A U.K. man who ran a Ponzi scheme that targeted investors on Facebook has been sentenced to prison after being convicted for fraud and regulatory violations.
The Financial Conduct Authority (FCA) alleged that the Imperial Investment Fund — which was run by Daniel Pugh — targeted investors on social media, fraudulently promising investors “impossibly high returns” from trading their money.
However, the regulator said that the fund was actually a Ponzi scheme that took £1.3 million from investors, and that Pugh also diverted some of investors’ money to support his lifestyle.
“Pugh made outlandish claims to hook in victims but in reality this was nothing more than a massive fraud,” said Steve Smart, executive director of enforcement and market oversight at the FCA, in a release.
“People’s online personas are often at odds with reality, as was the case with Pugh. Claims that sound too good to be true are usually just that,” he added.
Now, following a prosecution by the FCA, Pugh has been convicted of conspiracy to defraud, and sentenced to seven and a half years in prison.
He was also sentenced to 24 months for two charges of carrying on regulated activity without authorization and 12 months for inducing investors without registration. Those sentences are to be served concurrently. After he is released from custody, Pugh is banned for another eight years from being a corporate director.
Additionally, the FCA said that it is pursuing disgorgement proceedings against Pugh.