A conman who blew more than £2million investors’ cash and splashed out on a VIP lifestyle which included a private jet to watch a US golf tournament has been ordered to pay back just over £130,000.
Stephen Rae frittered away other people’s money to live the high life and treated himself to luxury cars, a £178,000 house extension and £68,000 to watch Sunderland FC games from executive boxes.
The shameless fraudster also splashed out £200,000 on a luxury Aston Martin and paid £114,000 on a trip in a private jet to watch a golf tournament in America.
His lavish trip to the US to watch the golf including a VIP hospitality package worth a staggering £30,000.
Incredibly, the court heard how the conman Rae had looked into a Lake District property with helicopter landing pad in the belief ‘major money, in the form of billions, was coming for himself and the investors’.
And he gave money to loved ones, totalling £100,000 and bought a £5,000 Gucci handbag from Harrods – and paid off personal loans
Stephen Rae frittered away other people’s money to live the high life and treated himself to luxury cars, a £178,000 house extension and £68,000 to watch Sunderland FC games from executive boxes
The shameless fraudster also splashed £114,000 on a trip in a private jet to watch a golf tournament in America (file picture)
Meanwhile, his 16 victims, who had trusted him with over £2.3m in the belief he was a sound financial advisor who would make their cash grow, were left crushed when they realised their money had gone.
Some lost their entire pensions, one woman who retired not only lost her home but had to return to work and a father was unable to fulfil his promise to pay for his daughter to attend university, meaning her chance at higher education was lost.
Rae, of South Shields, South Tyneside, admitted 16 offences of fraud against 16 victims who included emergency workers and a teacher.
In December, Judge Gavin Doig sentenced the 63-year-old, who has never been in trouble before, to seven years behind bars and banned him from being a company director for 15 years.
Judge Doig said Rae’s offending was ‘dreadful’, that he told ‘lie after lie’ and he has left victims with an ‘uncertain and perilous future’.
The judge said: ‘While this disaster was unfolding, you brushed off understandable concerns of clients and spent their money on yourself.
‘No sentence I pass can remedy the damage you have done.’
Rae was back at Newcastle Crown Court this morning for a hearing under the Proceeds of Crime Act.
The court heard that while Rae benefited by £2,022,691 through his crime, his available assets to be seized amount to just £131,074.
Prosecutor Deborah Smithies said the £131,074 is largely already in possession of the police, save for a BMW car which is to be sold.
The shameless fraudster also splashed out £200,000 on a luxury Aston Martin and paid £114,000 on a trip in a private jet to watch a golf tournament in America
Judge Doig said Rae will face a further 18 months in prison if the total £131,074 is not surrendered to be paid as compensation within three months.
The court heard at the previous hearing Rae’s company Mason Morton was based in Jarrow, South Tyneside.
He told one employee he had been to China for some government bonds, which prosecutors say he believed could be worth millions and he may genuinely have thought ‘pay day was coming’.
Rae told police when he was arrested: ‘I didn’t intend for anyone to lose their money, I thought I was making them rich.’
The court heard Rae convinced investors to part with money by claiming he had secured a ‘major financial investment’ but could not reveal the specifics of it as he had signed a non-disclosure agreement in relation to it.
Miss Smithies said the investors were actually in a ‘ponzi’ scheme, where early contributors did see some repayments, which actually came from those who put money in later.
When cash flow started to dry up, Rae would say there was trouble releasing money as it was being held overseas.
He eventually resorted to telling investors to ‘f*** off’ and ‘stop badgering’ when they asked when the financial returns were expected.
Miss Smithies told the court: ‘There are 16 complainants and the total money defrauded was in the region of £2.3m.’
She said the amount Rae blew on ‘lifestyle spending’ was just short of £1m.
Miss Smithies added: ‘The defendant by stated occupation is a financial advisor and company director but, by his pleas of guilty, ultimately it appears he was in truth a conman and fraudster.
‘Between 2012 and 2015 the defendant encouraged those who had worked hard and saved money for their retirement and those seeking to make investments more generally to invest funds with him.
He was also accused of spending £200,000 on an Aston Martin sports car (pictured is a stock image of an Aston Martin)
‘As a result of his lies, deceit, false promises and, as they turned out worthless assurances, those customers have, while he enjoyed the high life, at best lost the entire value of their investments and at worst been rendered penniless.’
Miss Smithies said when worried investors asked questions about their money, they were told to ‘stop badgering’, ‘f*** off, in terms’ and others were warned if they kept asking they would ‘go to the back of the queue’.
Miss Smithies added: ‘Meanwhile, he was enjoying luxuries, there is reference in the papers to a £200,000 Aston Martin, a luxury trip with friends via private jet to a golf tournament in the US, the jet cost £114,000.
‘His indulgence with money, which the Crown say belonged to others, included a VIP hospitality package of £30,000 for that holiday, a £178,000 house extension, there are trips to watch Sunderland FC from executive boxes at £68,000.’
Miss Smithies said Rae paid off personal loans, bought more cars, including a Jaguar and Mini.
One brave victim faced Rae at the last hearing and tearfully outlined the damage that he did to her life.
She said: ‘I’m not sure how I can find sufficient words to convey the total devastation this crime has had and continues to have.’
And he spent £68,000 to watch Sunderland FC games from executive boxes (file picture)
The woman branded Rae ‘cruel and callous’ and said: ‘My whole future was thrown into chaos, I couldn’t eat or sleep. I’ve never experienced such total despair.
‘I am ashamed, embarrassed and just devastated.’
The victim said she lost her home and had to return to work part-time and added: ‘There is no possibility of any luxuries, extras must be planned for carefully.
‘This is now my life. I will have to continue to work as long as I can.’
And a father who was no longer able to fund his daughter’s place at university said he now has to continue to work six days per week for survive financially, despite his mounting health problems.
He said he could not understand how Rae could be ‘so ruthless and indifferent in taking people’s hard-earned money while living such an affluent lifestyle’.
Mark Graffius KC, defending, said Rae believed everyone would be paid when ‘the big deal was finalised’ and added: ‘That was the error, he couldn’t guarantee it.’
Mr Graffius added that Rae had looked into a Lake District property with helicopter landing pad in the belief major money, in the form of billions, was coming for himself and the investors.
The court heard Rae has no previous convictions and has a record of ‘exemplary conduct in charity work’.
