Finance boss jailed for £20m Ponzi fraud

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A director of a finance company has been jailed for seven years after misleading investors out of £20m, which he used to buy racehorses and fund other businesses

Liam Francis Wainwright, from Leeds, had falsified documents to mislead investors out of £20m and spent their money on ventures including a racehorse syndicate and his own failed private businesses.

These investors were victims of a classic Ponzi scheme, whereby the returns paid to them were funded by capital injections from later investors.

Wainwright, who had been a director of Rawdon Asset Finance Ltd, told investors and shareholders that the company was lending money to businesses with security on property, land or plant and equipment.

But he was, in fact, using the cash to pay returns to other creditors, buy into a racehorse syndicate and fund other companies, including Lincolnshire-based property development and a redevelopment company in West Yorkshire, both linked to himself.

The court heard that Wainwright had enjoyed a lavish lifestyle as a result of his offending and that his actions had had a devastating impact on individuals and families who had invested money.

By the time the company went into liquidation, creditors were owed more than £20m. Liquidators have so far recovered £750,630.

Wainwright admitted that he began to falsify accounts in 2017, to hide the company’s true financial position from his co-directors and investors.

He also admitted he had earlier forged a mortgagor’s signature on a legal charge to mislead investors and had breached the terms of a previous bankruptcy between 2010 and 2011 by acting as a director of the company without the court’s permission.

Wainwright was disqualified for 11 years in November 2020 after investigators at the Insolvency Service found he had falsified around £12m worth of entries in the company’s loan book in the two years before the company entered administration in 2019.

Following a further criminal investigation, he was brought to court on counts of false accounting, fraud, forgery, and acting as a director while bankrupt.

The court heard that Wainwright had also lied about the company’s accounts and the destination of funds to elicit £100,000 from one investor only weeks before the business collapsed, in the full knowledge that investors would not get their money back.

Julie Barnes, chief investigator for the Insolvency Service, said: ‘Liam Wainwright’s greed and selfish actions had a devastating effect on the people who had put their trust in him and his business.

‘His victims included elderly and vulnerable people. Many investors lost most or all of the money they had entrusted to him, and some lost their life savings.

‘His sentencing today shows that the Insolvency Service will seek the toughest penalties for those who break the law, to help ensure that the UK is a safe place for investors and businesses.’

Wainwright pleaded guilty on 20 February 2023 at Kirklees Magistrates’ Court and was sentenced at Leeds Crown Court on 9 June 2023.

If you have questions on fraud, visit BrAInbox today where you can find answers to questions like Can I dismiss someone for fraud?

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