Betting scheme owner pulled up over missing £39m
25 Sep 2020
The owner of a horse racing betting syndicate who misappropriated more than £39m via a sham scheme has seen his bankruptcy restrictions extended by 14 years
25 Sep 2020
Michael Stanley, from Maidstone, operated Layezy Betting Syndicate for nine years between January 2010 and February 2019.
This started out as a hobby and the syndicate’s original members were family and friends, with the scheme betting on their behalf and earning profits on horses identified by Stanley’s system.
In 2012, the scheme expanded to accept more members beyond just family and friends and over the syndicate’s lifespan, received at least £40.3m from more than 6,000 members.
The syndicate used at least £1m to place bets. Of the remaining £39m, Stanley used £27.4m to make payments to members so it would appear they were earning profits on the syndicate’s success.
These payments, however, did not represent winnings but were made up of payments received by new members.
Members were unaware of the deception as they received false information regarding their positions, despite Stanley operating a portal allowing members to view their accounts and deposits were performing.
Stanley used various bank accounts he had set-up to collect syndicate members’ money to purchase 23 horses totalling £1.6m. He also caused the syndicate to make payments totalling at least £780,000 to third parties.
The syndicate suddenly closed in February 2019 following reports in the media and Stanley’s misconduct was uncovered by the Official Receiver after he applied for his own bankruptcy.
Creditors in Stanley’s bankruptcy have made claims which total £53.4m in respect of monies they have paid over to the syndicate, and £158.7m on a reported profit basis.
Due to the size of Stanley’s debts and the risk he posed to creditors, the Official Receiver applied to increase the period of his bankruptcy restrictions.
Deputy Official Receiver Barry Gould said: ‘Throughout the syndicate’s existence, Michael Stanley acted in a duplicitous manner. For nearly a decade, he duped his members into thinking they were making profits on their bets but in reality, the money received was secured from new members joining the syndicate and not on the scheme’s success.
‘The court recognised the severity of Michael Stanley’s misconduct and he will now have to comply with 14 more years of bankruptcy restrictions, which will not only severely curtail his activities but also protect members of the public and lenders in the future.’
Philip Duffy and Allan Graham of Duff and Phelps have been appointed as Stanley’s trustees in bankruptcy. People who have invested in the Layezy Racing Owners Club should contact the trustees via Layezyinvestors@duffandphelps.com to register as a creditor.