Freddy David jailed for six years after pleading guilty to £14m fraud
Breaking NewsWealth manager jailed

Freddy David jailed for six years after pleading guilty to £14m fraud

Former managing director of Hertfordshire-based HBFS admits multi-million pound fraud

Jenni Frazer is a freelance journalist

Freddy David
Freddy David

Freddy David, the disgraced managing director of the now defunct HBFS wealth management company, was sentenced to six years in prison for fraud on Monday. But furious victims of his Ponzi scheme, members of the Jewish community in Borehamwood, Elstree, Wembley and elsewhere, left Southwark Crown Court insisting that the jail term was “not long enough”.

David’s scheme, in which he created a fake investment product in “an imaginary Bank of Scotland account”, netted him over £14.5 million in a period of more than 10 years. He used the money to fund a decade-long gambling habit, during which he made more than 10,000 on-line transactions.

He also put the money he stole into investing in the “Let’s Meat” restaurant in Borehamwood, in school fees for his three children, and in holidays in Israel.

Prosecutor Jonathan Polnay, outlining the case for Mrs Justice Taylor, said that after a successful career at Barclays Bank, David had become the managing director of HBFS, a “bespoke wealth management and financial advisory firm”. It was regulated by the Financial Conduct Authority. David owned 75 per cent of the company shares while his wife, Hannah David, owned the remaining 25 per cent.

But to fund his gambling addiction — for which he did not seek treatment during the period of his fraud — David created “an investment product which did not exist”. He generated forged documents, said Mr Polnay, and when in the closing months of his fraud, the net appeared to be closing, he paid back some investors with funds from newer investors.

The majority of the victims were known personally to David, who frequently visited his targets in their homes. Many of the 55 victims were elderly or disabled: he defrauded them of a total of £14.5 million, much of which represented people’s life savings.

In November 2017 the FCA began investigating HBFS, at which point David transferred £175,000 of the stolen money into his mother’s account. He also, the court was told, attempted to sell HBFS, which was eventually liquidated in March 2018.

He was arrested and interviewed twice, but claimed to know nothing of the fraud. At the same time he told anxious investors that their money was safe.

But in February 2018, David went to a police station and gave a very different account, confessing to the fraud and producing a list of 48 people whose money he had taken.

Bizarrely, at the same time as he was carrying out his swindle, David continued to run the rest of the HBFS business legitimately. Analysis before his court appearance showed that only five per cent of the company’s funds and activities were fraudulent.

Five of David’s victims, all Jewish, gave statements in court. One man, Leon Winsky, of Wembley, had invested £300,000 with David, his life savings after 52 years of hard work. But, he said, “He has destroyed my family. We have been left penniless and I thought about committing suicide. I was going to jump in front of a train but I wanted to face Freddy David in court”.

The family was down to two meals a day and wore coats indoors during cold weather because they could not afford high electricity bills. Worst of all, Mr Winsky said, was the collapse of plans to provide housing for his special needs son, Jonathan.

Shiri Koren gave an emotional victim statement on behalf of her parents Asher and Tova, together with her two sisters. Though David’s defence lawyer, Andrew Trollope, said the fraud had largely stopped by 2016, the Korens’ investment in the fake scheme took place in 2017.

Ms Koren said: “He has turned our lives into a living nightmare”. Calling David “devious, arrogant and cunning”, she said that her father had repeatedly asked him if he could take his money out of the investment, but that David had advised him to leave the money where it was.

She told the Jewish News that she knew of at least one victim in Israel who had been forced to leave his old age home as he could no longer pay the fees.

And Ms Koren was at her angriest when David’s defence lawyer, alluding to his client’s previous good character, referred to a number of people who had given character witness on his behalf, including two rabbis. Judge Taylor intervened and asked Mr Trollope whether any of those who had spoken up for David had invested with him. “No, my Lady”, she was told.

But Ms Koren claimed that not only had rabbis spoken up for him but that as recently as last Shabbat he had been called up in shul — which she called “disgraceful”.

Auriol Waters, 82, said David “has not only stolen our money, but our peace of mind”, while her husband Sam called him “the most despicable human being I have ever met”. Their trust had been utterly betrayed, they said.

Mr Trollope, defending, said David had shown shame and remorse. In his third interview with the police he had said he was “Public Enemy Number One in the Jewish community, and deservedly so. I have very few friends left”.

He pleaded guilty to two counts of fraud and deception and was sentenced to four and six years, to run concurrently. But David, who wore a kippah in court, is likely to serve only half that time and to be released on licence thereafter.

Two subsequent hearings, of confiscation of David’s assets, and compensation for the victims, which will be paid out of those assets, will take place later in the year.

Detective Inspector Mark Forster, who led the investigation on behalf of City of London police, said that the fraud was “a crime which we were able to stop in its tracks”.  He said that when police began their inquiries they were surprised at how long David had been carrying out his fraud — “and how long it went undetected”.

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