A former police officer who ran a horse racing betting syndicate has admitted misusing clients’ money to the tune of at least £10 million and keeping at least £4m himself.

Michael Stanley, from Walderslade, pleaded guilty to five charges relating to him defrauding members of the Layezy Racing group between 2013 and 2019 and using the cash to make a gain for himself.

The 67-year-old, of Resolution Close, appeared before magistrates in Sevenoaks this morning.

He had been charged with dishonestly making false representations to members of the group, knowingly running a business for a fraudulent purpose contrary to the Fraud Act 2006 and three counts of knowingly running a business for a fraudulent purpose contrary to the Companies Act 2006.

The court heard the syndicate, which had attracted close to 6,000 members from across Kent and other areas of the country, was set up by Stanley.

It invited people to invest funds with a small proportion of their cash then used jointly to gamble to make money on horses.

However, despite its popularity growing and Stanley promising to deliver incredible returns, he had in fact set up a Ponzi scheme which lured investors and paid profits to earlier members with more recent investors’ cash.

Amanda Burrows, prosecuting, said: “The popularity of the syndicate grew to 6,000 members and when it collapsed, there were 3,000 waiting to join.

“He told investors he was gambling on horses and funds were held in a betting bank. It was a massive fraud.

“He misused funds for personal gain. He was profiting and using the money.”

The former Kent Police sergeant was arrested in August 2019 and in total the court heard £44m had been invested by members over the years and £34m was paid out, but there was a shortfall of £10m.

Magistrates were told Stanley used multiple bank accounts to carry out the frauds and didn’t keep any financial records between 2013 and 2019 when the syndicate finally collapsed.

Ms Burrows added: “He made false profits and inflated the value of funds to members as he was not winning, there was no gain.

“Effectively, he was robbing Peter to pay Paul and used £4m to benefit himself and used it to to pay for himself and family members. Some was turned into assets.

“It was dishonest and it was fraud. He concealed the fact he was not making any money and there was a Layezy Rowers club too and both that and the racing group were used to acquire funds from members.

“He’s also a former police sergeant for Kent Police and in 2019 he declared it (the syndicate) bankrupt, but he personally benefitted [by] £4m.”

The court heard members then reported the matter to police and an investigation started.

One couple who were defrauded of £400,000 came to listen to the case at the court, but revealed afterwards they had not yet received a penny back.

Magistrates decided to send the case to Maidstone Crown Court for Stanley to be sentenced. He was granted bail until then.

A date for his sentencing is yet to be fixed.

Stanley refused to answer reporters’ questions outside the court and when asked to apologise for his deception to the members he remained silent.