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Oct 11 - Fraudster Who Ran Ponzi Scheme Jailed For 22 Months

A local man who defrauded 19 people by convincing them to invest in a “crude” Ponzi scheme has today been jailed for a total of 22 months. The victims of the fraud lost a total of £79,800.

Keilan Charles Prescott, of Vineyards House, had earlier pleaded guilty to 19 charges of fraud by false representation.

He also pleaded guilty to an additional charge of fraud by false representation relating to the use of someone else’s bank card details and one charge of fraud by abuse of position.

PONZI SCHEME

Between 2014 and 2016, Prescott offered what he said were “legitimate and guaranteed investment opportunities” to people he knew in Gibraltar.

He set up what is known as a Ponzi or pyramid scheme which is a form of fraud which directs profits to original or older investors by using funds obtained from newer investors. Such schemes typically collapse when the flow of funds from new investors dries up.

He told them the scheme would yield a good return by doubling the original amount “within weeks”, often supplied victims with contracts bearing the logo of a well-known local firm and claimed he worked as an accountant.

Prescott said he was acting as the middleman for a football scout in Spain - known only as “Rafa” - who was making the investments. However, although the initial investments were successful, investors never received a return on their final contributions before the scheme collapsed.

Prescott spent some of the proceeds of the fraud on “personal lifestyle expenses” and gambling.

In 2017, Prescott attended New Mole House of his own accord and informed the RGP about his investment activities.

FURTHER CHARGES

In a separate case, Prescott used the bank card details belonging to someone he knew to gamble online. A total of £890 was deducted from the card but this was refunded by the bank. He pleaded guilty to one count of fraud by false representation in relation to this incident.

In a further separate incident, Prescott booked himself a room at the Sunborn Hotel using the email address of a local insurance company where he had worked. He told the hotel to charge the company and ran up a bill of £382. He pleaded guilty to one charge of fraud by abuse of position in relation to this.

SENTENCING

Speaking this morning at the Supreme Court, Prescott’s lawyer Suresh Mahtani said that his client had initially embarked on what he thought was a legitimate investment scheme and that it was only later that, as he was unable to pay back some of the investments, he set up the “crude Ponzi scheme.”

He said his client had no previous convictions and had shown remorse adding that Prescott had told him he was “willing to work day and night” to pay back his victims. He said his client had been a “prisoner in his own home” during his 18 months on bail because he had received numerous violent threats from those affected by the fraud.

In passing his sentence, Puisne Judge Christopher Butler said that Prescott had been motivated by greed and had enjoyed the “lifestyle benefits” of the scam. Mr Justice Butler said Prescott had only stopped his activities because he had recognised that it was “inevitable that the game was up”.

The judge added that any promises the repay the money were “unrealistic” and “empty” and that the chances that this would happen were “remote”. As such, he made no order for repayment.

He sentenced Prescott to 22 months for the 19 fraud charges relating to the Ponzi scheme. He gave him credit for cooperating with the RGP and pleading guilty.

He also sentenced Prescott to three months for the use of bank card details and one month for the fraudulent hotel booking. He ordered that these sentences be served concurrently so the total time to be spent in prison is 22 months.

Kerrin Drago appeared for the Crown.

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