Local grandad loses £17K to fraudsters
Paul Butterworth, 72, who lives near Welshpool, was seduced by an advert on Facebook posted by criminals from cryptocurrency traders Diamond Ridge Asset Management.
After registering for the service, he joined a WhatsApp group where alleged fellow investors were singing the praises of Diamond Ridge, which also went under the name of Diamond Ridge Financial Academy.
Mr Butterwoth said: “It all looked very kosher, they had a website and would put out daily reports about the stock market and crypto trading.
“They were allegedly written by a professor, and the stock market reports were very accurate so I assumed their crypto reports were accurate too.”
Between January and April this year, Paul’s investment of £17,106 had apparently grown to more than $750,000.
But the trades were bogus and, when he tried to withdraw some money, his account was frozen and until he repaid out of his own money a $25,000 loan which Diamond Ridge claimed it had provided to boost his trading.
Thankfully Mr Butterworth turned to National Fraud Helpline solicitors which have, so far, successfully recovered £5,500 of his money from his bank, Nationwide. Banks have obligations from regulators to help protect their customers from fraud.
Charlie Quail, a lawyer at National Fraud Helpline, which runs the website www.nationalfraudhelpline.co.uk, said: “This was a very sophisticated scam that allowed victims to login into a fake but very convincing investment platform.
“Platform users thought they were seeing their investments grow which encouraged them to send more money. Unfortunately, it was all a lie.
“Thousands of people have fallen victim to this scam which has left a trail of financial destruction.”
National Fraud Helpline is now pushing to recover the rest of Mr Butterworth’s money via the Financial Ombudsman Service.
Mr Butterworth said he decided to get involved in crypto trading after dabbling on the stock market.
“It just seemed appealing and I thought I might be able to get involved and make a little bit of cash,” he said. “I’m retired and have a lot of time on my hands. I like to keep active, and thought it would give me something to do.”
After a few days in the WhatsApp group, he was messaged by people called ‘Selina’ and ‘Edward’, who encouraged him to help beta test a new quantitative trading system they had developed.
They helped him open an account on a platform called ‘Winning’, and provided him with $2,000 to invest, “which made it even more attractive”.
After four days of following trading tips in the WhatsApp group, the money in Paul’s ‘Winning’ account had seemingly increased to $3,500.
“They allowed me to withdraw 30% of the profit, which made it seem genuine,” he said. “I wish I’d walked away from it there and then, because I was in profit, but I was also hooked because I’d made money. Like an idiot, I got greedy and started to invest my own money.
“The tips came through on a daily basis, sometimes twice a day, and it was great. To be honest, I was enjoying it.”
Diamond Ridge then encouraged him to invest in new coin releases, and when his balance rose to more than $10,000 he was asked to join a partner programme if he could bring his account up to $25,000.
“They said they’d match the figure with $25,000, which they would lend me for a month,” said Paul, a grandfather of two and retired driving instructor.
“I still have the contract, which I printed and signed - it all looked very official. Once this new coin was released, the account went ballistic. They were telling people to put their life savings into it, sell your house etc. I didn’t do that, but I did put a significant amount of what was in my ‘Winning’ account into another new coin release.”
With his account showing a huge $753,855, Paul had mixed emotions.
“I thought ‘wow, I’m going on holiday’, but I also thought it was too good to be true,” he admitted.
His worst fears were realised when Diamond Ridge called in their $25,000 loan.
“I said ‘yeah, not a problem, take it out of the $750,000’,” he added. “They said ‘you can't do that, it has to come from another source’. The ‘Winning’ account was now locked. I could get in but I couldn’t make withdrawals from it because I hadn’t paid the $25,000.”
At that point, he knew he had been scammed.
“I felt awful about it,” he said. “I rely on the state pension, a little bit of stock market trading, and meagre savings, so it had a big impact.
“I’m 72 now, and this modern technology has opened opportunities that I’m just not familiar with. It’s like a goldmine to these scammers.”
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