Fraudster jailed for £34m Ponzi scheme

Conman who defrauded 8,500 investors lived lavish lifestyle
Click to follow
The Independent Online

A Ponzi-scheme fraudster who lived a life of luxury after conning £34m out of his 8,500 victims has been jailed for 10 years.

Kevin Foster used the money to fund a lavish lifestyle, including withdrawing £3m in cash and spending £600,000 on buying a farm and more than £700,000 on luxury cars.

The five-bedroom farmhouse home was fitted out with special breeding pools which he filled with koi carp. He even bought exotic animals to start a private zoo.

He is thought to have amassed £34m from investments made by the people he conned by holding a series of roadshows at hotels and conference centres across the country.

The former taxi driver boasted at his "KF Concept" roadshows that his scheme had 50,000 investors and that returns were so great that "I'm making about £28.50 from every £1".

He promised high returns on a collection of gambling and network marketing activities. One of his stunts to dupe people into investing at the roadshows was, amid loud music and cheering, to pull names out of a hat on stage and give winners cars or cash prizes to illustrate how much money the scheme was making.

He would make charitable donations and sponsor local sports teams to convince people he was as successful as he boasted. Another trick was to make payouts to a few early investors and encourage them to get family and friends to sign up. But the only way he was able to give investors any money back was by paying them with cash from new members. By the time he was caught, it is estimated he would have had to have generated more than £250m to have met the expectations of all of his investors.

Judge Nick Madge, sentencing Foster yesterday at Harrow Crown Court in north-west London, described the fraud as a substantial and deliberate course of conduct that was sophisticated and elaborate. Foster, 52, of Doddington, Kent, was found guilty last month, after a seven-week trial, of unauthorised investment activity, deliberately concealing facts from investors and stealing investors' funds. In all, he was convicted of eight counts under the Financial Services and Markets Act 2000.

By the time his schemes were stopped in February 2004 he had duped 8,500 people into signing up to his schemes. He was questioned early in 2004 by Kent Police and the Financial Services Authority and his home was searched for evidence. After a complex investigation by the Serious Fraud Office (SFO) he was charged in May 2007. The trail of evidence was so complicated that it took three years to get to that stage.

The largest portion of funds was put into an illegal overseas pyramid selling scheme called Planline, purportedly run by a Cayman Islands-registered company called Infocus International, which had bank accounts in Switzerland.

Infocus International claimed to be an internet-based art dealership but the "artwork" turned out to be worthless copies of paintings or photographic prints and the purchases were a front. Of the £12m paid into Planline only £1,703 was ever returned.

Foster was cleared of one count of theft relating to £220,000 found at his address and the jury could not reach a verdict on a further theft count relating to a Ferrari Spyder.

SFO director Richard Alderman said after Foster was convicted: "This was a very complex investigation and the SFO was determined to bring justice for the many victims who lost their hard-earned savings to this Ponzi scheme."