Former Kent policeman guilty of running horse racing 'Ponzi scheme'
He misused millions of pounds of clients' money over six years
A former police officer has pleaded guilty to defrauding members of a horse racing betting syndicate.
Michael Stanley, who headed the Layezy Racing group, operated a "fraudulent Ponzi scheme" and misused his clients' money between 2013 and 2019, a court heard.
The 67-year-old, who used to be a sergeant with Kent Police, was arrested in August 2019 and was later charged with dishonestly making false representations to members of the Layezy Racing Syndicate, knowingly running a business for a fraudulent purpose contrary to the Fraud Act 2006, and three counts of knowingly running a business for a fraudulent purpose contrary to the Companies Act 2006.
He pleaded guilty to all five offences at Sevenoaks Magistrates' Court on Thursday.
Prosecutor Amanda Burrows said: "Between at least 2013 and February 2019, the defendant operated a fraudulent Ponzi scheme and the scheme involved an operation of a betting syndicate called the Layezy Racing Syndicate (LRS)."
Ms Burrows said the LRS was supposed to have been a scheme whereby members invested funds for which a small proportion was to be used for "gambling collectively", which was controlled by Stanley.
"Unknown to members, in fact, the defendant was operating a massive fraud," the prosecutor added.
The court heard about £44 million was paid into the scheme, an estimated £34 million of which was paid back out to members, with a shortfall of around £10 million.
The scheme started out with family and friends as clients but grew to more than 6,000 members, and had a waiting list of 3,000 people at the time it collapsed.
It was "marketed as being virtually risk free", Ms Burrows said.
Stanley claimed he was carrying out successful gambling with horses but "lied" to members about the amount of success he was having, and "deliberately concealed" that he was not operating the scheme in accordance with its rules, the court heard.
He admitted dishonestly making false representations to members of the Layezy Racing Syndicate, namely that each member's funds, having been paid into the syndicate, were available for withdrawal on notice.
Also, that the reported increase in the value of each member's fund resulted from successful gambling "carried out, controlled, and or directed" by Stanley, according to the charges.
He also pleaded guilty to four charges of knowingly running a business for a fraudulent purpose, with one count contrary to the Fraud Act 2006 and three contrary to the Companies Act 2006.
Of the latter three counts, the first relates to the running of Layezy Ltd, the second to Layezy Racing Ltd and the third to Number 1 Guide Ltd.
All four charges said Stanley misused money held in the betting scheme for "personal gain" and to "fund members' withdrawals that included profits to which they were not entitled".
Stanley, of Walderslade, Kent, was bailed on conditions to appear at Maidstone Crown Court at a later date for sentence.