Daniel Pugh has been sentenced to seven years and six months in prison for operating a £1.3 million Ponzi scheme, following a prosecution by the Financial Conduct Authority (FCA).

Daniel Pugh, 35, ran a Ponzi scheme from his bedroom in Devon with another individual. The operation, called the Imperial Investment Fund (IIF), collected more than £1 million from 238 investors. Most of the victims were reached through Facebook adverts that promised unrealistically high returns — 1.4% per day, 7% per week, or 350% per year.

Pugh personally received about £96,000 from the scheme, which he used for personal spending, including designer clothes, restaurant bills, and cash withdrawals totaling £18,000.

The promised investment returns never materialised. Pugh misled investors into believing that their funds were being successfully traded and were secure. Even after realising that the scheme was collapsing, he continued to seek new investors.

Steve Smart, the FCA’s Executive Director of Enforcement and Market Oversight, said:

“Pugh made exaggerated claims to attract victims, but this was simply a large-scale fraud. Tackling financial crime is a key FCA priority. We will act to ensure offenders face consequences and are stripped of their illegal profits.

People’s online images can be misleading, as shown in this case. If an investment offer sounds too good to be true, it usually is. Always check the FCA Firm Checker before investing.”

When sentencing, His Honour Judge Weekes said that Pugh had committed “persistent and knowing breaches of the regulatory framework” and that any remorse came “woefully late.” The judge also noted that victims had suffered not only financial losses but also embarrassment.

The FCA is pursuing confiscation proceedings to recover the proceeds of Pugh’s crimes and compensate victims. Pugh has also been banned from serving as a company director for eight years, starting from his release from prison.

Another individual involved in the same offences remains wanted.

Over the past six months, the FCA has secured criminal convictions against six individuals for various financial crimes, including money laundering, insider dealing, and fraud.

The FCA reminds consumers that unauthorised investment schemes carry significant risks and often provide little or no protection. Many people only realise their money is at risk once it is too late. Investors are advised to use the FCA Firm Checker to confirm whether a firm is authorised.