Wealth manager Freddy David has been jailed today for six years for defrauding 55 victims out of £14.5m in a Ponzi scheme.

Freddy David, 49 of Hartfield Avenue, Elstree, Borehamwood pleaded guilty to obtaining a money transfer by deception and fraud by abuse of position at Southwark Crown Court.

He was also disqualified from being a director of a company for 10 years.

The money was used to fund his gambling habit, which saw him spend £15.6m on gambling websites and £240,000 in one day alone, as well as paying for holidays abroad and his children’s school fees.

The investments made by victims varied, between £20,000 and £750,000 per person.
 
An investigation by the City of London Police’s Fraud Squad found that between 2005 and 2017 the former HBFS Financial Services managing director had been running a Ponzi scheme through the wealth management firm.
 
The case was referred to the City of London Police, the national lead force for fraud by the FCA, which became suspicious of the HBFS bank accounts.

Following the referral, the City of London Police worked closely with the FCA to investigate the affairs of Hertfordshire-based HBFS.
 
The fraud was running in parallel with the legitimate HBFS business, with Mr David using the company’s name as a means to defraud victims out of vast sums of money. 55 victims invested a total of £14,545,494.48.

The investments made by victims varied, between £20,000 and £750,000 per person.

Mr David convinced victims, some of whom he knew personally as friends, that their funds were being held in a high interest bank account which were offering between 4% and 8% interest annually.

The fraudster would tell victims that they could obtain interest each month and they were advised that their money was locked in for varying amounts of time, between three months and five years. 
 
The investigation found that victims were transferring “large sums” of money into the HBFS business accounts, under the impression that they were investing in high interest accounts.

It was found that money were being transferred into Mr David’s personal bank accounts for his own use as well as being used to pay other investors their “monthly interest.”
 
A review of Mr David’s personal bank accounts showed that once he had received transfers from HBFS related accounts, he used this money to fund his gambling habit, as well as for paying his children’s school fees and holidays abroad.
 
The investigation found that Mr David was using client money for his own purposes, including the funding of his online gambling habit. 
 
Victims were provided with forged bank documents which supposedly confirmed that the investments had been made and that interest was being accrued each month.
 
Police Staff Investigator, Katie Watkins, said: “David took advantage of individuals who placed significant trust in him.

“He abused his position and as a consequence this has had a devastating impact on the victims and their families, both financially and psychologically.
 
“David was a well-respected member of his community who exploited this in his position as a managing director of a recommended financial advisory firm to gain trust from unsuspecting investors.”  
 
She added: “This fraud has caused significant emotional distress and financial harm to the victims involved, many of whom invested their life savings in HBFS.

“Some victims are retired and are not in a position to recover the money lost.
 
“The City of London Police has worked tirelessly to investigate this case and to ensure that David was brought to justice for his despicable crimes.

“We worked closely with the Financial Conduct Authority to stop David from committing more fraud and to stop him in his tracks. 
 
“Today’s sentencing reflects the severity of this fraud and should serve as a warning to those who think they can get away with such calculated and callous acts.” 
 
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Freddy David abused the position of trust he had as managing director at a regulated firm to run this appalling fraud.

“The FCA have been working closely with the City of London Police throughout and will now be carrying out its own enforcement action against David on the back of the criminal conviction to prevent him working in financial services again.”

Anton Allera, of the CPS, said: “Freddy David was trusted by his victims who invested their life savings with him.

“They trusted him as their financial advisor but many also considered him a friend or acquaintance through the Jewish community.

“The impact on some victims has been devastating, leaving them in long term financial distress.”