British Con Man Pleads Guilty In £14 Million Ponzi Scheme; Terry Freeman ‘Archetypal Fraudster Happy To Steal Money And Ruin Lives,’ London Detective Says

British fraudster Terry Freeman of Essex.

An Essex trader jailed in 1997 for financial fraud emerged from prison with a new name and swindled investors of £14 million ($28.8 million), the City of London Police Department said.

Terry Freeman, 62, known as Terrence Sparks when he was jailed 14 years ago, pleaded guilty in Southwark Crown Court  to fraudulent trading, engaging in business while bankrupt, acting as a director when bankrupt and acting in contravention of an earlier disqualification order, investigators said.

Up to 700 people were fleeced in Freeman’s forex Ponzi scheme, which he operated through a company known as GFX Capital Ltd. Investors were promised “no risk and high returns on the foreign exchange markets,” police said.

“Rub away the sheen and you find Freeman is the archetypal fraudster happy to steal money and ruin lives,” said Detective Superintendent Bob Wishart of the City of London Police Department’s Economic Crime Directorate. “People invested their futures with GFX only to find they had been horribly conned by this criminal.

“Even after being caught Freeman was still trying to blame anyone but himself,” Wishart added. “It was only after a long and painstaking investigation that he finally admitted to the huge amount of personal and financial damage he has caused.”

The scheme unraveled in February 2009, when Freeman complained to police that his investors were threatening him. He was arrested within days.

“Freeman’s deception began to be exposed in 2008 when, expecting a US government bail out of Lehman Brothers, he kept millions of his clients money invested in dollars,” investigators said. “Days later the company went bankrupt, the value of the dollar plummeted and he lost half his total investment fund.

“To try and ease investor concerns, and while at the height of the financial crisis,” investigators continued, “GFX announced 12 per cent profits for the month.”

Believing Freeman to be legitimate, “one mortgage broker handed up to 100 clients and £3.5 million to Freeman, before finally realising the true nature of the GFX operation,” investigators said.

Despite the appearance of legitimacy, “millions of pounds” of investors’ money disappeared through botched trades and overspending. Freeman’s office accommodations alone cost £14,000 per month, investigators said.

And Freeman used investors’ cash to buy “holiday homes in Cyprus and France, a top of the range land rover, an executive box at Spurs and lavish gifts for his new bride, including a £120,000 diamond ring,” investigators said.

Sentencing is scheduled for Feb. 14 — Valentine’s Day.

As Terrence Sparks, Freeman was released from jail in 2000 “and quickly established his new financial operation,” investigators said.

His 1997 conviction stemmed from “eight offences relating to bankruptcy and being a disqualified director,” investigators said.

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4 Responses to “British Con Man Pleads Guilty In £14 Million Ponzi Scheme; Terry Freeman ‘Archetypal Fraudster Happy To Steal Money And Ruin Lives,’ London Detective Says”

  1. This is classic:
    http://www.guardian.co.uk/business/2011/jan/12/british-madoff-terry-freeman-admits-fraud-charges

    reeman himself went to the Metropolitan police in February 2009, complaining that investors were threatening him and admitting he had lost £20m. He was arrested days later. Police said he was trying to draw in new investors even as the operation crumbled around him.

    I don’t know Buckhurst Hill at all, but I know Chingford. Mostly nice, quiet London suburb. Except for the Chingford Hall estate, last time I went there it was run down 1960/70’s era tower blocks.

    Other reports indicate that Freeman was arrested in Feb 2009.

    City watchdog faces huge claim over ‘rogue trader’
    http://www.thisismoney.co.uk/news/article.html?in_article_id=480149&in_page_id=2

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  2. Tony,

    That reminds me of Uncle Andy Bowdoin, who went to the Florida AG’s office to complain that people were saying bad things about him, thereby starting an investigation into his actions. It’s not a good sign of a brilliant mind to report yourself to the authorities. Perhaps he was “too honest” after all…..

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  3. More info on the Police press release:
    http://www.cityoflondon.police.uk/CityPolice/Media/News/120111.htm

    As the ‘Ponzi’ scheme expanded the fraudster had financiers bringing him more and more investors.

    The ‘introducers’ believed they were offering their clients an excellent investment opportunity in a legitimate operation. Some even harboured ambitions to work for GFX.
    Detectives later found how one mortgage broker handed up to 100 clients and £3.5 million to Freeman, before finally realising the true nature of the GFX operation.

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  4. Americans may not realize that ‘The City of London’ has a different meaning than they may think. What most americans think of as the “city of London” is not what an englishman would think. It’s a district in London where most of the banks and brokerages are and have been for centuries. Very much like saying ‘Wall Street” in America. (All the pretty buildings you think of and see on postcards are in Westminster)

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