Investment fraud is on the rise; how to protect you and your business

16th January 2023

Ex-premier league footballer Richard Rufus was jailed for 7.5 years at Southwark Crown Court on 12th January for his part in an investment scheme fraud valued at over £8m.  The Rufus story has caused shock in some quarters, but unfortunately, it is one we have often heard about recently. We are currently acting on a significant number of fraud matters, several of which sound very familiar to the reports of the scam Rufus was involved in.

We have seen an increase in investment scheme frauds over recent years.

Our team has considerable experience of acting for both individual investors who have lost money, and liquidators appointed in respect of the companies operated by the fraudsters. Both have engaged with us to recover the lost funds, and there are a large number of cases where investors allege that the losses run into the millions, including claims valued at £70m and £10m.

Whilst each scam is different, there seem to be several common features:

  • The fraudsters prey on Investors who have a desire to achieve enhanced returns
  • The promised returns are well in excess of those that more traditional investments may reasonably achieve
  • The investments are described as highly complex and inaccessible to the punter on the street – hence the opportunity offered is promoted as unmissable
  • The investors are told of the experiences of earlier investors who achieved eyewatering profits
  • There is little or no visibility on the investment once monies are paid over
  • The promised profits are fiction!

We have recently successfully recovered large sums on behalf of victims of a scheme that appears remarkably similar to the Rufus scam. We got these results through early and decisive legal action taken as soon as problems became apparent to the investors. James Wood, Partner in our litigation team specialises in insolvency litigation and civil fraud says:

“We have repeatedly found that the key is to act swiftly. The longer the fraudsters are left in control of your money, the harder it becomes to recover it.”

We are acting for liquidators of several companies which have been used as fronts for investment frauds. Again, early action has borne fruit with freezing injunctions being obtained to freeze the fraudsters’ worldwide assets as early as possible. Damian Kilroy of our insolvency litigation team acts on the Hudspiths Ponzi Scheme. He helped obtain freezing injunctions within 2 weeks of our clients taking office as liquidators; since then we have seen several similar schemes.

He says: “I have been amazed at just how brazen the fraudsters have been. When we look at the cases, we start to see just how blatant the frauds are, with almost no real attempt to hide the wrongdoing. Perhaps these fraudsters have seen the “Wolf of Wall Street” and copied the model!”

Have you been or suspect to be a victim of fraud? We’re here to help, get in touch with us as soon as possible – act early, do not delay!

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