Members of the first pub syndicate ever to win the National Lottery have been left stunned, after being told that every penny of the money that they gave to a local man to invest for them has been lost.
How could this happen?
The lossMembers of the Tudor Tavern syndicate in the village of East Preston won £3.6 million in 1997. Some of them invested their winnings with David Reeves, a former accountant who ran a private investment club used by people in the village
Now the Daily Mail has reported that Reeves, who is not registered with the Financial Conduct Authority, sent letters to his clients informing them that the club's investments had failed.
The Telegraph reported that after sending the letters he handed himself into police. A spokesman for Sussex Police told the newspaper that a man had contacted them to report matters "relating to investment schemes he had operated for local people." However, no arrests had been made, and there is no indication of any deliberate wrong-doing. There is no sign that this is anything other than an investment scheme that has performed particularly poorly.
Bad investmentsIt's not the first time Lottery winners have lost money through troublesome investments.
William 'Bud' Post won $16.2 million in the Pennsylvania lottery in 1988 and was soon persuaded by his siblings to invest in their car business and a restaurant. Both investments failed, and after he quickly spent the rest of the cash he ended up declaring himself bankrupt.
Roger Griffiths and his wife Lara - from Wetherby in West Yorkshire - won £1.83 million on the National Lottery in 2005. They lived the high life and spent the money fast, but decided to invest for the future by buying a beauty salon and a number of properties to renovate. The salon ended up losing £4,000 a month - and was sold at a £70,000 loss, and the housing market's collapse saw the value of the property portfolio destroyed and the homes repossessed. The couple have now separated.
Fortunately there are some that have a lucky escape. Barry Fleischman was working for the legitimate side of the business run by the Ponzi-scheme crook Bernie Madoff. When he won $17 million on the lottery in 2007 he asked his boss to invest some of it for him. Fortunately, Madoff said he wanted the lot, so Fleischman decided to take his money elsewhere. You could say that he won the lottery twice.