‘Ex Charlton star Richard Rufus scammed £15m’

A former Premier League footballer scammed his friends and family out of millions of pounds by promising them incredible returns in a pyramid scheme, a court heard.

Ex-Charlton Athletic defender Richard Rufus, 47, had dupes flocking to invest in the foreign exchange market between May 2007 and April 2012.

He drove a Bentley and lived on an exclusive private estate on the money he was swindling, Southwark Crown Court heard.

Lucy Organ, prosecuting, said: ‘He scammed friends, family and associates out of millions of pounds by pretending he was able to offer a low-risk investment in the foreign exchange market

‘He claimed he had significant success with his strategy in the past.

‘He claimed he could, and did, get massive profits of five per a month which equates to 60 per cent a year.

‘He claimed that investor’s original investments or capital was said and would and could be returned to them within 14 days of them asking.

‘The investments were in fact fraught with risk. Rather than returning the profits they were promised, they lost a great deal of money.

‘Mr Rufus took over £15 million in total. He traded some of it, as I have said, losing vast amounts, but that wasn’t the end of the fraud.

‘Of that money, about £2 million he never even transferred to foreign exchange trading accounts. He used this money partly to prop up the losses that his scams were making.

‘Making payments back to other investors to continue the pretence that they were making a good investment, a so-called “pyramid scheme” and partly simply for his own benefit, treating the money he received from investors as his own.’

Of the £15 million paid by investors to his personal account for trading, only £7 million went into his trading account.

At least £2 million was kept in his personal account with some investments transferred to family members.

Eventually Rufus had his accounts frozen by the Financial Services Agency on 11 February 2011.

‘Even when he stopped trading, he continued to take money from investors who he duped,’ the prosecutor said.

‘That money too was never invested and never went near a trading account. He used this money to either further the fraud by paying investor’s fake profits or simply as his own money.

‘Whilst paying investors fake profits, paying back so called capital, he simply paid his own bills with that money.

‘The promise was that it was a low-risk investment with a foreign trader.

‘We say the whole enterprise was a fraud because despite what he told the investors about this being low risk, this was anything but.

‘His trading was aggressive, it wasn’t low risk, it was a high-risk investment.’

Rufus had told investors he had a successful track record of being a Foreign Exchange trader, but Ms Organ told jurors: ‘He must have known this was untrue because he was losing so much money from his trading.’

Rufus even wrote to investors assuring them that profits were being made.

The former pro made 288 appearances for Charlton, scoring 12 goals.

He was forced to retire from football at the age of 29 after an unsuccessful knee surgery was performed in the United States.

After his retirement in 2004, he began a career in the financial sector.

Ms Organ added: ‘Richard Rufus certainly had the trappings of wealth.

‘Living in a big five-bedroom house on a private estate in Purley, driving a Bentley and wearing a Rolex. He also had large financial commitments in terms of his mortgage and cars.’

One friend was said to be particularly impressed that Rufus appeared to keep up ‘the lifestyle of a footballer’ long after his retirement.

Rufus, of Anerley Hill, Crystal Palace, south London, denies three counts of fraud by false representation, one count of possessing criminal property and one count of carrying out a regulated activity when not authorised.

His trial is due to last three weeks.

Ms Organ said: ‘In reality, the investments were fraught with risk. He lost their money, hand over fist.

‘The investors, rather than getting the risk-free returns they were promised, lost a great deal of money.’

A forensic accountant categorised £1.5 million of Rufus’s bank account as ‘personal’.

‘Mr Rufus had a mortgage with the Bank of Scotland that cost him approximately £9,000 per month.

‘A third of his personal expenditure was on mortgages and loans, an amount over five years of nearly £700,000, with an average of over £11,000 per month.

‘He also spent £200,0000 on motoring costs with over £70,000 to Mercedes Benz Finance and payments of over £45,000 to Mercedes Croydon and over £46,000 to Land Rover.

‘He transferred £222,468.11 to his wife, Simone Rufus and £158,513.86 to a joint account held with his wife.’

According to the investigator the only legitimate income Rufus had was the rent received through a property in Woodstone Road bringing in just £850 a month.

‘In short, we say the only way that Richard Rufus could fund his lifestyle was to use funds that he was receiving from investors as a result of the fraud.’

Rufus was declared bankrupt in October 2013 after a proposed Individual Voluntary Arrangement by him failed.

In a prepared statement to police Rufus said he had done nothing wrong and his actions were in ‘good faith’.

Ms Organ said: ‘He continually promised people that he would make them very high returns on their investments. He promised that their capital would and was safe. He said capital could be returned to them within 14 days.

‘He continued the lies by either saying there was profit being made by their investments and that it was being “re-invested” and so the amounts held by the investors was increasing, or by actually making profit payments to them.

‘This was all fraudulent since there was no profit and in fact the capital from the investors was not safe and couldn’t be returned by Richard Rufus to them because he was either using it to support the pyramid scheme and make so-called “profit” payments or he used it for his own ends.’

Simon Spence KC, representing Rufus, said: ‘He [Rufus] denies that he ever portrayed Foreign Exchange trading as low-risk, rather he explained how to reduce the risk.

‘He gave no guarantee of a particular return and that of course goes hand in hand with the concept of risk.’

‘If you conclude he was fraudulent, then of course any money he came by was the product of criminal conduct, but if not the money would not be from criminal conduct.’

In relation to the regulatory offence Mr Spence says that Rufus accepts he was not regulated by the relevant bodies at the time of his trading but he did carry out reasonable steps to do his due diligence.

‘Mr Rufus denies making any false representation to those who were investing through him. He does accept that some investors lost money.

‘He denies that any of the funds provided to him for trading were not in fact used for that purpose. Any money given to be invested was invested. Finally, he does not accept, in relation to count five, that all trading activity had ceased between 2010 and 2011.’

The trial continues.
ENDS