Financial fraudsters all have one thing in common, they are difficult to track down and make every effort to hide their ill-gotten gains.  Even when they are discovered and prosecuted, as a rule, their assets have been spirited away through a serpentine route of off-shore vehicles created to prevent their victims from gaining compensation for their losses due to the illegal deceptions. 

Joanna Bailey  of Giambrone's financial fraud team commented "the Serious Fraud Office frequently experiences the frustrating situation where after a considerable effort to track down and prosecute a fraudster they find that the fraudster is empty-handed and the funds or access assets to compensate the individuals who have been deceived are nowhere to be seen." The position has now changed due to a court decision.

Nicholas Levene, a former City trader, set up what was effectively a "Ponzi" investment scheme which he operated to scam unwary investors; he dishonestly obtained over £250 million which he used to fund a lavish lifestyle, diverting monies to his own bank account or directly to gambling sites. He also bought property in the UK and Israel, overseas travel, holidays and excessive lifestyle expenses. He paid some investors "profits" to support the pretence of the fraud. However, eventually, Mr. Levene was the subject of a civil action by a group of his victims and his scheme collapsed.  

Following an investigation by the Serious Fraud Office and Mr. Levene was charged with 12 counts of fraud, one count of false accounting and one count of obtaining money transfer by deception.  He was tried and sentenced, after changing his plea to guilty. The judge commented when sentencing him "It was a fraud from the outset, where countless lies were told.  It was rank dishonesty.  There were separate acts of individual moments of betrayal." 

Mr. Levene also received a confiscation order and his assets were assessed at the time as £1. Giambrone's financial fraud team recognise that the confiscation order enabled the Serious Fraud Office to keep the matter open against the possibility that assets may, in the future, become available. Eventually, the Serious Fraud Office obtained a restraint order in relation to Mr. Levene's self-invested personal pension (SIPP) to which he would gain access on his 55th birthday.  

Mr. Levene's SIPP matured in 2019 and his realisable assets were valued at £118,000.  The total value of the pension was £230,000 but the terms of his divorce settlement entitled his former wife to 50% of the pension.  Under Section 22 of the Proceeds of Crime Act 2002 the Serious Fraud Office applied for a reconsideration of the available amount and the court ruled that the funds would be used to compensate Mr. Levene's victims.  Jonathan Midgley of the Serious Fraud Office stated "this was a complex and extensive fraud where Nicholas Levene used investors' monies to finance a lavish personal lifestyle". In an attempt to prevent a repeat of Mr. Levene's fraudulent behaviour SFO obtained serious crime prevention order (SCPO) which was also imposed by the court preventing Mr. Levene, on release from prison, from promoting or advising on financial investments for a period of five years.

Giambrone's financial fraud team now has another route to obtain compensation for individuals who have fallen victim to financial fraudsters.

If you would like to know more about how you can obtain compensation for a financial fraud please click here

Originally published June 8, 2020.

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