'UK Madoff' jailed for eight years in £14m scam

A disqualified director who admitted losing and spending £14m of investors' money as part of Madoff-style Ponzi scheme has been jailed for eight years.

Terry Freeman, 63, was sentenced at Southwark Crown Court yesterday after an investigation by the City of London Police.

Freeman had earlier pleaded guilty to fraudulent trading, engaging in business while bankrupt, acting as a director when bankrupt and acting in contravention of a disqualification order.

The case prompted one senior officer at the force to describe the case as a "brutal reminder of how brazen investment fraudsters can be".

Detectives uncovered how up to 700 people invested in Freeman's company, GFX Capital Ltd, with the promise of no risk and high returns on the foreign exchange markets.

In fact millions of pounds of their money were soon disappearing on botched trades and running his company from offices costing £14,000 per month.

Much of the rest was moved straight into a foreign account and blown on holiday homes in Cyprus and France, a top of the range Land Rover, an executive box at football club Tottenham Hotspur and lavish gifts for his new bride, including a £120,000 diamond ring, the police say.

Freeman, from Essex, initially managed to cover-up his crimes by moving funds around the SAXO Bank trading accounts and issuing false GFX statements telling investors they were all making healthy profits.

One couple were informed their £1.4m investment had risen to £2.7m, only to later find just £14,000 in their trading account.

Freeman's deception began to be exposed in 2008 when, expecting a US government bail out of Lehman Brothers, he kept millions of his clients money invested in dollars.

Days later the company went bankrupt, the value of the dollar plummeted and he lost half his total investment fund.

GFX announced 12% profits for the month, but by now his clients were growing suspicious of his continued run of success and started to demand their money back.

In February 200, Freeman reported to the Metropolitan Police he was being threatened by angry investors, and admitted to losing approximately £20m. He was arrested a short while later.

Detective Superintendent Bob Wishart, from the City of London Police's Economic Crime Directorate, says: "This case is a brutal reminder of how brazen investment fraudsters can be, and how callously they will take their victim's money.

"If there can be one positive out of this case, it would be that it might encourage future would-be victims to think twice before investing."