A former police officer admitted to defrauding members of a horse racing betting syndicate by running a Ponzi scheme. Michael Stanley, formerly a sergeant with Kent Police, headed the Layezy Racing Syndicate (LRS) and misused the funds put in by clients between 2013 and 2019. The LRS, which began with family and friends as members, had grown to over 6,000 with a waiting list of 3,000 when it collapsed. Stanley deceived members by falsely marketing the scheme as virtually risk-free, according to prosecutor Amanda Burrows.
Burrows told the Sevenoaks Magistrates’ Court that the syndicate was supposed to function whereby members invested money, a small portion of which would be used for gambling together, under Stanley’s control. However, in reality, the defendant committed a massive fraud, unbeknownst to the members. The scheme had over £44 million paid in and around £34 million paid out to members, leaving a £10 million shortfall. Stanley lied to members about the extent of his successful gambling activity and deliberately concealed the fact that he was not operating in accordance with the agreed rules.
Stanley was charged with three counts of knowingly running a business for a fraudulent purpose under the Companies Act 2006 and one count of dishonestly making false representations to LRS members. He pleaded guilty to all five offences, for which a sentencing hearing will be held later at the Maidstone Crown Court.
The ex-police officer’s actions were an unfortunate breach of trust from a person whose profession is to uphold the law. Stanley’s case joins a growing list of swindles perpetrated through Ponzi schemes. According to the Financial Times, with the present economic hardships, there has been an interrogation of the UK’s approach to tackling Ponzi schemes. The UK Financial Conduct Authority stated that it lacks knowledge of the exact number of Ponzi schemes conducted in the UK, which makes it even more challenging to tackle them effectively.
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