After a six-week trial that ended on 20 April, Anthony Locke, 33, from Christchurch in the UK, was sentenced to a five-year jail term.
The sentence came after Locke was found guilty of 23 counts of fraud by false representation and three counts of money laundering.
Locke’s employee Ray King, 54, was also found guilty at the trial of 14 counts of fraud by false representation and given a three-year jail sentence.
Locke and King committed the offences between September 2013 and April 2014 through a scam known as the ‘pension liberation’ scheme.
Investigating officer Paul Sullivan, Dorset Police, said the scam saw the pair mislead 16 victims into transferring their pension pots into an arrangement that they were told would allow them to access half their funds before the age of 55.
This was done via a website Locke created called Successful Pensions.
In total £971,530 (€1.1m, $1.36m) was transferred to Locke and King.
Around 50% of this was returned to the victims, while Locke and King said the other half would be re-invested, reportedly in eco-friendly investment schemes.
Rather than investing the remaining balance, however, the two filtered it into offshore accounts.
The money was then used to fund lavish lifestyles that included expensive cars, holidays and clothing.
“There was no investment and by far the lion’s share of these funds was retained by Locke who spent the money on expensive cars and general living expenses,” Sullivan said.
At trial, the prosecutor said Locke spent over £230,000 buying two Audi cars, a Mercedes, Aston Martin, Porsche and a Lamborghini Gallardo.
If someone in the UK cashes out their pension before the age of 55, it usually attracts an income tax liability of 55% of the entire amount.
However, it was claimed at the trial that the victims were persuaded to lie to their original pension providers that they were employees of Locke’s bogus company. This gave the impression they were not cashing in their pensions and avoided the tax.
“Not only have the victims lost half their pensions but now may face financial penalties from HM Revenue & Customs who will want to recover the lost tax revenue.
“The sentences imposed today send out a clear message to fraudsters who perpetrate these types of offences,” Sullivan said.