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Investors lose millions in Lancashire 'Ponzi' scam
A businessman has told how he lost £3.5m in a multi-million pound fraud which has cost people across Lancashire hundreds of millions of pounds.
It is believed he is one of up to 1,000 people, including hundreds in Preston, who have lost up to 200m in an alleged 'Ponzi' scam.
The Evening Post has been contacted by a string of members of the city's Asian community with some saying they faced losing their homes in the sting.
Police have confirmed they are looking into "a number" of complaints they have received from victims in Preston about a "complex fraud."
The Financial Services Authority (FSA) is also believed to be looking into a foreign exchange broker which people made cheques out too when investing in the scheme.
The wealthy businessman, who asked not to be named, admitted he had written off 3.5 million he had invested in the scheme: "It has come to the point for some people where they have just written it off, you have to otherwise you will just go crazy.
"But, there are other people who still have faith, they still believe they will get their money back, it is blind faith, verging on stupidity.
"People are ashamed, they have invested this money and got caught out and they feel dirty, I know it has affected families all over, not just Preston but Lancashire and beyond."
>> Families sucked into 200m 'Ponzi' scam
The alleged 'Ponzi', 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.
The scheme offers lucrative returns to entice new investors thus creating an ever-increasing flow of cash to keep the scheme going.
A woman, who lives in the Fulwood area of the city, said her taxi driver father had lost nearly 100,000 in the scam.
She said: "That was all the money he had saved up over the years.
"He is a proud man, he does not want to go to the police because he is is too ashamed of what has happened. But my father is not alone."
A Lancashire Police spokesman confirmed they had been approached by a number of victims of the fraud.
She said: "Police in Preston have received a number of complaints from potential victims of a complex fraud and the full extent of this fraud is under investigation."
A spokesman for the FSA said she could "not confirm or deny" any investigation.
She said: "If a company is not regulated by the FSA, there is no protection and potential compensation, so we would advise anyone to check the register on our website www.fsa.gov.uk."
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Weather for Preston
Wednesday 08 February 2012
Today
Sunny spells
Temperature: -3 C to 3 C
Wind Speed: 18 mph
Wind direction: South east
Tomorrow
Light sleet
Temperature: 3 C to 3 C
Wind Speed: 10 mph
Wind direction: South east
