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Ponzi scheme creator pleads guilty

23 Mawrth, 2015 | Eitemau newyddion

David Gerald Dixon, the creator of a Ponzi scheme that inflicted millions of pounds worth of losses on investors, today pleaded guilty to five fraud related offences at Southwark Crown Court following a joint investigation by the Serious Fraud Office and Hampshire Police.

Mr Dixon created the scheme through two companies known as Arboretum Sports (USA) Incorporated and Arboretum Sports (UK) Limited. Through those companies, collectively referred to as ‘Arboretum Sports’, victims were induced into placing money into what they were told was a no-risk gambling syndicate with the potential for dramatic rates of return. In reality, the scheme was a dishonest vehicle for Mr Dixon to appropriate the funds of its members.

Arboretum Sports (UK) Ltd went into liquidation in 2007, and shortly thereafter Mr Dixon fled to Malaysia. He was arrested by the Royal Malaysian Police in September 2014 and extradited to the UK.

Commenting on the case, the SFO’s General Counsel Alun Milford said: “By entering a guilty plea, Mr Dixon recognised the strength of the case that the SFO and our colleagues in Hampshire Police had built against him.”

Mr Dixon was charged with 13 offences in September 2014. Following his guilty pleas, it was decided that the remaining counts should lie on the file.

Mr Dixon will be sentenced at Southwark Crown Court on 22 April 2015. Confiscation matters will be determined at a future hearing.

Notes to editors

1. The press release issued when Mr Dixon was charged can be found here.

2. The SFO, together with Hampshire Police’s Serious and Organised Crime Group, announced an investigation into Arboretum Sports in February 2011.

3. David Gerald Dixon, formerly of Basingstoke, is 49 years of age.

4. Mr Dixon pleaded guilty to counts 2, 4, 6, 8 and 9 of the indictment. They are as follows:

  • Count 2: Dishonestly concealing a material fact, contrary to section 397(1) and (2) of the Financial Services and Markets Act 2000;
  • Counts 4, 6, and 8: Making a statement, promise or forecast known to be materially misleading, false or deceptive, contrary to section 397(1) and (2) of the Financial Services and Markets Act 2000;
  • Count 9: Fraud by false representation, contrary to section 1(1) and section (2) of the Fraud Act 2006

5. The fraud comprised three linked but separate elements. First, the principal ‘investment’ offered by Mr Dixon, in which all the victims partook, was sold as an arbitrage betting syndicate. Every member who signed up to Arboretum Sports opened a betting account and deposited into it a sum (or sums) in cash, believing that their money would fund risk-free gambling. Second, and in addition, many of the victims were also persuaded to pay four-figure sums in purported purchase of shares or share options, either in Arboretum Sports (USA) Inc or in supposedly-linked entities such as MGM Resorts International, the famous casino operator based in Las Vegas, USA. Third, and finally, a smaller number of members fell victim to an advanced fee fraud, through which Dixon obtained a total of £174,000 by requesting contributions towards the costs of releasing and repatriating investors’ funds which he claimed had been frozen or seized abroad.

6. The extradition from Malaysia to the UK marks the first of its kind. Both the SFO and Hampshire Police are grateful to the Royal Malaysian Police and the Attorney General’s Chambers in Malaysia for facilitating the request.

7. Mr Dixon has one previous conviction for five offences of obtaining by deception more than £1 million from several victims between 1988 and 1997 when he was acting as an Independent Financial Adviser. He was sentenced on 21st August 1998 by Winchester Crown Court to four-and-a-half years’ imprisonment in respect of those offences.