When a court makes a confiscation order against a Ponzi scheme fraudster, the money recovered can be used to compensate victims. That does not mean every victim receives everything they lost. In many investment fraud cases, the court can only distribute the assets that investigators have found and recovered.

Confiscation orders are made under the Proceeds of Crime Act 2002. The court looks at what the offender gained from crime, then looks at what they can actually pay. If there is also a compensation order for victims, and the offender cannot pay both, the recovered money can be directed towards compensation first.

The difficult part is the size of the pot. In a Ponzi scheme, much of the money is often spent, moved or used to pay earlier investors before anyone is caught. That means the amount available for victims can be far lower than the total stolen.

A recent example

In June 2026, the Financial Conduct Authority secured a confiscation order against Daniel Pugh, a convicted fraudster behind a £1.3 million investment fraud. He had used Facebook adverts to target investors and promised unrealistic returns from trading across different markets. The FCA said only 19% of the funds collected from investors were ever traded, and the scheme was in effect a Ponzi scheme.

At Southwark Crown Court on 5 June 2026, Pugh was ordered to pay £452,286.80. That figure represented the total value of assets the court found available for recovery. The FCA said the funds would be used to compensate victims. If Pugh does not pay within 3 months, he faces a default prison sentence of up to 4 years and 9 months.

The case shows why victims should be realistic. A confiscation order can help, but it is not the same as a full refund guarantee. Many people first meet schemes like this through fake investment platforms that look entirely legitimate.

How the money reaches victims

The court first calculates the offender’s benefit from crime. It then decides the available amount, which is the value of assets the offender can realistically pay. Victims are compensated from that available amount, not necessarily from the larger total benefit figure.

If there is one victim, the money recovered may go to that person. If there are many victims, which is common in a fake broker scheme, the money is usually divided between them. This can mean that two victims who each lost £40,000 receive only a fraction of that amount back.

Victims usually need to be identified and registered before compensation is distributed. In the Pugh case, the FCA made a final call for any remaining victims to come forward by 30 June 2026. That is why it is important to respond quickly to investigators, the FCA, police or any official receiver handling the case.

Why payment can take time

A confiscation order does not always mean money arrives straight away. The offender may be given time to pay. Assets such as property, vehicles, investments or business interests may need to be sold. If assets are hidden or disputed, the enforcement process can take longer.

Default prison time can put pressure on the offender to pay, but it does not create new money for victims. If the assets are not there, the final payment can still be limited.

While that process continues, it helps to understand whether you can recover money sent digitally through other routes. Confiscation is one track, not always the only one.

What else you can do

If you paid by bank transfer, you may be able to raise a claim with your bank under authorised push payment fraud rules. If cryptocurrency was involved, keep strong crypto recovery evidence, including wallet addresses, transaction hashes, exchange records and screenshots.

Be careful of recovery room scams, where a second fraudster claims they can retrieve your money for an upfront fee. No genuine adviser should guarantee recovery or pressure you into paying quickly.

Working out how much compensation to claim is easier when your documents are organised. A scam recovery service can help you gather bank records, register your loss with the relevant investigation and explore parallel complaint routes.

Beyond fraud, Claim First also handles mis-sold PCP finance claims, payday loan refund claims and housing disrepair compensation. You can also read more about confiscation and victim compensation through the Crown Prosecution Service, or check enforcement updates from the Financial Conduct Authority.

Frequently asked questions

Will a confiscation order pay back all my losses?

Not always. You are paid from what the court can recover, which is often less than the total stolen.

How long does compensation take?

It varies. Payment can take months or longer if assets must be sold or victims need to be identified.

What is the difference between a confiscation order and a compensation order?

A confiscation order removes the offender’s criminal proceeds. A compensation order directs money back to victims.

Do I need to register as a victim?

Yes. Contact the relevant authority and confirm your loss before any deadline.

Take the next step

If you lost money to a collapsed investment scheme, register your loss early and gather your evidence now. Start your scam recovery claim with Claim First and let us help you pursue every route to compensation that applies to you.