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Jail for fraudster who stole thousands from elderly

31/ 3/2008

A FINANCIAL advisor who stole more than £500,000 from his clients to fund his ailing business has been jailed for three-and-a-half years.

David Ellingworth, aged 41, of Hollybank, Droylsden, pleaded guilty to 10 counts of obtaining cash by deception when he appeared before Minshull Street Crown Court. He asked for a further offence to be taken into consideration.

He was today, (31 March), sentenced to three-and-a-half years for each count to run concurrently. The judge also ruled Ellingworth cannot be a director for 10 years.

Between 1997 and 2006, Ellingworth took more than £500,000 from his clients, a number of whom were elderly and in need of care, under the pretence that it was being invested in property in their names.

In fact, he did not buy any property and was using the money to pay off his own debts.

In the mid-90s, Ellingworth set up a company called Effective Financial Planning. The business was in trouble and Ellingworth struggled to pay staff, rent on properties and other overheads.

In 1996-1997, Ellingworth set up a second company called Rent With Us, which claimed it would buy property in the investor's name and rent it out on their behalf. The theory was that the investors would see their investment grow as the equity in the property grew as well as the rental income.

The people who initially invested in Rent With Us were all existing customers of Effective Financial Planning and trusted Ellingworth.

He persuaded them to cash in perfectly good investments and invest in his scheme, claiming it would fund their retirements, but all the time he was intending to use the cash to bail out Effective Financial Planning.

Eleven people invested large sums of money with Ellingworth and each year he would write to them informing them how well their investment was doing. This continued over a number of years and Ellingworth took a total of £526,000 from his unsuspecting victims.

However, suspicions about him grew and he was reported to the Financial Services Authority.

On 19 January 2007, Ellingworth was arrested and admitted he had taken the money with the intention of investing it in his other business. He further admitted that for up to seven years, he had not bought any property and the letters sent out to his clients were complete lies.

Ellingworth said it was his intention to use the money to turn his companies around and then pay his investors back, but conceded in interview there was not enough cash left to do so.

Detective Sergeant David Loughlin, of Tameside CID, said: "The majority of Ellingworth's victims were saving for their retirement. Unfortunately, they were duped and invested in a scheme that has left them out of pocket and understandably very angry.

"Ellingworth was a financial advisor - a position of trust he completely abused in order to pay his own debts. He treated the money given to him in good faith by innocent investors as his own, depriving his victims of money they should be using to enjoy their retirement.

"His web of deceit was finally spun far and wide, pretending to have bought non-existent properties, drawing up false contracts and lying to his investors.

"I can only hope today's sentence gives his victims some semblance of justice for what they have lost."    

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