A City of London stockbroker has been jailed after he was found guilty of administering an elaborate Ponzi scheme which defrauded creditors of millions of pounds.
Mr Nicholas Levene, a father of three, was convicted at Southwark Crown Court in November 2012 of one count of false accounting, one count of obtaining a money transfer by deception, and twelve counts of fraud. The Southwark Crown Court heard that Mr Levene had left school without any qualifications at the age of 15 and had joined the London Stock Exchange as a trader in the 1980’s. He had worked for the stockbrokers Phillips & Drew, the moneybroker Tullet & Tokyo and Trio Equity Derivatives, and Integrated Asset Management prior to his setting himself up in business in 2005.
Mr Levene would obtain money from investors through a sophisticated sales pitch in which he would state that he could obtain access through his connections to share offerings in companies that were normally unobtainable for ordinary investors. By leveraging his supposed connections he managed to attract (according to the Serious Fraud Office) more than £250 million in investments from various sources between 2005 and October 2009. Instead of investing the monies obtained in shares Mr Levene would spend the money invested on a “lavish” lifestyle, including spending money on private school fees, cars, parties, UK property and bets on spread betting. In order to convince investors that his investments were profitable he would pay off previous investors with monies obtained from newer investors. The fraud was exposed in 2009 when a number of investors sued Mr Levene to force him to return monies owed to them. Sir Brian Souter and Anne Gloag (Sir Souter’s sister) made £3.8 million on a £5 million investment, for example, but never received the profit nor the capital back from Mr Levene. Essex business Victor Lupson and John Bennett also reportedly made a claim for £38 million against Mr Levene.
After being found guilty of the above counts, Mr Levene was sentenced to 13 years behind bars and subjected to a confiscation order to reclaim his assets. This is one of the lengthiest sentences ever imposed for financial fraud, with the longest sentence being the 14 years given to Mr Abbas Gokal for his role in a fraud in 1997 (and a further 3 years for failure to comply with a confiscation order).
Under the Theft Act 1968 a person is guilty of an offence if by any deception he dishonestly obtains a money transfer for himself or another. A money transfer occurs when a debit is made to one account, a credit is made to another, and the credit results from the debit or the debit results from the credit.