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Two Men Behind Multi-million Pound Ponzi Scam Jailed

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The men, who had no professional investment experience or qualifications, conned people out of nearly £4 million. In May, they were each sentenced to over four years in prison.

Falling house of cards isolated with clipping path

Lottery Syndicate Club – an illegal
Ponzi investment scheme

Christopher Toynton and Ross Gibson ran the Lottery Syndicate Club between 2017 and 2019. They had several hundred members and raised £3.9 million. Detectives from Lincolnshire Police’s Economic Crime Unit began investigating the pair after receiving several complaints of suspected fraud.

It was revealed that none of the proposed investments were ever made, and the men spent over half a million pounds of investors’ money on luxury cars, holidays and designer watches. Some investors did receive payments, to make the scheme look credible, but this money was taken from other people’s ‘investments’ – effectively ‘robbing Peter to pay Paul’.

The Lottery Syndicate Club collapsed in 2019 and the men were arrested a few months later. They were charged with offences relating to fraud and carrying out regulated activities. Ross Gibson pleaded guilty and Christopher Toynton was found guilty at the jury trial leading to the prison sentences.

Named after 1920s fraudster Carlos Ponzi, Ponzi schemes attract investors with promises of low risk and high reward. Mr Ponzi operated in the United States and Canada and is thought to have cost his investors $20 million.

In a Ponzi scheme, investors might be promised a high rate of interest, to be paid within a certain amount of time. They understand that their money will be invested at low risk, however, the money handed over is never actually invested and the value of their ‘investment’ never increases. Supposed profits are, in fact, taken from later investors’ money that has been paid into the scheme. When people try to cash in their investments, they realise the money has disappeared and their ‘investment’ never existed in the first place. Eventually, the scheme inevitably fails.

Sarah Spruce, Head of TLW Solicitors’ Fraud and Scam team, says:

“There are a number of tell-tale signs of a Ponzi scheme similar to the Lottery Syndicate Club that led to the convictions of the scammers in that case.

All investment carries some degree of risk, so be wary of schemes offering guaranteed risk-free returns. Also, you should never feel under pressure to make an investment decision quickly, so make sure you step back, take your time, do additional research and take specialist advice.

If you have had trouble getting paid your ‘guaranteed returns’ or have been unable to cash in your investment, the scheme might be a scam.”

If you paid into a Ponzi scheme, you may have transferred the money via online or telephone banking. The Faster Payments Service means money can be transferred almost instantaneously from UK bank accounts, a feature that scammers have taken advantage of.

Authorised Push Payment (APP) Fraud happens when a customer authorises their bank to make a payment to another bank account, believing the transaction to be for a legitimate purpose.

In the case of a Ponzi scheme, the bank’s customer thinks they are making a genuine investment, but the scammers never invest their money as intended and may even transfer it into another account, often overseas, making it difficult to trace or recover. Many people are targeted by APP fraudsters when they are feeling vulnerable, for example, after a period of illness or stress in their lives.

If you have lost money in an investment scam, you should report it to Action Fraud and your bank. Your bank should carry out their own investigation and you may receive a refund. Banks have a duty to apply due diligence when looking after your money and should have robust security measures in place to highlight and act on APP Fraud red flags, such as unusual or out-of-character transactions. They can pause a bank transfer, in order to find out more information about the nature of the transfer or block it completely.

If your bank does not deal with your complaint satisfactorily, it is possible to take the case to the Financial Ombudsman Service (FOS). FOS was set up to settle complaints between consumers and financial services businesses.

Our Investment Fraud team has many years of experience in dealing with compensation claims through the Financial Ombudsman Service (FOS), even where initial complaints have been rejected. It will cost you nothing to make an enquiry and we work on a no-win-no-fee agreement. This means, that, if we take on your case and it is unsuccessful, we will not charge for the time we have spent.

If you, a friend, a colleague or a relative have been conned into making payments to Ponzi scheme fraudsters, please contact our specialist team for a confidential, no-obligation conversation. You can call us on 0800 169 5925, email info@tlwsolicitors.co.uk or complete one of the forms below.

It is important to get in touch as soon as possible as strict time limits can apply.

Minimum claim values apply.

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