Leeds-based finance firm boss Francis Wainwright has been sentenced to seven years in prison after admitting running a £20m Ponzi scheme which cheated elderly and vulnerable investors.

The 61-year-old falsified documents to mislead investors, spending their money on ventures including a racehorse syndicate and his own failed private businesses.

Investors who were persuaded to invest in the business were victims of a classic Ponzi scheme, whereby the returns paid to them were funded by the capital injections from later investors, Leeds Crown Court heard. 

The court heard that Mr Wainwright had lied about the company’s accounts and the destination of funds in order to elicit £100,000 from one investor only weeks before the business collapsed, in the full knowledge that the investor would not get their money back.

The investigation and prosecution was led by the government's Insolvency Service.

Mr Wainwright had been a director of Rawdon Asset Finance Ltd, a company incorporated in 2009 which provided finance to small and medium businesses unable to secure funding. He encouraged smaller investors to put money into his business to fund its services.

He was disqualified for 11 years in November 2020 after the Insolvency Service found he had falsified around £12m worth of entries in the company’s loan book in the two years before the company entered administration in 2019.

After a further criminal investigation, the Insolvency Service brought the director to court on counts of false accounting, fraud, forgery, and acting as a director while bankrupt.

Julie Barnes, chief investigator for the Insolvency Service, said: “Liam Wainwright’s greed and selfish actions had a devastating effect on the people who had put their trust in him and his business. His victims included elderly and vulnerable people. Many investors lost most or all of the money they had entrusted to him, and some lost their life savings.”

The court heard that Mr Wainwright had enjoyed a lavish lifestyle as a result of his offending, and that his actions had had a devastating impact on individuals and families who had invested money into the business.

Mr Wainwright told investors and shareholders that Rawdon Asset Finance was lending money to businesses with security on property, land or plant and equipment, but it was in fact using the cash to pay returns to other creditors, buy into a racehorse syndicate and to fund other companies, including a Lincolnshire-based property development and a redevelopment company in West Yorkshire, both linked to himself.

By the time the company went into liquidation, Rawdon Asset Finance’s creditors were owed more than £20m. Liquidators have so far recovered £750,630.

Mr Wainwright admitted that he began to falsify accounts from around 2017, to hide the company’s true financial position from his co-directors and investors. He also admitted he had earlier forged a mortgagor’s signature on a legal charge to mislead investors and had – between April 2010 and April 2011 – breached the terms of a previous bankruptcy by acting as a director of the company without the court’s permission.

Mr Wainwright pleaded guilty on 20 February at Kirklees Magistrates’ Court, and was sentenced at Leeds Crown Court by Judge Bayliss on 9 June.

The Judge passed concurrent sentences for all charges, except for the sentence for fraud against the final investor, which was added consecutively to reflect an escalation in Mr Wainwright’s culpability.

The following sentences were imposed, with reductions reflecting a credit for the plea:

False accounting - 6 years 6 months, reduced to 4 years 4 months.

Forgery - 2 years after trial, reduced to 16 months, concurrent.

Breach of Director Disqualification - 12 months after trial, reduced to 8 months, concurrent.

Failing to Surrender offence under Bail Act - 28 days, concurrent.

Fraud - 4 years after trial, reduced to 2 years 8 months, consecutive.

Mr Wainwright remains disqualified as a director.