Daniel Pugh has been sentenced to seven and a half years in prison for running a £1.3m Ponzi scheme from his bedroom in Devon following a prosecution brought by the FCA.
Pugh, who set up the Imperial Investment Fund (IIF) with another individual, offered investors unrealistic returns of 1.4% a day, 7% a week or 350% a year through Facebook adverts.
The 35-year-old took money from 238 investors but did not pay out any returns. Instead he spent the £96,000 he received from the scheme on designer clothes and restaurants, as well as withdrawing £18,000 in cash.
Even when Pugh knew the scheme was collapsing, he continued to try to attract more investors, the UK regulator said.
Steve Smart, executive director of enforcement and market oversight at the FCA, said: “Pugh made outlandish claims to hook in victims but in reality this was nothing more than a massive fraud.
“Fighting financial crime is a priority for the FCA. We will take action to ensure criminals face repercussions for their actions, including being denied access to any ill-gotten gains.”
During the sentencing Judge Weekes said there were “persistent and knowing breaches of the regulatory framework” by Pugh and that any remorse for his actions came “woefully late”.
He added: “The consequences for [the victims] are marked and apart from financial loss they feel embarrassment.”
Pugh was also disqualified from being a director of a company for eight years, effective upon release from custody.
The FCA is now pursuing confiscation proceedings to retrieve the proceeds of the crimes from Pugh and compensate the victims. Another individual is wanted in relation to the same offences.
