Richard Clay, 51, promised investors their money would be put into offshore property development schemes, and that their original investment sum was safe.
In reality, he either spent the money on his lavish lifestyle or ploughed it into various other projects – all of which were haemorrhaging money.
Clay is said to have personally made almost £5 million from the scam.
He and his partner Kathryn Clark, 53, used marketing company Arck LLP to push unregulated financial products on individuals and IFAs.
A confiscation hearing at Southwark Crown Court on Friday (18 June) determined that Clay must repay just £344,244.07 of the £4.87m he made.
Judge Nicholas Loraine-Smith ordered that if the funds aren’t paid back in full within the next three months he will face an added three years behind bars.
Investors handed over millions of pounds, which they thought would be used to fund building projects, including a golf resort on the paradise archipelago of Cape Verde, off the northwest coast of Africa.
Arck took £47.5m between 2006 and 2011 – which Clay either used to fund his spending habit or his doomed business ventures.
Clark forged a bank statement for the Arck General Client account showing a balance of £12,269,425, when in fact it had a total balance of just £25.
Jailing Clay in October, Judge Loraine-Smith said: “No sooner is other people’s money under your control, you start treating it as your own.”
Clark was spared jail on the grounds she had been subject to extreme “emotional manipulation” by Clay throughout their relationship.
Clay withdrew £3.4m from the company for his own personal use between 2008 and 2011, while Clark withdrew £129,845 over the same period – the majority of which was her salary.
She even lost her life savings after Clay talked her into sinking £625,000 into the company.
Nottingham-based Arck was set up in 2006 and described itself as a management company, Southwark Crown Court heard.
Between 2006 and 2011, Clay set up three different schemes allegedly investing in different construction projects in the tourism industry.
Clients were told that their original investment had been ring fenced in a client account, and was safe.
In fact it was being rapidly spent by Clay.
When investors asked where their money was, they were provided with “complicated and bogus’ excuses” for delaying repayment, the court heard.
The frauds were only discovered after civil proceedings were launched and both Clay and Clark later pleaded guilty to fraud charges.
The court heard Clay gambled £900,000 in foreign exchange speculation between March and August 2011.
Clay used £300,000 belonging to an investor to pay off his credit cards, top up his personal investment account and treat himself to a £33,000 Landrover.
The pair were both arrested in March 2012 and during searches of their properties police discovered a confession letter written by Clark.
The letter said Clay was motivated by the twin desires to make money and conceal the reality of the financial situation from investors.
Clay was said to have effectively had the mindset of a gambler who had the unshakable belief his next investment, his next scheme, would provide a windfall.
He spent 11 years in South Africa between 1994 and 2005, and has been subject to an arrest warrant from the South African police for over a decade.
The swindler was accused of offering illegal money changing services to cheat South Africa’s financial controls, but lied on his job applications when he returned to the UK to get a job in the financial services industry.
Clark and Clay were both recently divorced when they met in 2006, and had been working for the same investment firm, the court heard.
Arck, which is now in liquidation, created and marketed property investment financial products, focusing on investments in overseas off-plan property – property in the very early stage of the design and planning process.
Investors were told they could make a short-term profit by selling their investment before the project was completed with a price based on the projected final value of the original plot.
Clay, of John O’Gaunts Way, Belper, Derbyshire, made a profit of £4.87m and must pay back £275,000 in 21 days and a further £69,244.07 in three months or face three additional years in prison.
