Alex Hope was sentenced at Southwark Crown Court late last week after he was found guilty of defrauding investors and operating a collective investment scheme without authorisation, raking in considerable sums of money from around 100 investors.
His co-defendant, Raj Von Badlo was sentenced to two years’ in prison for “recklessly making false representations” and promoting a collective investment scheme without authorisation.
Badlo – also known as Raj Shastri – promoted Hope’s scheme to a large number of investors and was said to have been aware of the risks. He pleaded guilty to the offences in July 2014.
Unlike Baldo, Hope had “shown no acceptance of his own dishonesty”, said the Judge HHJ Taylor. He was convicted of fraud by a jury on 9 January, after pleading guilty to setting up a collective investment scheme without authorisation in April last year.
“Sophisticated scheme”
Judge Taylor said Hope had forged fake documents and created a false persona, setting up a sophisticated scheme which enticed dozens to invest their money. He then used new clients’ money to pay those who wanted to withdraw their funds.
Despite exaggerating his trading abilities and telling his clients he would invest successfully on FX markets, Hope only traded 12% of the total money and lost almost all of it.
Instead of trading, the fraudster used over £2m of investors’ money to fund his lifestyle, spending £1m in a casino, over £200,000 on designer watches and shoes, £60,000 on foreign travel, and over £600,000 in bars and nightclubs in London, Miami and New York.
The fraudulent scheme was closed down by the Financial Services Authority in April 2012, and half of the amount taken from investors was frozen. Both Hope and Baldo were then arrested and their houses were searched in a joint operation with the FSA and the City of London Police.
“Flair for trading”
Georgina Philippou, the Financial Conduct Authority’s acting director of enforcement and market oversight, said: “Alex Hope presented himself as a trader with a flair for trading on the foreign exchange markets when in reality he spent a good deal of his investors’ money on himself.
“This case shows that the FCA will vigorously protect consumers from those who break the law and do whatever it can to get their money back to them.”
