Birmingham Crown Court: Four trials lead to 13 convictions
A former City solicitor who was one of the architects of a Ponzi scheme that multiplied into several investment frauds has been jailed for 15 years.
In all, 13 people have been sentenced for a combined 120 years for their roles in the frauds.
Jonathan Irvin Denton was struck off in 2018 for his conduct, which also led to a record £500,000 fine for US law firm Locke Lord, where he had been a partner, for multiple failings, including allowing its client account to be used as a banking facility.
This was the first time that a law firm was found to have lacked integrity.
His conviction and sentencing in December 2022 can now be reported after the last of four separate trials over recent years at Birmingham Crown Court concluded.
North Yorkshire Police’s investigation into the fraudulent investment schemes started in 2015.
As a result of a previous investigation – Operation Circus – it received reports that Simon Charles Oakley, who came to police attention in that earlier investigation, was working with Mr Denton, and an investment scheme they were promoting was dubious and likely fraudulent.
Investigators interviewed witnesses from across the UK, Europe, America and South-East Asia, and examined bank records linked to dozens of individuals and companies, as part of Operation Circus Two.
Their enquiries identified a number of North Yorkshire-based victims, and uncovered several complex and convoluted ‘Ponzi’ investment schemes, elaborate frauds that lure investors with promises of huge returns, paying profits to early investors with funds from more recent investors.
“The investors believed they were dealing with honest, law-abiding, professional people, and investing their money in a safe, virtually risk-free scheme which would net them a large return,” North Yorkshire Police said.
“Their trust was abused and in reality although some people received some of their money back many got nothing. Some of the victims were wealthy investors, but many were investing their pensions and life savings – losing everything.
“The effect on them and those close to them was devasting both financially and personally. Although difficult to quantify a definitive figure, it’s believed that in total investors lost around £30m.”
A trial of some defendants started in 2020, but was abandoned after 10 weeks due to the coronavirus pandemic, and did not recommence until spring 2022.
Mr Denton, now 64, was convicted in the first trial in relation to two frauds valued at £25m.
Mr Oakley, now 57, a former financial adviser based in Cheshire, had been found not guilty on one charge and the jury could not decide on a verdict for another. He was retried this January.
The court heard Mr Oakley was the “architect” of the original Ponzi scheme with Mr Denton and was found guilty of fraud and sentenced to eight years’ imprisonment.
DI Janine Mitchell, head of economic crime at North Yorkshire Police, said: “The frauds investigated as part of this operation didn’t just target wealthy investors. Some of the victims were elderly and vulnerable, and others were working people like plumbers, carpet fitters, postal employees and even a retired police officer.”
Locke Lord and its insurer had to pay out millions of pounds to settle claims brought by investors.
In 2022, a veteran solicitor who provided banking facilities through his client account for one of Mr Denton’s schemes, promising investors a 1,000% return, was fined by the Solicitors Disciplinary Tribunal.
There was no suggestion that Michael Vaughan knew of or participated in the fraudulent scheme.
Legal Futures, in association with the SRA, is holding a free webinar on 22 May on whether solicitors should continue to hold client money.
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