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7 May 2014, 11:59 | Updated: 7 May 2014, 13:10
39-year-old Nicholas Ford was sentenced to five years and four months in prison after pleading guilty to fraud by false accounting.
Nicholas Peter Ford used a technique known as a 'Ponzi' scheme, where he took money from investors as part of a spread betting syndicate but then paid them back using money given to him by other investors rather than any profit he had made, according to Sussex Police.
The 39-year-old frittered much of the money away through gambling, which started just two days after the first investment was made, a force spokesman said.
Ford, who had different addresses in the UK and Switzerland, was using a family address in Chichester, West Sussex, when he was first reported to the police.
He started the scam after being made redundant from his job at an investment company in Surrey, police said. Detective Sergeant Sally Smith said Ford's previous employers innocently helped him to compile his client list and their image suffered severe damage as a result of his crimes. She said:
"This was what is known as a Ponzi-style fraud.
"In essence, Ford took in £1.3 million from private investors, and paid out just £245,000.
"The money paid out was just to lure investors back into making even more investments.
"The majority, if not all the money, was lost in gambling, and he actually started gambling with investments two days after the first investment was made."
Det Sgt Smith said the 18 sets of victims came from across the UK although none was living in Sussex. She said:
"He received investments from professional investors, including one lady who lost her £20,000 life savings, and also brings up her disabled child as a one-parent family. Ford was supposed to be her friend."
Ford, of Schubertstrasse, Zurich, appeared at Chichester Crown Court on May 1, and pleaded guilty to fraud by false accounting between 2010 and 2011, and was jailed for five years and four months, police said.
A case for confiscation of any remaining assets Ford might still have is being prepared by Sussex Police under the Proceeds of Crime Act (POCA) and that hearing will take place at the same court on July 15.