GBP 27 MILLION ARBITRAGE SPORTS BETTING SCHEME COLLAPSES
Over a thousand investors could be prejudiced by failure of The Winning Express.
A UK-based GBP 27 million arbitrage sports betting scheme, The Winning Express, has collapsed, leaving a thousand investors with concerns that their money is lost, according to a BBC report over the weekend.
And, according to the report, the venture was flagged as a potential danger to the authorities who allegedly did little to halt its progress.
Founded in 2011 and allegedly run by the since deceased Graham Bradbury, 69, who had previously been banned from being a company director for running a pyramid scheme, the scheme suggested to investors that it guaranteed 2 percent tax-free interest per month through placing "sporting arbitrage" bets.
The scheme was widely advertised and promoted through social media to attract participants, and recruiters were rewarded with commissions, a practice that observers point out smacks of a pyramid investment structure.
Sporting arbitrage involves placing bets on different outcomes in an event with various bookmakers, exploiting the diverse odds offered by the bookies.
BBC investigators found that 1,068 clients were on The Winning Express books, some of them having invested six-figure amounts. The total listing indicates that just over GBP 27 million in total was at risk and another GBP 2.1 million in a fund purportedly to invest in thoroughbred horses.
Investors started to express concerns last year when payments became erratic, and that was followed three months ago when the enterprise stopped operating, and investors banded together to launch litigation.
Although investors claimed to the BBC that Bradbury was running The Winning Express, he had a dubious past and should not have been doing so; the broadcaster reports that he was made bankrupt in 2013 over the Cherries pyramid scheme which lost half a million pounds in investor money, and that following that the Insolvency Service prohibited him from promoting, operating or managing a company for 12 years unless it was with the court's permission.
Investigators discovered that TWE was operated through a Seychelles company with anonymous directors titled Milton Express, which in turn operated in Britain through a third party company located in Sheffield.
TWE was allegedly reported to the Financial Conduct Authority as early as 2014, the Serious Frauds Office in early January 2015 and Action Fraud in mid-2015. The enterprise was reportedly also "on the radar" of the UK Gambling Commission.
Despite this, a formal investigation was only launched by the South Yorkshire Police three months ago, but classed as international and therefore outside its jurisdiction.
A spokesman told the BBC: "The force is exploring which agency is the most appropriate to carry out such a complex and prolonged investigation."