Syed Rahman outlines the case, the issues involved and the likelihood of more such prosecutions
Jail terms totalling almost 12 years have been imposed on two men for their involvement in a £1.5 million crypto investment scam that ran for over two years.
At London’s Southwark Crown Court, Judge Martin Griffith sentenced Raymondip Bedi, 35, and 40-year-old Patrick Mavanga for conspiring to defraud 65 investors between February 2017 and June 2019.
Saying he was sure the men played leading roles in the fraud conspiracy, he sentenced Bedi to five years and four months and Mavanga to six and a half years. Bedi’s wife Rowena was acquitted of money laundering relating to the case.
Bedi, of Bromley, London, had pleaded guilty to conspiracy to defraud, conspiracy to breach the general prohibition under the Financial Services and Markets Act 2000 (FSMA) and money laundering offences. Mavanga, of Peckham, London, had pleaded guilty to conspiracy to defraud, conspiracy to breach the general prohibition under the FSMA and possession of false identification documents with an improper intention.
Cold calls
The Financial Conduct Authority (FCA), which brought the case, said that the two men worked through a group that would cold call people. The cold calls would involve them directing potential victims to a website containing offers of high returns on cryptocurrency. But the offers were fake.
The FCA charged Bedi and Mavanga in April 2023. It accused them of using bogus investment schemes with both companies they operated and unauthorised clones of two other investment firms.
Mavanga was also convicted of perverting the course of justice, after a trial at Southwark. He had deleted phone call recordings following Bedi's arrest.
Penalties
For context, section 19 of the FSMA - which is the general prohibition - states that a person cannot carry on a regulated activity in the UK unless they are authorised by the FCA or exempt from this. Violation of section 19 carries a maximum penalty of two years’ imprisonment and an unlimited fine. Money laundering under the Proceeds of Crime Act 2002 is a criminal offence punishable by up to 14 years’ imprisonment. Conspiracy to defraud under the Fraud Act 2006 and Criminal Law Act 1977 carries a maximum penalty of 10 years’ imprisonment.
In 2023/24, the FCA secured nine successful fraud prosecutions under these various pieces of legislation and charged 21 individuals with financial crime offences - the highest number of such charges in any single year. Bedi and Mavanga’s criminal convictions can be viewed as part of the FCA’s crackdown against financial criminals. Yet while we are likely to see more successful FCA prosecutions in the future, those who fall victims to such illegal activities face the challenge of tracing and recovering their lost funds.
Crypto investment fraud may be the latest incarnation of fraud, but it poses the same difficulties as the more traditional forms of the crime. Exercising caution and seeking fraud prevention advice may go some way to reducing the number of crypto fraud victims. But, for now at least, crypto will continue to be viewed as a vital tool by those looking to make fraudulent gains.
