Stephen Farley jailed over £18m investment fraud

Stephen Farley admitted operating an elaborate Ponzi scheme

An ex-company director who carried out an "elaborate" £18m investment fraud has been jailed for seven years.

Stephen Farley, 57, pretended he was an experienced financial dealer and encouraged people to invest money with his firm.

The High Court in Edinburgh heard that he used the cash to fund his lavish lifestyle, involving expensive cars and hotel stays and helicopter trips.

Farley, of Newtongrange, Midlothian, earlier admitted the fraud.

Investors believed the money they handed over to Farley was being ploughed into the foreign exchange market.

He lured them in, sometimes by cold-calling, with promises of guaranteed minimum returns and limited potential losses.

But the truth was he was not an experienced trader, could not make any such guarantees, and most of the cash never saw its way to that market.

'Web of deceit'

He was in fact using some of the money paid in by investors to issue returns to other people.

Judge Lady Scott listened for almost four hours as prosecutor Alan Mackay set out a Crown narrative of Farley's dealings and the impact upon his multiple victims.

Individual investors affected by the scheme lost sums from £500 to more than £2m, the court heard.

One retired man had to return to work after falling victim to the scheme, while one woman lost her life savings.

Meanwhile bank statements show that Farley spent his cash on two Bentleys and two cruises, and he had plans for a seven-figure home renovation.

Lady Scott told him: "This was a complex and detailed fraudulent scheme which involved elaborate deception... Very significant sums of money were involved."

She added: "You are an educated man who had the opportunity to make something of his life. You chose to apply yourself to weaving a web of deceit."

'Motivated by money'

Det Insp Arron Clinkscales, of Police Scotland's economic crime unit, said Farley's fraud was akin to a Ponzi-scheme.

He said: "Stephen Farley came across as a legitimate business man and presented a very enticing offer to his victims, which convinced them to invest heavily in his company.

"From the outset, Farley has deceived each investor and was never able to provide them with the financial rewards he had promised them.

"Farley has proven himself to be motivated solely by money and has given no consideration for how his actions would impact on the people who sunk their savings into his Ponzi-scheme.

"The sentence handed to him reflects the joint commitment of Police Scotland and the Crown Office to bring those responsible for crimes of this nature to account and provide justice for victims."