A former police officer who defrauded members of a horse racing betting syndicate out of millions of pounds and used their cash to pay for his lavish lifestyle such as Landrovers, racehorses and a villa in Spain has been jailed.

Michael Stanley lied to some 6,000 members of Layezy Racing Syndicate about successful gambling and increasing their investments between 2013 and 2019, while in reality he used their funds paid into the scheme for personal gain such as jewellery and private number plates, Maidstone Crown Court heard.

At his sentencing on Tuesday, it was heard how of the £44 million paid into the scheme there was a “black hole” loss of £10.5 million to its members, who faced “ruin and financial devastation” following the group’s collapse.

The court heard Stanley used £4 million on personal spending.

Prosecutor Michael Goodwin KC told the court: “He reported increase in value of member’s funds had come from successful gambling.

“Michael Stanley was in effect positively accruing further dishonesty as the reputation of the scheme, which the public believed was a successful gambling scheme, only furthered the deception and the lies as time continued.

“Unknown to members of the scheme, Michael Stanley was operating a massive fraud.”

The court heard how the 68-year-old marketed the scheme as 99% risk-free, with only 1% of their funds to be used for the gambling, and their investments could be withdrawn at any time on notice.

Mr Goodwin added: “He wasn’t actually winning from the gambling, he was pretending to be carrying out in real terms, he was robbing Peter to pay Paul, to use the expression.

“In reality, Michael Stanley was misusing money for personal gain he wasn’t entitled to, because there was in fact very little successful gambling taking place.”

Members of the scheme said they partly trusted Stanley because they knew he was a former sergeant with Kent Police, where he served between 1975 to 1984.

One woman said in a victim impact statement: “I trusted Michael Stanley because he used to be a policeman.

“I may be old-fashioned but I thought police were meant to protect you.”

Mr Goodwin said for victims in the case there was evidence of “shame and embarrassment” and “financial catastrophe” experienced by many of them, some had been investing for their wedding and children’s inheritance, and losses heard in court ranged from hundreds of pounds to £500,000.

In victim impact statements read to court, it was heard how one member joined the syndicate desperate for money after the death of her husband to support her three young children and lost all £115,000 she invested.

Another member who joined to fund a safe environment for his son who has Down’s Syndrome as he got older described the “deep, sick gut feeling” he had realising they had likely “lost all our money, all our plans, hopes and dreams gone”.

Of 21 members, who the prosecution relied on for the first charge of fraud, Mr Goodwin said their total investment amounted to £1.7 million between 2013 and 2018 and their net loss overall was £1.2 million when the scheme collapsed in February 2019.

Mr Goodwin added that Stanley misused the funds to pay for a lavish lifestyle including buying 23 racehorses, a villa and apartment in Spain for £400,000, Landrover vehicles amounting to more than £600,000, while also spending more than £1 million in cryptocurrency.

The court heard how Stanley was declared bankrupt and proceedings are continuing with £8.4 million so far having been recovered by administrators.

Stanley, of Walderslade, Kent, previously pleaded guilty to five offences relating to the fraud at Sevenoaks Magistrates’ Court on March 7.

He admitted dishonestly making false representations to members of the Layezy Racing Syndicate, participating in a fraudulent business carried on by a sole trader, and three counts of knowingly running a business for a fraudulent purpose.

Defending himself from the dock, Stanley told the court how it began as “a bit of fun” for friends and family but as it grew he struggled to keep up with everything.

He said he was overwhelmed by the workload in the face of his wife’s cancer diagnosis in 2014 and suggested grief also was the reason for his behaviour.

“I always thought I would be able to bet my way out of trouble, but this was not possible,” he said.

“The syndicate had taken over my life in every respect … I did not know what to do.”

He added: “I am very sorry for the hurt I’ve caused members and my own family, I cannot understand how I let it happen apart from my own fear of discovery.”

Sentencing Stanley to six years’ imprisonment, Judge Gareth Branston said: “Your conduct was not reckless, it was deliberate, sustained and repeated.

“When people gamble with you, they did not know the true odds, they were told lies.

“That type of Ponzi fraud is always going to collapse but you managed to keep it on track for years with your deceit and manipulation.”

Stanley was told he would serve half of his sentence in custody and the rest on licence while he was also banned from being a company director for 15 years and subject to a serious crime prevention order.

Kent Police detective sergeant Alec Wood 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.

“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.”