Members of a betting syndicate who appear to have lost tens of millions in savings believe they are the victims of a 'Ponzi' scheme set up by a former Kent police officer.
Mike Stanley, who closed his Layezy Racing betting syndicate and racing owners club this month, filed for bankruptcy on Monday in the latest devastating blow to investors.
Duff and Phelps, the insolvency experts appointed by the 62-year-old, said in a statement on Monday night: 'Following an analysis of the syndicate's financial position, Michael Stanley, the operator of the syndicate, has taken the decision to file for bankruptcy.
'The Bankruptcy Order was made earlier today and we are liaising with the Official Receiver regarding the next steps. We have advised the Insolvency Service of the urgency of the situation, so the process of agreeing investor claims and ultimately distributing funds to investors can start as soon as possible. We are unable to discuss potential returns to investors yet.'
revealed last month that millions being paid into the syndicate was being spent on buying horses by Stanley rather than to place bets.
The 5,000 members of the syndicate have been told to contact Duff and Phelps with details of how much they invested.
In some cases, people put in more than £500,000 in the belief Stanley's system for placing bets was doubling and sometimes even trebling their investments.
Now members fear most of their money has been lost in what, they say, Duff and Phelps have told them was a 'Ponzi' scheme — one which pays profits to earlier investors with funds obtained from more recent investors.
One Layezy member, who is believed to be among those who have invested vast sums in the syndicate, said Duff and Phelps had told him that, while calculations are still being made, the shortfall could be as much as £70million.