Published: 12:12, 25 September 2020
| Updated: 12:33, 25 September 2020
A Maidstone man at the centre of a collapsed horse race betting syndicate is suspected of owing creditors more than £158 million, it has emerged.
Mike Stanley, a former police officer who operated Layezy Racing, has now received a 14-year Bankruptcy Restriction Order (BRO) at the High Court after the staggering scale of debt was revealed.
He is now banned from running limited companies and must disclose his status when he attempts to secure £500 or more in credit.
The High Court heard that for nine years, between 2010 and 2019, the 64-year-old operated a betting syndicate which started out as a hobby.
Original members were family and friends and the scheme would bet on their behalf, earning profits on horses identified by Stanley's system.
In 2012, the scheme expanded to accept members beyond family and friends and over the syndicate’s lifespan, received at least £40.3 million from more than 6,000 members.
Almost £28m was taken from new members and used to pay existing ones so it would appear they were earning profits. At least £1m was used to place bets.
Stanley used various bank accounts set-up to collect syndicate members’ money to purchase 23 horses totalling £1.6 million. He also caused the syndicate to make payments totalling at least £780,000 to third parties.
The syndicate suddenly closed in February 2019 following reports in the media and Stanley’s misconduct was uncovered by the Official Receiver after he applied for his own bankruptcy.
Creditors in Stanley’s bankruptcy have made claims which total £53.4 million in respect of monies they have paid over to the syndicate, and £158.7 million on a reported profit basis, The Insolvency Service has disclosed.
Due to the size of debts and the risk he posed to creditors, the Official Receiver applied to increase the period of his bankruptcy restrictions.
Insolvency and Companies Court Judge Prentis handed down the 14-year BRO to Stanley who did not attend the High Court hearing.
'For nearly a decade, he duped his members into thinking they were making profits on their bets but in reality, the money received was secured from new members joining the syndicate...'
Deputy Official Receiver Barry Gould said: "Throughout the syndicate’s existence, Michael Stanley acted in a duplicitous manner.
"For nearly a decade, he duped his members into thinking they were making profits on their bets but in reality, the money received was secured from new members joining the syndicate and not on the scheme’s success.
"The court recognised the severity of Michael Stanley’s misconduct and he will now have to comply with 14 more years of bankruptcy restrictions, which will not only severely curtail his activities but also protect members of the public and lenders in the future."
Philip Duffy and Allan Graham of Duff and Phelps have been appointed as Stanley’s trustees in bankruptcy.
Stanley remains subject of a Kent Police fraud probe which has been ongoing since he was declared bankrupt in February 2019.
People who have invested in the Layezy Racing Owners Club should contact the trustees via Layezyinvestors@duffandphelps.com to register as a creditor.