Yorkshire currency trader arrested in 'Ponzi' probe

A Yorkshire currency trader who was allowed to walk out of a police station four months ago has been arrested as part of an investigation into a suspected ponzi fraud that allegedly cost hundreds of investors tens of millions of pounds.

The 60-year-old man - who the Financial Times understands to be Joe Lewis, who used to own and run JL Trading - is being held in an East Yorkshire police station on suspicion of fraud by false representation and money laundering.

Mr Lewis reported the case, which he claimed to be a fraud against him, to Humberside police in December. However, he was allowed to walk away because the case was still being assessed.

The City of London police, who took over the investigation early this year as its scale increased, said on Wednesday that 375 people from around the world - including 33 from Thailand and 17 from Australia - had filed complaints in connection with the "suspected global Ponzi scheme".

One consortium had handed over £4m and one individual £830,000 into the scheme, the police said. One man, who told the Financial Times he had invested £750,000, said the case had caused him to lose his job, almost lose his house and triggered a heart attack on account of the stress.

"It's an interesting development, but there are a lot of people with a lot of questions to answer," he said.

Another investor said he was "delighted" by the arrest.

JL Trading was based in Istanbul and claimed to trade in currencies and property. It ceased operations in early December shortly after claiming that it was owed $260m by a US broker while it owed its clients $179m in 893 accounts worldwide.

On December 3, Mr Lewis said in an email to clients that he regrets "some of the things I have done". "Please note I have covered up my mistakes from everyone including my staff; no one else knew what was happening," he said.

One day later, Mr Lewis went to a Humberside police station to discuss the alleged fraud but was allowed to leave because the case was still being assessed.

Ponzi schemes typically offer investors high and regular returns on their initial investment and bonuses if they help persuade other people to join the scheme. In reality their money is usually being spent paying back early investors, covering business costs and funding big spending on luxury items by those running the ponzi.

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