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.