Spalding pensioner guilty of 'despicable' £4 million 'Ponzi Scheme' fraud

A Spalding man is facing jail after being convicted of a £4 million ‘Ponzi Scheme’ fraud.

Police labelled 73-year-old Christopher Toynton’s crimes as ‘despicable’ as he was found guilty of four counts of fraud by false representation and five counts of fraud by abuse of position.

Toynton, of Horseshoe Road, Spalding, declined to give any evidence in court and no other evidence was offered in his defence – but he splashed out on luxury cars and holidays with his ill gotten gains.

A second man, Ross Gibson, 27 of Eve Lane, Dudley, pleaded guilty to fraud by abuse of position, carrying out regulated activities and fraud by false representation.

Investigation began in 2019

Lincoln Crown Court heard how detectives from the Economic Crime Unit (ECU) began investigating in the spring of 2019 following complaints of suspected fraud connected to the Lottery Syndicate Club Ltd in Spalding.

The Ponzi scheme operated between late 2017 and 2019 and had several hundred members from across the country, including Lincolnshire and Cornwall. Some of the syndicate’s members also lived abroad.

Toynton acted as the scheme’s sole director, and was responsible for all administration, financial transactions and contact with investors.

He also appointed Gibson to be the scheme’s trader, despite his lack of professional experience or qualifications in financial investment or market trading.

Gibson acted as an unauthorised trader and falsely claimed that trading was a success despite no profits being made.

Cash spent on cars, holidays and watches

Around four million pounds was invested in the scheme, most of which were either lost during trading or pocketed and misused by Toynton and Gibson for their own personal gain.

It was revealed Toynton spent £134,000 of investor’s money on luxury cars and holidays, while Gibson spent £400,000 on holidays and designer watches.

Victims were led to believe that the scheme was legitimate and that their investments were safe. Toynton also assured victims that the scheme was low risk and that they could withdraw funds at any time.

Although some money was sent back to victims to add credibility to the scheme, the high returns they were initially promised never materialised.

The scheme eventually collapsed in the spring of 2019. However, Toynton continued to perpetuate the scheme’s success until his and Gibson’s eventual arrest in July 2019.

Proceeds of Crime Act (POCA) confiscation proceedings will take place after sentencing.

Victims suffered financial losses and mental health issues

PC Phil Gidlow, who led the investigation for ECU, said: “This verdict is a culmination of years of hard work by our dedicated investigators in the Economic Crime Unit and only made possible due to the support of the victims.

“Fraud is a despicable crime, undermining our basic trust in others. As a result of this scam, the victims not only suffered huge financial losses, shattering their current financial position and plans for the future, but also caused some to have mental health and relationship problems.

“I hope this case reflects that we are determined to investigate and prosecute the perpetrators and that the victims feel some justice has been achieved.”

What is Ponzi scheme?

Ponzi schemes are ‘get rich quick’ investment scams that pays existing or earlier investors with funds collected from new investors. Organisers often promise to invest your money and generate high returns with little or no risk.

In this type of fraud, there is no actual investment scheme and no profits, as the fraudsters siphon off the money for themselves.

After receiving the promised returns on their investment, the first investors start to spread the word to family and friends. In this way, the scheme gains credibility.

Ponzi schemes require a constant flow of cash and new investors to survive. Without this, the scheme folds quickly and without warning, leaving investors out of pocket.

How to spot a Ponzi scheme

There are a number of ways to spot the signs of a Ponzi scheme.

You are promised high returns on your investment with little to no risk. Every investment carries some degree of risk, so be cautious when someone guarantees returns on investment opportunities.

You have difficulty receiving payments or can’t cash out. Fraudsters will often offer higher returns to persuade the investor from cashing in on their investments.

Fraudsters will use hard-sell techniques and will try to pressure you into making rushed decisions, giving you no time to consider the nature of the investment.

You are encouraged to keep your investment secret to ensure you received maximum returns. This allows the fraudsters to hide the real nature of their scheme.