A British forex boss has been convicted after developing a multi-million pound “Ponzi-style” scheme

A former financier who duped investors by promising “remarkable returns” was convicted on Monday of masterminding a £70m Ponzi-style scheme.

A jury on Monday found Anthony Constantinou, who ran foreign exchange trading firm Capital World Markets (CWM), guilty of seven counts, including fraud by false representation, two counts of fraud and four counts of criminal transfer of property.

Prosecutors alleged during the trial that the 41-year-old, who absconded midway through the trial, oversaw a “toxic atmosphere” at the now-defunct CWM, which was at the heart of the fraudulent investment scheme. CWM received around £70m between 2013 and March 2015, after which the City of London police raided its offices. Hundreds of victims lost around £50 million, the court heard.

CWM offered investors, including people from the Gurkha and Nepali communities, a return of about 5 percent a month, but the company’s managed account was actually a Ponzi-style scheme with little currency trading, prosecutors said.

Constantinou, who has denied wrongdoing, was present at the start of the trial in March but failed to appear in mid-April and the jury was said to have “voluntarily withdrawn”. He did not testify in his defense, although he had legal representation. An international arrest warrant was issued against him.

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Prosecutors alleged that CWM’s finances showed extravagant spending of clients’ money, including £3 million Constantinou spent on his lifestyle, including his wedding and CWM’s launch party. Prosecutors alleged that CWM paid investors directly from the funds invested and spent the money on other things, such as sponsorship deals with Chelsea Football Club and rugby league club Wigan Warriors.

A jury at Southwark Crown Court heard about the office atmosphere at CWM in London’s Heron Tower, where Constantinou, the son of murdered fashion tycoon Aristos Constantinou, was sometimes drunk at work and “boasted with stacks of cash”. During the trial, Constantinou was compared to the “Wolf of Wall Street”, but in reality he was more like the “Wolf of Hampstead” – the London borough where he lived at the time.

David DuRose KC, prosecuting, told the trial: “The Crown says this was a big fraud from start to finish. There were no segregated accounts. And almost no evidence of currency trading.” The prosecutor added that Constantinou – who claimed to be super-rich and told people he was “halfway to being a billionaire” – controlled the bank account into which the money was deposited.

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A former employee, Jay Markham, a stockbroker who worked at CWM from 2014 to 2015, testified at trial that Constantinou was “very aggressive” and a “micromanager who was always ordering people around,” and said staff his kitchen is stocked with Gray Goose vodka. and champagne, but only Constantinou was allowed to drink during the day and was “drunk in the office, often very drunk.”

Markham also testified that the words “Ponzi scheme” were “banned from the office” by Constantinou, who immediately fired anyone who used the term.

Constantinou’s defense team accepted that fraud had taken place on CWM’s managed account, but maintained that Constantinou knew nothing about it and that the fraud was perpetrated by others. Apart from Constantinou, no one else was charged as a result of the CWM investigation.

David Walbank KC, Constantinou’s defense barrister, said in his closing speech at the trial that it was “ridiculous” for prosecutors to suggest that Constantinou “behaved as a lone wolf”. He said Constantinou “behaved like a selfish, spoiled, entitled man-child” and was “not a nice person to deal with”, but told the jury that “none of that makes him a criminal”.

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Detective Inspector Nichola Meghji, of the City of London Police, said: “This has been a lengthy and complex investigation. Anthony Constantinou is a career criminal who strives to make as much money as possible for himself, without regard for anyone else.

Constantinou will be sentenced in absentia on June 9. Constantinou’s lawyers did not immediately respond to requests for comment.

Source: https://www.ft.com/content/c4253cf9-5baa-44b9-a1d1-aecdae9d4c8e