Forensic Investigation Uncovers Business Loans Corruption

Following a large-scale investigation into corruption, fraud and money laundering at a high street bank, which took over two years to come to fruition, Thames Valley police have charged eight people, including two former senior managers at HBOS.

Allegations, which were reported under privilege in the House of Commons as long ago as June 2009, surfaced that a banker at HBOS’s high risk lending unit in Reading was working with a consultancy called Quayside, to strip assets from financially troubled customers of the bank.

Consequently, investigative accountants from the ECU were called in and the trail led to a series of allegedly fraudulent business loans made through the bank to a value of around £35m, although some connected with the case believe that the final tally could be much higher.

The investigation centred on allegations that the lending unit forced clients to use adviser Quayside Corporate Services to receive further funding and many firms that used Quayside complained that they were crippled by exorbitant fees, which forced several of them into administration.

Allegedly, the two bankers were given numerous high-value gifts by the financial consultancy in return for appointing the firm to administer bank loans to the struggling companies.

Among those charged are the two former senior managers at HBOS, Lynden Scourfield and Mark Dobson, while David Mills and Michael Bancroft of Quayside Corporate Services have also been charged, along with a fifth man, John Cartwright. The other defendants are three of the men’s wives, Jacqueline Scourfield, Alison Mills, and Beverley Bancroft.

The charges come only a month after Lord Stevenson, former Chairman of the collapsed bank, was accused by MPs of being “either delusional or dishonest”.

HBOS had to be rescued in 2008 through a Government-engineered takeover by Lloyds Banking Group which weeks later, had to ask for a £20bn Government bailout.

As an accountant; Roger Isaacs specialises within forensic accounting.

Posted in Blog, The Forensic Blog.