At a hearing at the City of Westminster Magistrates’ Court today, Phillip Harold Boakes, the mastermind of a vast-scale Ponzi scheme that defrauded investors of more than £3.5 million, got a 730-days prison sentence, the reason being his failure to pay a confiscation order.
The new prison sentence is in addition to the term of 10 years’ imprisonment that Mr Boakes received in March 2015, which was upheld by the Court of Appeal in November last year.
The Confiscation Order that Mr Boakes failed to satisfy is in the sum of £165,731. The period to satisfy the Order expired on February 2, 2016. As of today’s date, the full value of the Order is still unpaid and interest is accruing at the daily rate of £36.32.
Commenting on the case, Mark Steward, Director of Enforcement and Market Oversight, said:
‘The FCA welcomes the Court’s decision today. Wrongdoers should not be able to retain the benefits of their wrongdoing. The FCA will continue to ensure orders to strip wrongdoers of their ill-gotten gains are enforced and not ignored or evaded.’
Mr Boakes ran his scam through his company Currency Trader Ltd, which claimed to carry out foreign exchange spread betting for its customers. The scam solicited investors by promising them guaranteed annual returns of 20% or more. In fact, Mr Boakes was not authorised by the FCA to accept deposits and the pledge of guaranteed returns was a fiction. The ‘returns’ were funded from the deposit itself or from funds received from new investors.
Mr Boakes spent much of the investors’ funds on a lavish lifestyle and unsuccessful financial trading. He was made bankrupt on January 30, 2013 and at the time the Confiscation Order was made, it was accepted that he had no assets available to him to satisfy it.
Even after having serving the sentence in default of payment, Mr Boakes will remain liable for the outstanding debt.
You can view the FCA announcement by clicking here.