Ex-financial advisor Grahame Whitehead was jailed for ten years last week after heading a pyramid fraud scheme for five years between 2004 and his arrest in 2009, which netted him £12m!
Whitehead conned his victims into investing in two fake schemes, but the funds were actually going directly into his own bank account which he used to purchase property in South Africa and the UK. To lure in potential clients, he promised returns of up to 12% with little or no risk – certainly tempting but clearly unrealistic.
His victims were mainly retired individuals who were persuaded into investing their valuable life savings, only for them to be lost entirely. His actions were abhorrent, selfish and without conscience, and certainly did nothing for the reputation of advisers and the financial services industry.
Hopefully, his prison sentence will be a lesson to those who would consider being involved in such a scheme and will highlight the pain and suffering caused to the victims involved. The victims, who for the past ten years have had to find a way to cope whilst the legal proceedings have continued, will have to wait until October to find out what compensation they may receive for the loss of their funds.
The case does highlight the absolute necessity of making sure that any financial company you deal with has all relevant permissions. And always remember, if something seems too good to be true, it usually is!
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