Between October 2002 and January 2013, Phillip Boakes misled around 30 investors into thinking he was still an IFA, despite no longer being authorised by the Financial Conduct Authority (FCA).
According to a statement from the FCA, investors lost more than £2.5m following the collapse of the fraudulent scheme. Of the total £2.1m traded by him in the foreign exchange market, almost £1m was lost.
Boakes used most of the money to fund his extravagant lifestyle, spending £175,000 on cars and £214,000 on foreign holidays.
“Life savings have been lost”
“This was a classic Ponzi scheme over a number of years with a large number of victims,” said judge Lorraine-Smith during sentencing. “Lives have been changed and life savings have been lost. Boakes and his family lived a lavish lifestyle that he could not begin to afford but for his fraudulent activities.”
She also said he had tried to prevent investors from assisting the FCA with its investigation.
Boakes ran the scam through his company CurrencyTrader, which claimed to carry out foreign exchange spread betting for its customers, promising guaranteed annual returns of 20% or more.
But in reality, Boakes was not authorised by the FCA to accept deposits and the pledge of guaranteed returns was a sham. The “returns” were either funded from an investor’s own deposit or from money received from new investors.
Boakes pleaded guilty to fraudulent trading, using a forged instrument, and accepting deposits without authorisation.
He admitted failing to trade investors’ money as promised, lying about the value of funds and the returns they would generate, and confessed to using clients’ cash for his own benefit. He also admitted using forged documents to support the fraud.
Without the discount for his early pleas, Boakes would have been sentenced to 13-14 years in jail.
“Promised fantastic returns”
Georgina Philippou, acting director of enforcement and market oversight, said: “Using fraud and forged documents, Boakes took in those who trusted him to invest their money. He promised fantastic returns but, as is so often the case with unauthorised investment schemes, those who invested ended up with significant losses.
“We will not hesitate to take the strongest action to ensure that consumers are protected and individuals are held to account for actions that undermine the integrity of the financial services industry.”
