Southwark Crown Court issues 5-year prison sentence to Mark Starling over investment fraud

Maria Nikolova

Starling defrauded investors of nearly £3 million in relation to unauthorised investment schemes he operated between 2008 and 2017.

The UK Financial Conduct Authority (FCA) has marked a victory in fighting investment scams, as Mark Barry Starling was today sentenced at Southwark Crown Court to 5 years of imprisonment.

Starling defrauded investors of nearly £3 million in relation to unauthorised investment schemes he operated between 2008 and 2017. During this 9-year period, Starling purported to run investment funds and obtained investment monies from his friends and acquaintances. They entrusted him with just under £3 million of their money.

In sentencing, HHJ Bartle QC said that Starling had defrauded investors in an ‘appalling way’. The Judge said that ‘not one word of what [Mr Starling told investors] was true’ and characterized Starling’s claims to his victims as ‘a pack of lies’.

Starling purported to be running three funds, the ‘Pilot Dax Fund’, the ‘Shadow Dax Fund’ and the ‘Pilot Eurostoxx Fund’, and claimed he was a ‘proprietary futures trader’. He traded meager £8,000 of the £3 million invested with him, on which he made a loss of £2,450, yet managed to spend over £1 million maintaining his own lifestyle.

Starling now and then paid money back to his investors on request to keep the illusion of running a successful investment business. In reality, however, these payments were just funded from other victims’ investment money – a typical feature of a pyramid scheme.

In order to cover up his deception and prolong the fraud, Starling also forged documents and correspondence purporting to be from brokerages, and bank statements. He also registered web domain names and created email addresses in names similar to a legitimate brokerage, and for an entirely fictitious brokerage. The Judge noted that the forgeries were ‘sophisticated’ and the whole scheme demonstrated the way that Starling had ‘abused a position of trust’.

Starling was never authorised by the FCA to carry out any regulated activity.

A total of 24 investors are found to have invested money into the funds, of whom 17 lost a total of around £1.8 million. At the hearing, the FCA commenced confiscation proceedings against Starling, and it is expected that the victims will get some limited compensation from funds restrained by the FCA in April 2017.

Starling received a sentence of 5 years imprisonment for an offence of Fraud by False Representation under Section 1 of the Fraud Act 2006 and a concurrent sentence of 12 months imprisonment for Breach of the General Prohibition under S19 of the Financial Services and Markets Act 2000 in that he operated a collective investment scheme without being FCA authorised or exempt.

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