Five Men Ordered to Pay Back Nearly £400 Million for Role in Largest UK Ponzi Scheme
A High Court judge has ordered five men involved in the fraudulent London Capital & Finance (LCF) scheme to repay nearly £400 million. The fraud, described as the largest Ponzi scheme in British history, saw investors defrauded of vast sums.
Two directors of LCF, CEO Michael Thomson and associate Spencer Golding, were found liable for £180 million, while three other individuals—John Russell-Murphy, Paul Careless, and Robert Sedgwick—were held responsible for £211 million.
The court heard that LCF raised £237 million from over 11,600 investors by offering mini-bonds between 2013 and 2018, falsely promising the funds would be invested in UK small and medium-sized businesses. Instead, the money was misappropriated to pay off earlier investors and to enrich those running the scheme.
LCF, which collapsed in 2019, operated as a Ponzi scheme, using new investments to pay returns to previous investors. Mr. Justice Robert Miles noted that it was “very unlikely” that the defendants would be able to repay the sums ordered.
In addition to the directors’ actions, Surge Financial, a company that marketed the mini-bonds, was paid a 25% commission by LCF, which amounted to between £60 million and £65 million. Surge Financial was led by Paul Careless, who was described as playing a pivotal role in the fraud.
Stephen Robins KC, representing the claimants, stated that without Surge Financial’s involvement, the scale of the fraud would not have been possible, accusing Careless’ “greed” of driving the scheme to its fraudulent peak. Careless’ lawyer, Owen Curry, argued that Careless was unaware of all the details of the fraud and should therefore be liable for a lesser amount.
The defendants have 14 days to repay the amounts or face enforcement action from administrators.
