laundering and fraud by misrepresentation.

Related BBC sites