Fraud victims asked to help watchdog probe
People caught up in an alleged multi-million pound Ponzi-style scam have been asked to hand over details to the financial watchdog.
Victims of the fraud, which is thought to have affected up to 100 members of Preston's Asian community, have received letters from the Financial Services Authority (FSA) asking them about investments.
It is understood the letters relate to an international money transfer firm used to exchange cash into the 200m fund.
One victim, who has written off 3.5m he put into the scheme, said many people stung by the scam had given up on ever seeing their money.
He said: "There are people who have remortgaged their homes to invest in here, they know now that what they were doing was driven by greed but it has torn them apart. Many people have given up on ever seeing their money again and are just starting over again from scratch.
"The police have been looking into this and now the FSA, everyone is just hoping something will come of it but no-one is holding their breath."
A Fulwood woman, whose taxi driver father had lost nearly 100,000 in the scam, said she hoped an investigation into the money transfer business would bring new hope to victims.
She said: "Everyone's fear is that there will be no trail and the money has just disappeared, we are starting again from scratch."
The alleged scam, which has spawned smaller schemes in specific parts of the city, started in 2005 with people being offered up to 40% returns on their money and has continued with other schemes over the last four years.
A 'Ponzi' scheme is a fraudulent investment whereby the operator pays big returns to investors out of their own pockets rather than from actual profit.
It offers lucrative returns to entice new investors thus creating an ever-increasing flow of cash to keep the scheme going.
An FSA spokesman said she could "not confirm or deny" an investigation had taken place but urged people to check out any company before making an investment.
She said it was "not unusual" for people to contact the regulator with concerns about such investment schemes.
The spokesman said: "We would never discuss whether or not we are investigating any particular case.
"However, if a consumer is concerned about a particular company or is offered an investment they should checked whether they are registered with the FSA.
"If they are not, the consumer will have no protection if they are a victim of fraud."
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Weather for Preston
Thursday 29 July 2010
Today
Cloudy
Temperature: 15 C to 17 C
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