A Spalding man accused of fraud told his accountant that his Lottery Syndicate Club involved “gambling” when he asked him to register the scheme with Companies House, a jury heard.
Christopher Toynton, 73, of Horseshoe Road, Spalding, is on trial at Lincoln Crown Court.
He denies 12 fraud charges and contravening a general prohibition on carrying out a regulated activity.
The prosecution allege Toynton was the manager and sole company director of the Lottery Syndicate Club Ltd, which received substantial funds from investors which were later frozen.
It is claimed Toynton was involved in the scheme, along with spread betting trader Ross Gibson, 27, who has pleaded guilty to his role.
A third man, Philip Cavener, 61, is also on trial alongside Toynton.
Giving evidence Spalding based Andrew Smith told the jury he had been Mr Toynton’s accountant in a personal and business capacity since 2017.
Mr Smith said Mr Toynton approached him in April 2018 and asked him to the change the name of his existing company to the Lottery Syndicate Club and register it with Companies House.
When asked if Mr Toynton explained the nature of the business Mr Smith said: “He said it was going to be involved in gambling.”
Mr Smith added: “He said he’d come across someone called Ross who was very good at gambling and krypto-currency.”
The jury heard Mr Smith did not join the Lottery Syndicate Club himself but did give Mr Toynton advice that gambling was tax free.
“My job was to set the company up,” Mr Smith added.
Mr Smith said Mr Toynton later came into his office and told him that Barclays bank had frozen the scheme’s account.
“Chris did come in and say the bank had frozen the bank account and what were his options to get it open again.”
Under cross-examination Mr Smith admitted there were no notes of his conversation with Mr Toynton regarding his setting up of the Lottery Syndicate Club.
Mr Smith admitted it was “always possible” that Mr Toynton had mentioned spread-betting, but his recollection was of the word gambling being used.
Julian Jones, prosecuting, has likened the Lottery Syndicate Club to a Ponzi or Pyramid scheme where investors were paid out from new members joining the syndicate.
Toynton denied any criminality when he was interviewed by police, and Cavener also denied any fraudulent activity.
Cavener, 61, of Douglas Road, Bedford, denies one offence of contravention of the general prohibition on carrying out a regulated activity.
Gibson, 27, of Eve Lane, Upper Gornal, Dudley, has already pleaded guilty to three offences on dates between 1 November 2017 and 31 March 2019.
He will be sentenced at the conclusion of the current trial after he admitted two charges of fraud and one offence of contravention of the general prohibition on carrying out a regulated activity.
The trial continues
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