A former Kent police officer who swindled members of a horse racing betting syndicate out of £10million has been jailed.

Michael Stanley, from Walderslade, was said to have caused "financial catastrophe and devastation" for those who had invested in his Layezy Racing Syndicate (LRS), many trusting him because of his career in the force.

But not only did the 68-year-old "rob Peter to pay Paul" but he also siphoned off as much as £4 million, using the money to fund a lavish lifestyle for himself and his family.

Maidstone Crown Court heard he indulged in buying a villa and apartment in Spain, 23 racehorses, numerous expensive cars such as Land Rovers, a Ford Ranger and a Jaguar Mark II classic car, private number plates and jewellery.

He also spent over £1million on crypto currency and approximately £600,000 in silver bullion.

The former police sergeant initially set up LRS for family members but it grew in popularity and went on to attract close to 6,000 members from across Kent and other areas of the country.

As many as 3,000 individuals were waiting to join by the time of its collapse in February 2019.

The scheme invited people to invest funds of which just one percent of their money would then be used jointly to gamble on horses, often with bets placed on the second favourite in a race not to win.

He promised incredible returns, claiming it was "virtually risk-free" and he could turn as little as £1,000 into a staggering £13million in just four years.

However, prosecutor Michael Goodwin KC said it was "a massive fraud" as actual successes were virtually non-existent and Stanley, who "set up, controlled and marketed" the scheme, made up winnings to over-inflate the monies being held in accounts.

In what is said to be a "classic Ponzi scheme," he then paid out what were false profits to some members by using more recent investors' cash.

"So unknown to members of the scheme, Mr Stanley was operating a massive fraud," Mr Goodwin told the court.

"He falsely represented that each member's funds were available for withdrawal on notice and that the purported increase in the value of each member's funds had come from successful gambling.

"The truth was that virtually no successful betting was taking place and Mr Stanley was in real terms losing more than he was winning."

A total of £44.2million was said to have been deposited into LRS between 2013 and 2019 through his fraudulent conduct, and although £34million was paid out, there was a shortfall - or "blackhole", the court was told - of some £10.5million.

Many of those involved in LRS had also been left believing that the funds being held on their behalf were far more than was actually available.

It was also established that as little as £182,000 was derived from actual gambling over the six years.

"Mr Stanley was simply making up the numbers and the percentage point used to inflate values," continued the prosecutor.

‘In many cases his victims have experienced a significant impact on their lives and financial futures...’

"To support those lies he was reporting genuine racing successes, albeit he wasn't actually winning and wasn't placing the level of bets he said he was."

Stanley, who served with Kent Police between 1975 and 1984 , set up three other companies - Layezy Ltd, Layezy Racing Ltd and Number 1 Guide Ltd - to enable him to continue his fraudulent activity.

He also spread the money in a "dishonest and chaotic manner" across more than 50 bank accounts, both personal and business, kept no financial records and even referred to investors as "dimwits" in an email to his son.

One was told during a face-to-face meeting with the fraudster that he had actually stopped betting in 2016 - three years before its eventual collapse in February 2019.

This followed press coverage a month earlier in which said it was "nothing more than an elaborate Ponzi scheme," the court heard.

Stanley's initial response however was to assure members it was "business as usual" and continued taking on new members, said the prosecutor.

Stanley, of Resolution Close, then declared himself bankrupt and was eventually arrested, making no comment during the course of five police interviews.

However, in March this year at Sevenoaks Magistrates' Court he pleaded guilty to five offences of fraud in respect of dishonestly making false representations to members of the group, knowingly running a business for a fraudulent purpose contrary to the Fraud Act 2006, and knowingly running a business for a fraudulent purpose contrary to the Companies Act 2006.

Mr Goodwin told the sentencing hearing that it was not accepted that Stanley's conduct was "in any way reckless" as he was asserting "given the size, scale and deliberate nature of the sophisticated fraud".

Of the 21 victims named in court documents, there was a total loss of £1.2million from their investments of £1.7million, with individual losses varying from £250 to almost half a million, said Mr Goodwin.

He added that they spoke of "shame and embarrassment, financial catastrophe, medical and psychological consequences, impact on relationships, breach of trust and lifestyles destroyed".

One described how, having been diagnosed with incurable leukaemia, he had invested to provide for his partner and children's future, only to lose £16,000. However, he had been told his investment was actually worth some £182,000.

Another lost all of her £115,000 investment, which she had been led to believe was worth more than £282,000, and one spoke of "disbelief and panic" when he read press coverage of LRS's collapse.

One investor described the "deep, sick gut feeling" of losing £25,500, money he had hoped would provide for the future of his son who has Down Syndrome.

The court heard one woman suffered a mental breakdown as a result. She told police she had trusted Stanley because of his police background.

"I may be old-fashioned but I thought the police were meant to protect you," she added.

Others spoke of his "aggressive and confrontational" nature, how he operated LRS with "an iron fist", and branded him "a liar, fraudster and thief who preyed on the vulnerable".

Stanley, a gambler since he was 18, represented himself throughout his court proceedings.

The grandfather apologised to those who he defrauded, said he never set out to deceive anyone, and described his arrest as "a relief".

He also dismissed the reliance by the prosecution on his policing background, claimed media reports of LRS were "damaging", and accused members of "bullying" him.

The court heard Stanley linked the start of LRS's failure to his wife's terminal cancer diagnosis in 2014.

He said he was under "immense pressure" to run what had started out as a hobby and "a bit of fun" with around 20 family and friends, based on his "obsessional" analytical studies of horse racing.

But he described becoming "overwhelmed" at the amounts of money being deposited.

The grandfather, who started out working as an accounts clerk before joining Kent Police, also told the court his family was "totally oblivious" to his activity.

He also maintained he did not advertise LRS and never persuaded anyone to join.

"It was not an investment but a punt, pure and simple. It wasn't investing, it was gambling," he told the court.

Stanley also refuted having any luxury lifestyle, said he had never hidden any money or bought hidden assets, and his purchases, in particular the racehorses, were simply in his name, bought for members' benefit and with their knowledge.

Urging that he be spared jail, he said: "I'm very sorry for the hurt I have caused. I really cannot understand how I let it happen other than the fear of discovery.

"It was committed at a time of great strain. This was not normal behaviour. I fully accept my guilt and I am sincere in my remorse."

But in jailing him for six years, Judge Gareth Branston said the fact he had been a serving officer had "bolstered his trustworthiness" with the press coverage revealing the scheme for what it truly was.

Remarking how people understood the risks and odds when they gamble directly, he told Stanley: "When people gambled with you they didn't know the true odds. They were told lies. They were told they couldn't lose even though they were bound to."

Referring to how Ponzi schemes usually failed due to the use of investors' funds to pay others, the judge added: "You managed to keep it on track for years with your deceit and manipulation.

"It was sophisticated, prolonged and directed at as many victims as you could find. It was of a magnitude far beyond most frauds, even serious frauds, seen at this court."

The court heard Stanley claimed several factors were at fault in his running of LRS, including poor internet connections causing him to miss placing bets, banks not willing to to hold money associated with betting. and "falling behind" after his wife's diagnosis.

But Judge Branston said although he sympathised with the caring role he undertook, it was "somewhat insulting" to the many other carers who do not resort to stealing money.

He told the crook: "You say it was reckless. I don't accept that. Your conduct was not reckless. It was deliberate, sustained and repeated.

"I have read 15 victim personal statements, some with heartrending stories. But thousands were affected by your criminal behaviour which you conducted over six years."

Stanley, was disqualified from being a company director for 15 years and will be subject to a five-year Serious Crime Prevention Order on his release. He also faces confiscation proceedings at a later date.

Detective Sergeant Alec Wood of Kent Police said: “Mike Stanley started Layezy Racing in 2010 as a legitimate source of income for himself and those who paid into the scheme, but the financial evidence showed that from 2013 onwards he was criminally cheating people out of their hard-earned money in order to maintain his own lavish lifestyle.

“In many cases his victims have experienced a significant impact on their lives and financial futures as a result of Stanley’s false promises, and I would like to thank them for their assistance and patience with what was a significant case in terms of its scope, complexity and administration.

“I hope the outcome of this investigation sends a clear message that anyone who seeks to lie and cheat their way to financial prosperity will be brought to justice.”