Conman dupes families out of £177k in pyramid scheme

SIX families were duped out of a total of £177,750 after falling victim to a pyramid investment scheme.

The victims paid the cash to David Bailey over nine years, after being promised returns of up to 17 per cent on their money.

But they never saw their cash again after Bailey fled his Stoke-on-Trent home and moved to the Isle of Man.

Now Bailey has admitted 21 counts of theft between 1997 and 2006 and been jailed for two-and-a-half years.

His victims included:

Court welfare officer Patricia Graham, who had to go to Bailey's house after he was convicted of drink-driving. She ended up investing £24,000 between 2001 and 2004.

Friends of more than 20 years, Christopher and Pamela Digiacomo, who ploughed in £75,500.

Mr Digiacomo's brother-in-law, Michael Bamford, and wife Janet, who invested £27,750.

Stoke-on-Trent Crown Court heard Bailey wanted investment in the Competitive Finance business, which he had started legitimately in the early 1990s.

Bailey told victims their investments were secured against a large portfolio of homes he owned in Stoke-on-Trent.

The court heard the investors initially saw their promised returns and were encouraged to place even larger sums with the 56-year-old.

But Bailey was drip-feeding the investors their own money back, or using funds from subsequent investors.

Two of the victims live in Stoke-on-Trent, with the rest in Newcastle, Market Drayton, Spain and the Isle of Man.

Robert Price, prosecuting yesterday, said: "By July 2006, resources had run out and the business collapsed.

"One investor had asked for the return of a large capital investment and Bailey was reluctant to co-operate.

"He said he no longer worked for Competitive Finance.

"He washed his hands of the business and all the mess then flowed from it."

It emerged there was little money in the business's bank account to return to investors and the properties used to secure the cash actually belonged to Bailey's mother.

Bailey was arrested in December 2006, by which time he was living in Howe Road, Onchan, in the Isle of Man,

Police discovered he was not authorised or regulated by the Financial Services Authority and the illegally-obtained investment deposits had been paid into accounts he held.

The court heard Bailey had paid £19,000 for a girlfriend's heart operation and bought her a Rolls-Royce and caravan.

Peter McCartney, defending, said: "It has been a trying time for Bailey and this has been hanging over his head for a couple of years.

"The company was trading very well and Bailey was taking a good living from it, but a combination of circumstances brought the pyramid down.

"He walked away from it. Plainly, it all got too much for him."

Judge Robert Trevor-Jones said: "You enticed investors' money at attractive rates of interest.

"You stole money given to you by unsuspecting individuals you had befriended. You gained their confidence through assurances as to the return of their money and exploited this.

"When the business fell apart, many investors faced financial hardship and even ruin, but you just walked away."

Detective Constable Mick Ganley, of Staffordshire Police's economic crime unit, said: "We will explore every opportunity to trace and deprive Bailey of the proceeds of these crimes to seek compensation for the victims."