Friday 2 February 2001

Thirteen Against The Bank by Norman Leigh

Originally published ten years after the events described, this book recounts one man's efforts at training up a team of system roulette players and travelling to Nice in the South of France during the late summer of 1966. 

Whilst there they applied his system with cast iron discipline, allegedly cleaned out the local casino, were eventually barred and finally obliged to leave France by the French Authorities.

Whilst the main events of the story did indeed take place, despite being a fairly enjoyable read I think it comes closer to an adventure from the Enid Blyton stable than being a "true and detailed account" of what actually happened - some aspects seem suspiciously detailed considering they were written about so much later. 

The author, who was aged thirty-eight at the time the story takes place, states he was a lifetime roulette obsessive, a heavy drinker, had never applied himself to very much apart from roulette and was "no candidate for canonization". 

Within the book's foreword he also admits to having been accommodated at Her Majesty's expense for a time, having been found guilty of fraud some two years after the team returned home and disbanded.
New Milton Advertiser - Saturday 24 January 1976

Not a good weekend for Norman Leigh 

Last weekend was not a very good one for Mr. Norman Horace William Leigh (47), of 11, Nelson Place, Lymington.

The "Sunday Mirror" published an investigation into his activities, and on Monday he appeared at Lymington Magistrates' Court where he was fined £10 for being drunk and disorderly the day before in the High Street and Captain's Row,

The "Sunday Mirror" article dealt with an investigation into Mr. Leigh's past, and his offer to the public suggesting they could earn large sums if they bought his infallible gambling system. His posters read: "Earn up to £475 a week working in London or on the French Riviera (no selling involved). Full details without obligation".

For only £100 plus 25 per cent of the winnings, Mr. Leigh will sell the secret of his roulette system. He said his plan was to recruit 100 people to play the roulette tables as individuals at clubs in London and on the French Riviera. "By working inconspicuously at roulette four hours a day, for five days a week, 100 people could gross £50.000 a week of which, by contract, my share would be £12,500." he told Lawrence Turner, who did the investigation. 

In case anyone might be anxious to try their luck, the "Sunday Mirror" also revealed that Mr. Leigh has a record as a confidence trickster, and was sentenced to five years in jail in 1970 for what the prosecution called "a heartless fraud on people seeking homes." Mr. Leigh claims he was framed.
Thirteen against the Bank is his tale of the last in a succession of visits to the South of France undertaken, over many years and with many others, for the purpose of beating the wheel.

Never having succeeded, he convinced himself of the validity of a theory published in 1923 by the Hon.S.R.Beresford, third son of the third Baron Decies, that the reason people lost so much playing roulette was less about the impact of the house edge and more about the consequence of increasing bets when losing and chasing losses.

So if he adopted a system of keeping bets at a constant level when losing, but increased them when winning the additional player exposure risk the house enjoyed when players chased losses, and laid out more and more money, would be reversed and he'd benefit from this "advantage" as the bank played against wagers made with money it had lost - albeit with its mathematical edge remaining unchanged. An instance of turning the tables so to speak.

Following on from this he adopted the Honourable Mr B's suggested "system", which takes the already known Labouchere negative progression system (one where you bet more when losing to recover losses), and simply reverses the staking plan to arrive at the Reverse Labouchere - bets would be progressively increased as successive wins occurred, but remained constant when they didn't. 

By betting on both opposing sides of an evens-payout option (e.g. red and black together), barring zero being spun the result would be no loss (lose one, win one) and he could carry this on until a prolonged positive streak occurred and he could ride it whilst increasing bets up to the table limit.

Furthermore, by having six players at the table, all covering the six evens-payout options he'd increase the likelihood of one of them hitting such a streak, which he refers to in the book as a "progression" and one of his team members as a "mushroom". 

All sounds workable. Unfortunately, despite all of this the house edge was always there, and by arranging to cover all of the evens-payout options, instead of just two of them that lay off each other, he was simply increasing the amount wagered, and therefore the amount exposed to it, by a factor of three.

The premise of this unbeatable system seems to be based on the chance that streaks of continuous winning results will occur often enough, and continue for long enough to reach the table limit, to generate sufficient winnings to offset the losses resulting from the zero being spun and the house edge biting. 

Unfortunately, the fatal flaw in the system, as with all roulette systems, is the inevitability that the variance will average out, and with sufficient volume of play there'll come a point where even a result that's three standard deviations north of the EV will still leave players out of pocket. 

After that, no amount of favourable results will ever recover the accrued losses sustained. The house edge will have done its job. Within the story there's no mention made of players keeping a tally of the amount they'd wagered during each session, and so presumably nobody was keeping track of the team's EV and the actual results relative to it - a major oversight by the team manager. Or was it?

Some have suggested that perhaps mathematics may not have been the author's strong point, although I'm not so sure. In his story he contributed none of his own capital to the enterprise and all of his team were required to pay all of their own travel and accommodation expenses, and provide a minimum amount of £250 stake money (the equivalent of £4,200 today) in order to apply his system in France - he carried no financial risk, apart from his own travel and accommodation expenses, and made his money by taking 10% of any winnings. 
Interesting that the tally of the winnings that took place regularly never seemed to take account of the losses suffered by each player, when their progressions petered out and they had to start the betting sequence again, to arrive at a net profit for those sessions. Nice work if you can get it - take a percentage of the gains, but suffer none of the losses every team member had to take on the chin.

I suppose a question is could the Reverse Labouchere be applied today, on the prospect of just getting lucky. Sure, and you might just be so. But as casinos nowadays have a five or ten times table minimum bet requirement on evens-payout options, and maximums of 500 or 1000 times table minimum, the scope for recouping sustained losses from progressing to the table limit is fairly limited over what it may have been in the past. You could reduce the exposure by betting 6 lines (6 lots of 6 numbers, so all of them bar the zero) at the table minimum with a co-player, which would mean betting 6 units per spin rather than 20 but achieving the same coverage and providing some el-cheapo entertainment into the bargain. It might be fun, but don't be under any illusions that the longer term prospects for this system lead South. Accurate and comprehensive record keeping will expose it's fallibility.

After reading the book, I did wonder what became of Norman Leigh? Half an hour searching the web provided the answer; I came across some postings from someone who knew and had played roulette with him together with two entries on the Amazon review page for Thirteen against the Bank from his niece and his ex-wife, Pauline. 

Her recollections of the outcome of the trip to France in 1966 contrast starkly with those in the book. Unsurprisingly it seems he never managed to beat the wheel, was declared bankrupt three years after his book was published and lived the latter years of his life impoverished and reliant on state benefits. He was admitted to Queen Alexandra Hospital, Portsmouth, late in 1992 suffering with pneumonia, and whilst there suffered a fatal heart attack resulting from his illness. He died on 4th January 1993, aged just sixty four.
To an outsider it does look as though Norman Leigh was just another in a long line of people whose ruin can be attributed to the "devil's wheel". No doubt there'll be many more in the future. No coincidence that when you add all of the numbers on a roulette wheel together you get 666; there's a message in there somewhere?

Thirteen against the Bank was reprinted in 2006 and remains available from all major book retailers.

November 2014


Shortly after I finished reading Thirteen against the Bank I wrote to Pauline, Norman Leigh's ex-wife, and she kindly agreed to meet me and answer some questions . . .

Q. Was the team really made up of an Etonian, a publican, an ex-copper, a glamorous mum, an elderly widow etc? Can you recall the backgrounds of the team members you met?

A. I think the characters portrayed in the book are a fairly accurate reflection of the team's mix. The Etonian, named as "Blake" in the book, who acted as Norman's second, was actually a stockbroker. All of the characters' names have been changed of course, and I think it would be indiscreet of me to name them.

Q. Was the team's barring from the Casino Municipale in Nice carried out in the respectful manner described in the book, or was it simply a case of them being turned away at the door one day with no reason being given? Are you able to elaborate?

A. I don't know as I didn't join the team until after they had been barred from playing at the Casino Municipale in Nice.

Q. At what point did the French police become involved (if at all) and to what extent?

A. Again, I don't know. The team certainly wasn't ejected from the Country, as after I joined them we stayed in France for a further three weeks and returned home voluntarily (and broke).

Q. After the team's members were barred, did you all travel to any other casinos in France to try your luck?

Yes. By the time I joined the team they were already playing at the Casino du Palais de la Mediterranee, which is also in Nice.

Q. Do you know how much money was actually won or lost on the trip - for Norman and the individual team members?

A. No. I became aware that things weren't going too well when the letters Norman had been sending home, that contained French banknotes, dried up and the amount of money we had to pay for our stay in France dwindled; we went from enjoying three meals a day to having just one. Eventually, after three weeks, a meeting of the team was called to decide whether to continue or not. Norman was all for carrying on, but the majority voted not to and to return home. I recall that towards the end of the discussions "Blake" turned to Norman and said, "Mr Leigh, you are a dreamer and your wife is a realist!".

Norman and I travelled back to England, all the way through France, by train on third class rail tickets. Some members of the team, who were staying in better hotels and were not short of funds, opted to stay.

Q. Your father gets a mention in the book, and Norman describes him as "old school" when meeting him for the first time. What was his reaction to the plan to travel to France to break the bank at roulette?

A. If I recall rightly he was calm and uncommitted when I told him of the plan, and said something along the lines of "if that's what you want to do, good luck".

Q. After returning to the UK, were there any plans for the team to continue playing together in casinos in Britain?

A. No. I'm pretty sure that those members of the team who returned home had all lost money.

Q. Did you and/or Norman ever meet up with any of the team members after the return from France?

A. Just once. Norman and I met up with one couple for dinner, but that was the only time.

Q. Did Norman subsequently continue to play roulette and plan around "beating the wheel"?

A. I'm sure he did. He always had one scheme or another in hand, including selling "winning systems".

Q. In the book's foreword, Norman admits to having been convicted on a fraud charge in 1968 and of serving time as a result (although he doesn't state how long). Is this something that happened whilst you were still together? If so, would you be willing to share the details?

A. I'm afraid I can't recall the circumstances of the case or the charges. Around that time we had to give up our house in Twickenham. I'd foolishly allowed him to use my name on some HP agreements, and shortly after that he was convicted and accommodated by Her Majesty's Prison Service. I know he was sent to prison on more than one occasion and was made bankrupt.

Q. Are you able to provide any details of Norman's fortunes after your separation and divorce?

A. After we separated I returned to the Isle of Wight and Norman was convicted. Our divorce formalities took longer to conclude than they needed to as a result of Norman making difficulties from prison. After he was released, he did contact me and ask if I could help him out with some money, but I declined - during our marriage, all of my savings and a bequest from an Aunt were used up supporting his schemes.

Before we were married, Norman had worked as an Insurance Agent for a short time, but resigned due to a dispute over sales and withheld commissions, and I think that was the last time he ever had a real job. Norman did come and meet our son, Julian, and a vague contact ensued until the time of Norman's death - which Julian found out about through seeing a local press headline on a newsagent's billboard.

Norman's last address was a room at the Catisfield Hotel in Fareham, which to all intents and purposes was a DSS hostel. After his death I was contacted and asked if I would go there and clear out his effects, which I did. He didn't have much and was given a pauper's funeral.

Norman's estate is still managed by an agent, and the TV and film rights to his book are renewed by a production company every two years.

Many thanks to Pauline for indulging my curiosity.

From the Sunday Mirror of 18th January, 1976:

Further reading:

Their conculsion:

Fact or fiction?

Based on our simulations, we conclude that the book Thirteen Against the Bank by Norman Leigh is a work of fiction – which is a shame as it is a very nice story – and that the system it describes cannot, and does not, consistently return a profit. Our future work will include simulating other betting systems, including those of the game of blackjack, so that the scientific archive, and the general public, have a point of reference for systems which claim to “break the bank”.

Thursday 1 February 2001

Ron Pollard

From the Daily Telegraph's Obituary pages, 5 July 2015:

Ron Pollard, who has died aged 89, changed the face of British betting by taking the bookmaking business beyond horse and greyhound racing into the more exotic arenas of beauty contests, politics, book prizes and the arrival of aliens from outer space.

Guided by his principle that “betting should be fun”, Pollard’s genius was to realise that many punters would cheerfully bet on outcomes far less likely than their being struck by lightning. “It was abundantly clear”, he once said, “that the public would gamble on absolutely anything. If it moved, if it was on TV, if it caused an argument in a pub, they wanted to bet on it.”

His aim was always for his firm, Ladbrokes, to be first with anything new, thus raising its profile and encouraging more punters to use it. Having introduced betting on cricket, golf, tennis, darts and snooker, in 1977 Pollard offered odds on the existence of the Loch Ness Monster; in the same year Ladbrokes started to take bets on the arrival of aliens on Earth, giving 500-1 to a group in California run by a woman who claimed to be a reincarnation of the Mona Lisa.

Pollard offered odds of 1,000-1 against Elvis Presley returning from the dead. Although he conceded that this was a “tasteless exercise”, Ladbrokes took so much business that it soon had a £2·5 million liability, and he had to cut the price to 100-1. The safest bet he ever laid was placed by a teenage girl: 5,000-1 against her taking tea with a reincarnated Elvis by the end of 1982.

Although these stunts were not always profitable – Ladbrokes had offered 100-1 against a man walking on the moon in the 1960s – he appreciated that they reaped for his firm “the most precious commodity of all: publicity”.

Pollard did not attribute his success entirely to his own acumen. He was a self-confessed spiritualist who believed that he was guided by a 15th-century bearded Chinaman in a white skull-cap. His interest in this field had been aroused in 1955 when, aged 29, he accompanied his mother-in-law to Kennards, a department store in Croydon, where she consulted a medium.

Although then a sceptic, Pollard also saw the medium, who caressed the young man’s comb before pronouncing: “Goodness gracious, I wish I was going to have your life. You are going to be in all the papers, everyone wants to know what you are saying, and you are going to Buckingham Palace [to] meet members of the Royal Family.” It was she who alerted him to the presence of his Chinaman. Twenty-four years lat er Pollard was honoured as “Spiritualist of the Year”.

His greatest coup came in 1963, when he introduced betting on politics with the “Tory Leadership Stakes”: “For two weeks I did not know if I was a bookmaker or a film star. The telephone did not stop ringing. I was constantly on television and radio. Everyone wanted a quote.” Sir Alec Douglas-Home (the eventual winner, who had initially ruled himself out of the contest) was installed at 16-1; Ladbrokes took £14,000 on the exercise, making a profit of only £1,400. But the company was now known across the world.

At the next general election, in 1964, Ladbrokes opened a book. The hotelier Maxwell Joseph bet £50,000 on a Labour victory, winning £32,272 when Harold Wilson emerged with a five-seat majority. Had the Tories won, the firm would have lost £1·5 million — money it did not have. Pollard was so concerned about this outcome that he resolved to commit suicide in the event of a Conservative victory.

The £640,000 that Ladbrokes took on that election was the record at the time for any single event (including the Derby or the Grand National). In the general election of 1966 the firm took £1.6 million.

Before long, Pollard was being entertained by MPs at the House of Commons. At the time of the Conservative Party’s leadership election of 1975 he was invited to lunch at White’s, where someone inquired what odds he was offering on Margaret Thatcher to win the Tory leadership. Pollard replied: “Fifty to one.” Pollard’s companion confided: “I would be very careful if I were you.” The odds were immediately slashed to 20-1.

Occasionally, Pollard’s political antennae (or his Chinaman) let him down, as in the general election of 1970, which the Conservatives unexpectedly won, costing Ladbrokes around £80,000. Some members of the board wanted Pollard sacked; but the chairman, Cyril Stein, remained loyal, telling his colleagues: “If he goes, I go.” The odds-maker survived.

Ronald James Joseph Pollard was born in London on June 6 1926. His paternal grandfather distributed relief money to the unemployed, and would visit pubs in Southwark disguised as a chimney sweep to see if any of his clients were spending their welfare on beer. Although Ron’s father was the accountant to a mineral water company, the family had little money and his mother worked from home as a glove machinist. At school in Peckham Ron failed to shine academically but enjoyed playing football and cricket. He left with no qualifications.

He got a job as an office boy in a building firm at Peckham, learning bookkeeping. On Saturdays he went greyhound racing at Catford. Then, in 1943, he became a ledger clerk with William Hill at the bookmaker’s office in Park Lane. At first he ran errands, such as paying a jockey who had obligingly finished second on a hot favourite at Goodwood. At this stage Hill’s was operating illegally by handling cash betting, which was then allowed only on the racecourse (transactions off-course had to be on a credit basis).

Although he was called up for the Army, Private Pollard was still at Westcliff-on-Sea on VE Day. He then served on the Gold Coast, where he was promoted to sergeant and won the Gold Coast ping-pong championship two years in succession.

He returned to Britain in 1947, and was demobbed the following year, returning to work for William Hill. He was made a course clerk, recording the bets taken by the Hill’s representative, and occasionally acting as the bookmaker at some of the smaller meetings; he was then appointed manager of the accounts department.

Pollard joined Ladbrokes as credit manager in 1962, the year the firm opened its first betting shops. “These were still the days of credit betting, and you had an account with Ladbrokes at their Burlington Street offices only if you were in Debrett,” he said. “If you were in trade, no matter how prosperous, you had no chance of an account with the firm that had a direct telephone link to Buckingham Palace for the regular royal bets that would be struck, sometimes daily.”

Before long he had been appointed general manager of Ladbrokes, and, in 1964, he was made a director of Town and Country Betting, the Ladbrokes holding company which was to become Ladbroke Racing. In the same year he became the firm’s PR director, remaining there until his retirement in 1989.

Among Pollard’s most famous stunts were his forays into the Miss World contest. These did not endear him to the organisers, Eric and Julia Morley. After Julia Morley accused him, apparently without irony, of “dragging [the contest] into the cattle market”, and banned him from the Miss World rehearsals in a television studio, Pollard disguised himself as a carpenter (complete with overalls, cloth cap and a tool kit) and spent a morning assessing the attributes of the candidates on whom he was to make a book.

On another occasion he assumed the character of a waiter, sporting a false grey moustache, to penetrate the dining room at the Dorchester where the finalists were attending a function. Pollard was extremely successful in predicting the outcomes of Miss World, and in 1982 personally won £5,000 when Miss Dominican Republic took the title. His guiding principle was: “The sexy ones never win.”

When it came to fixing odds for the Booker Prize, Pollard would read the first 60 or so pages of a novel; a similar number in the middle; and the final 60.

Pollard himself was not a habitual gambler (betting “only when I thought I knew something”) and did not have a high opinion of those who were: “The reason why people bet has nothing to do with money. They do it because they want to get one up on the other fellow and because they want to be right.”

He was an entertaining man and a fine raconteur who courted, and made many friends among, the press. A lifelong socialist, his greatest regret was that he never became an MP; he claimed to have been offered a seat by all three main parties.

In 1991 he published an autobiography, Odds & Sods: my life in the betting business.

Ron Pollard is survived by his wife, Pat, and three children.

Ron Pollard, born June 6 1926, died June 10 2015

Navinder Singh Sarao – The Hound of Hounslow

It took Navinder Singh Sarao a long time to accept that he might have been scammed out of $50 million. Stuck in London’s Wandsworth prison, wracked with anxiety and unable to sleep, the realization dawned on the man dubbed the “Flash Crash Trader” as slowly as spring turned to summer outside the barred window of his jail cell.

The trauma of the past few weeks had been difficult to process. On April 20, 2015, the slight, doe-eyed 36-year-old had dozed off peacefully in the same suburban bedroom he’d slept in since he was a boy. The next day he was arrested and taken to a police station, where he was charged with 22 counts of fraud and market manipulation carrying a maximum sentence of 380 years.

According to the U.S. government, the British day trader had made tens of millions of dollars using an illegal practice called spoofing, including, fatefully, on the morning of May 6, 2010, when the Dow Jones Industrial Average fell almost 1,000 points in minutes before bouncing back. The extent of Sarao’s culpability for the flash crash is fiercely contested, but the incident exposed the shaky foundations on which the hyper-fast, computer-dominated financial markets now rest.

Sarao’s bail was set at 5.05 million pounds ($6.3 million). It was a hefty sum, but according to the accounts of his company, Nav Sarao Futures Limited, he’d earned 30 million pounds in the previous five years. Newspaper reports, in which Sarao was dubbed “The Hound of Hounslow,” speculated that he’d be back with his family in the shabby West London borough by the weekend. 

Instead, the nightmare got worse.

Where’s the money, Nav, his lawyers wanted to know. Sarao couldn’t make bail, they gradually learned, because the bulk of his wealth was tied up in investments and offshore trusts, each more complicated than the last. Days in Wandsworth prison, a Victorian-era fortress where Sarao was housed with sexual predators and violent offenders, turned into weeks.

After four months of dead ends, his legal team struck a deal with the authorities: If the U.S. Justice Department and the Commodity Futures Trading Commission agreed not to oppose a reduction in bail to 50,000 pounds, the firm would act as a bounty hunter, taking on responsibility for tracking down the missing millions on the condition that its fees be paid if it did.

They were going down a rabbit hole. A review of Sarao’s investments from 2005 to the present day, based on dozens of interviews and thousands of pages of documents, reveals another twist in an already remarkable story. 

Navinder Sarao, the trading savant accused of sabotaging the world’s financial markets from his bedroom, may himself have been the na├»ve victim of what his lawyers portray as a series of cons that stripped him of almost every cent he earned.

Sarao declined to comment for this article. His lawyer, Roger Burlingame of Kobre & Kim in London, told a U.S. judge in November that all of the defendant’s assets “have been stolen.” Sarao invested in ventures from which he, the law firm and the CFTC had been unable to recover the funds, Burlingame said. “Basically, he has some extraordinary abilities with respect to pattern recognition and certain sorts of mathematical abilities, but he has some fairly severe social limitations.”

Sarao’s trading career started inauspiciously in 2002 at Futex, a fledgling outfit in an unglamorous office an hour from the City of London that housed wannabe traders in exchange for as much as 50 percent of their profit. In a roomful of recent college graduates and drifters, Sarao stood out from the pack.

“Nav was always going to be the kind of person that would be legendary in some way,” Futex Chairman Paolo Rossi said in an interview with Bloomberg TV after Sarao’s arrest. He had “the potential to be remembered as one of the world’s greatest traders.”

It wasn’t until Sarao left Futex in 2008 and struck out on his own that he started to make serious money. Public filings show his assets popped to 14.9 million pounds from 461,000 pounds in the 12 months ending in June 2009, long before he enlisted a programmer to build a system that authorities say was designed to cheat the market.

Former colleagues talk about Sarao’s frugality—his scruffy clothes, his reluctance to spend money on cars and watches, his abstemious eating habits. He learned early at Futex that withdrawing cash ate into his bankroll and reduced the size of trades he could place.

That near-obsessive drive to hold on to as much of his wealth as possible can also be seen in the way he conducted his business affairs. Looking to minimize his tax bill, he was introduced by his accountant to John Dupont, a director at the London arm of an Isle of Man-based financial advisory firm called Montpelier Tax Consultants.

Dupont, then in his mid-30s, was a high-energy salesman whose accent veered from upper class gent to Guy Ritchie cockney depending on who he was speaking with, a former employee recalls. Operating from an office on Cockspur Street in London’s West End, members of his team cold-called contractors, day traders and bankers and tried to enlist them in a range of plans to minimize their tax bills, documents seen by Bloomberg show.

The aim was to identify loopholes before they were closed. One former Montpelier employee said he coaxed wavering customers to sign up by promising to pay their legal bills in the event of a clampdown by Her Majesty’s Revenue and Customs. Everyone at the firm thought he was Alec Baldwin in “Glengarry Glen Ross,” the person said.

Self-employed traders were particularly good prospects because they were predisposed to high levels of risk. And Sarao, an absent-minded dreamer with an unerring gift for making money who would later be diagnosed with Asperger syndrome, would prove to be the ultimate mark.

In 2009, on the advice of Montpelier, Sarao entered into a complicated dividend-stripping scheme that resulted in a major reduction in his tax bill, according to a close adviser to Sarao who spoke on the condition of anonymity. Happy with the result, Sarao went a step further the following year, the person said.

Among Dupont’s crew was Miles MacKinnon, a polished so-called introducer who had left school for a stint as a rugby player before heading to the City of London. For four months in 2010, MacKinnon became the only other director of Sarao’s firm.

Around the same time, Sarao set up two employee benefit trusts in the Caribbean island of Nevis, according to a document filed in Sarao’s case. He plowed his earnings into those trusts, then gave himself interest-free loans to trade with and live on, the adviser said. The arrangement meant Sarao all but avoided paying corporate taxes. One vehicle was named the “NAV Sarao Milking Markets Fund.”

Dupont and MacKinnon said in an e-mail that they “did not introduce or advise” on the Nevis trusts.

Sarao had an uncanny ability to attract controversial characters. He sought advice from tax specialist Andrew Thornhill, who in 2015 would be charged by the British barristers’ industry group with five counts of professional misconduct. And, as the Wall Street Journal reported, one of Sarao’s trusts was, for a period, affiliated with David Cosgrove, the Irish director of Belvedere Management who has been barred by Mauritius authorities from serving as a company officer because of regulatory violations. Thornhill declined to comment. Cosgrove didn’t respond to e-mails.

In 2011, the British government ended the benefit-trust gravy train. Sarao paid back the loans and restructured his business. Montpelier was investigated and dissolved, and about 3,000 of its customers were ordered by a judge to pay 200 million pounds in back taxes. Fraud charges against two directors were later dropped.

MacKinnon and Dupont—along with a third partner, Ryan Morgan—then founded MacKinnon Dupont Morgan, which was later reborn as MD Capital Partners. The firm describes itself on its website as a boutique private equity firm.

They leased an office in Mayfair, home of hedge funds, Michelin-starred restaurants and private members clubs. MacKinnon joined the Worshipful Company of International Bankers and the executive board of the Special Olympics. He and Dupont set up about a dozen companies between them, focusing on industries such as renewable energy.

Dupont and MacKinnon said in their e-mail to Bloomberg that they “never made, or introduced investments to projects that are purely driven by tax breaks” and that at the time they got involved in renewables there weren’t any tax incentives in place. Morgan, who left the firm, didn’t respond to a request for comment.

By 2011, Sarao had trebled his assets to 42.5 million pounds. He agreed to become an investor in an Isle of Man-based entity called Cranwood Holdings, set up to acquire land in Scotland that would one day house wind farms, according to two advisers to Sarao. Documents on the enterprise filed in the British dependency are light on detail, but the advisers say Sarao put about 12 million pounds in Cranwood—money they say Dupont and MacKinnon could access.

Dupont and MacKinnon said in their e-mail that Sarao conducted “substantial independent due diligence” before investing in Cranwood and that he approved all of its payments. One of their companies, Wind Energy Scotland, is funded by and provides project management services to Cranwood.

The pair also acted as agents for more exotic ventures, such as sending divers to search shipwrecks for sunken treasure. The returns on offer were never less than impressive. Sarao, who told acquaintances he harbored aspirations of becoming a billionaire, invested in several. All were tame compared with what came next.

Sometime in 2012, Sarao was introduced—again through Dupont and MacKinnon—to a squat, intense Mexican named Jesus Alejandro Garcia Alvarez, who was looking for investors for his company IXE Group. Garcia said he was the scion of a family of billionaire landowners and industrial-scale farmers with swaths of land around the world. He had arrived in Zurich from Latin America a few years earlier and had been working hard to build a reputation ever since.

IXE was conceived as a one-stop shop for high-net-worth individuals, offering services ranging from asset management to event planning to advice on private schools. Then, around the time Sarao met Garcia, the company’s website underwent a radical overhaul. Gone were the concierge services. IXE was henceforth a “conglomerate of companies worldwide” involved in “agribusiness, wealth management, commodity trading and venture capital.”

Articles appeared in the Swiss media profiling the mysterious young man making waves among Zurich’s business elite, including pictures of Garcia wearing a poncho over his suit, arm outstretched across Bolivian salt plains he said he owned. One newspaper put him on its annual rich list. Garcia was invited on Bloomberg TV to talk about his family’s quinoa interests, then on CNBC to discuss the “white gold rush” for lithium.

Garcia had all the trappings of a successful entrepreneur: half a dozen sports cars, a small but well-appointed office in the center of Zurich, a glamorous Russian wife. He even joined the Swiss board of the Robert F. Kennedy Center for Justice & Human Rights, an organization whose U.S. directors include Tim Cook and Martin Sheen.

Garcia flew to London and met with Sarao two or three times, according to people with knowledge of the matter. In an interview on IXE’s website, Garcia laid out his pitch to investors: “We are offering alternative investment vehicles that provide constant returns to investors. The investment in real economy makes the advantages obvious—investors are benefiting from constant returns generated from actual transactions with zero speculation and zero volatility.”

Garcia told Sarao he would get an annual 11 percent return, the people said, and assured Sarao that any money he handed over would be used only as collateral, not put at risk. He also introduced Sarao to Swiss banking contacts, they said. The trader was again restructuring his business, this time around an Anguilla-based vehicle called International Guarantee Corporation.

Sarao did some due diligence about IXE, according to one adviser, but he seems to have overlooked a few red flags: The company website is littered with spelling mistakes, and several executives are members of Garcia’s family.

Garcia initially agreed to meet to discuss this story, then opted to respond to questions through a colleague at IXE. The colleague, Dominic Forcucci, wrote in an e-mail that Garcia hadn’t done anything improper and that IXE “properly disclosed the risks of investments” to Sarao. A lawyer representing Garcia, William Wachtel, later said that Garcia described any allegations against him as “baseless and without merit.”

On Aug. 20, 2012, documents show, Sarao agreed to give about $17 million to Garcia and his company—by far his biggest investment and a substantial chunk of his net worth. He later invested an additional $15 million, according to a person with knowledge of the matter. Even though they’d met on only a handful of occasions, he would describe Garcia to associates as a friend.

Sarao may have been particularly trusting, but he wasn’t alone in buying into the IXE miracle. Former employees interviewed by Bloomberg describe Garcia as charming and, on first meeting, impressive. He offered commissions to third-party agents to send prospective investors his way, ensuring a steady stream of business and creating a buzz around the firm.

In 2014, Garcia signed a deal to acquire Banca Arner, a Swiss lender in decline after allegations that it had helped former Italian Prime Minister Silvio Berlusconi hide money. To coincide with the transaction, Arner’s new marketing chief, Garcia’s wife Ekaterina, issued a press release announcing it had appointed a new chairman: Michael Baer, a great grandson of the founder of private bank Julius Baer Group and a respected figure in Swiss banking.

IXE just needed sign-off by Switzerland’s financial regulator, Finma. In order to seal the deal, Finma told Garcia he’d have to come up with 20 million Swiss francs ($18.7 million) in capital and account for where it came from. After heated meetings with the regulator and the owners of Arner, Garcia offered to hand over the money in unmarked gold, according to two people with knowledge of the talks. Without a stamp, the gold was unacceptable to the regulator, and in the end Garcia walked away from the deal, leaving Baer and a raft of other new recruits frustrated and embarrassed, the people said. Baer and a spokesman for Finma declined to comment.

For the time being, though, Sarao had no cause for concern. IXE sent him periodic statements showing the interest accruing in his accounts. As ever, he was happy to let it sit there and grow.

By then, Sarao’s readiness to consider almost any opportunity that offered an attractive rate of return was well-established. After another strong year in 2013, Dupont and MacKinnon introduced him to Damien O’Brien, a physically imposing Irish entrepreneur with aspirations to revolutionize the online-gaming industry.

The unique selling point of O’Brien’s company, Iconic Worldwide Gaming, according to a pitch document seen by Bloomberg, was that it allowed gamblers to bet on movements in currencies and securities using an interface that looked like an online casino, with a roulette wheel and buttons for “higher” and “lower” instead of red and black. The patented software was called MINDGames, short for Market Influenced Number Determination games.

The concept may not have pleased Gamblers Anonymous, but the financial projections were enticing. O’Brien predicted in the pitch document that Iconic would go from a standing start to a cash balance of 110 million pounds by the end of its third year. There were also some reassuring names on the board: Robin Jacob, a U.K. appeals court judge, and David Michels, a former deputy chairman of Marks & Spencer.

In July 2014, documents show, Sarao invested 2.2 million pounds in Iconic. Cranwood Holdings extended loans of an additional 1 million pounds, according to one Sarao adviser. He was, several times over, the largest investor in the company.

Dupont and MacKinnon said in their e-mail that Sarao was an experienced gambler and trader who conducted his own due diligence on the gaming sector before investing. They also said they objected when Sarao told them he planned to lend money to Iconic. O’Brien didn’t respond to requests for comment. Jacob and Michels said they were no longer board members.

In the months following Sarao’s investment, O’Brien went on a campaign to increase Iconic’s profile. The company sponsored World Touring Car Championship driver Rob Huff and filmed a slick advertisement with mixed martial arts superstar Conor McGregor. O’Brien and his employees were photographed ringside or wining and dining clients. In one shot taken in Las Vegas and posted on Twitter, a line of promo girls posed in matching uniforms with Iconic logos emblazoned on their hot pants. In another, O’Brien stood next to a matte-black Rolls-Royce with the license plate DAMI3N.

By the time Sarao was arrested in April 2015, he had about $50 million tied up in investments around the world, according to people with knowledge of the matter who even now aren’t positive it’s all accounted for. It was only as his lawyers tried to recoup the money that he was forced to face up to the possibility that it was gone. Sarao was released that August after his parents put up the family home as collateral against the bail of 50,000 pounds.

In November of last year, following an unsuccessful extradition fight, Sarao flew to Chicago where he pleaded guilty to one count of wire fraud and one of spoofing, which entails placing bids or offers with the intention of canceling them before they’re executed. He was ordered to pay $38.4 million to the CFTC and the Justice Department, which determined that, of the money he made by day trading, only $12.8 million came from cheating the market.

Sarao is scheduled to find out the length of any custodial sentence later this year. In the meantime, he has been allowed to return to Hounslow, where he is banned from trading and, despite pushing 40, placed under the care of his father.

Sarao’s lawyers are no closer to getting their hands on the money beyond about 5 million pounds seized from his trading accounts after his arrest. The CFTC and the Justice Department have joined them in the hunt, according to people close to the situation. The agencies could try to compel banks holding Sarao’s assets to give them up, but that might not be easy because most of the money is outside the U.S. Spokesmen for the CFTC and the Justice Department declined to comment, as did Burlingame, a former Justice Department prosecutor who represents U.K. targets in U.S. investigations.

IXE told Sarao it would return the cash in instalments in 2015 and 2016, according to a person familiar with the matter. The deadlines came and went, but no money has been produced. Garcia is rarely seen driving his sports cars around Zurich anymore, according to former associates. In October, German magazine Brand Eins skewered what it portrayed as his outlandish claims about plots of land in Bolivia and Mexico and linked Garcia to Burton Greenberg, who’s serving eight years in a Florida prison for fraud.

Former IXE employees interviewed by Bloomberg say that Garcia spent whatever he brought in to fund his own lavish lifestyle and that projections he gave in presentations to Sarao, Baer and others were plucked out of thin air. Still, Garcia’s efforts to acquire a bank continue. In August, IXE announced it was buying Private Investment Bank in the Bahamas from Swiss firm Banque Cramer & Cie. The deal is scheduled to be completed this month.

Garcia hasn’t been accused of any wrongdoing. Forcucci, the IXE spokesman, said the company is “working to return the money in a fair and equitable manner to its investors.”

Iconic went into liquidation in January 2016. A company hired to advise it on resale options said O’Brien had underestimated the cost of breaking into the online gaming market by about 10 million pounds.

Sarao’s lawyers have been unable to retrieve his investments in Cranwood despite repeated requests, owing to its convoluted offshore ownership structure, according to a person with knowledge of the situation. Dupont and MacKinnon said in their e-mail that Wind Energy Scotland has been working to get funds to Cranwood.

From their base in Berkeley Square, the pair last year started another company focused on renewable energy, Celtic Asset Management, which offers “access to a substantially higher return profile, with less capital at risk.”

Meanwhile, Sarao is back in his bedroom. The computer that got him into so much trouble is gathering dust in a Washington evidence room. Depending on how much the authorities are able to recoup, he will probably spend the rest of his life paying back the money he owes. If they really want it, they could always lift the trading ban, one associate quips: He’d make it back in no time.