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HBOS con artists convicted for corruption that financed holidays and sex parties

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  • 31/01/2017
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Two former HBOS managers, a financial consultant and his associates have been convicted of corruption, fraudulent trading and money laundering at HBOS, formerly the UK’s largest mortgage lender.

With the lead of ex-senior banker David Mills, 60, and HBOS employee Lynden Scourfield, 54, the group compensated themselves with hundreds of millions of pounds and enjoyed lavish lifestyles while destroying businesses in the process and leading HBOS to incur losses of £250m. Another HBOS manager, Mark Dobson, also played a part in the crime, which saw him receive £30,000 in kickbacks from Mills.

Many of the businesses advised by Mills and loaned money by Scourfield went into liquidation resulting in job losses, financial hardship, marital breakdowns, the loss of their homes and serious ill-health.

Scourfield, who headed up a department at HBOS based in Reading, advised businesses suffering from financial difficulties. He agreed loans to a portfolio of clients on the basis that they use the service of Mills who ran Quayside Corporate Services, a business based in Bishopsgate, London, that dealt with similar customers. The businesses were then advanced large sums of cash which they could not afford to repay, while Mills and his associates – his wife Alison, Michael Bancroft, and Tony Cartwright – received extortionate fees for their consultancy services.

Scourfield approved loans to companies already deemed impaired without approval of a senior HBOS manager. The businesses were then sold Mills’ services under the pretension that this would help them get back into profit. In some cases the consultancy were able to take over the running of the ailing firms for their own benefit.

Bribes paid to Scourfield by Mills amounted to several hundreds of thousands of pounds, while the HBOS employee was also gifted lavish hospitality, expensive foreign holidays to Thailand and Barbados and parties involving prostitutes.

Stephen Rowland, specialist prosecutor from the Crown Prosecution Service Specialist Fraud Division, said: “Many people have had their lives ruined by the corrupt behaviour of Lynden Scourfield, David Mills and their associates.

“Scourfield worked in a section of his bank which was supposed to help struggling businesses but instead, motivated by greed, he went about stripping them of their assets.

“This was a complicated prosecution due to the volume and complexity of the financial transactions and the large sums of money involved. But in the end thanks to the work of prosecutors and investigators the jury were left in no doubt that the actions of these six defendants were criminal.”

The group’s crimes were uncovered by a six-year investigation called Operation Hornet carried out by Thames Valley Police’s economic crime unit. The scam came to light in 2006 when a new senior manager at the bank asked to check Scourfield’s previous loan applications.

Receiving their convictions at Southwark Crown Court, Mills was found guilty of corruption, fraudulent trading and money laundering, while Scourfield pleaded guilty to the same offences. Mills’ wife and the remaining associates have also been found guilty of similar offences, with just one, Jonathan Cohen, acquitted for offences.

HBOS manager Dobson was also found guilty for his role in the scam, which saw him gifted £30,000 by Mills for recommending high-risk clients to the businessman.

A spokesperson for Lloyds Banking Group said: “We recognise that those impacted by these crimes go beyond just the bank and that customers of the former HBOS Reading Impaired Assets team may have concerns about the involvement of Quayside Corporate Services Limited with their businesses. Whilst we have fully reviewed customer concerns raised previously, we will review any new concerns on a case-by-case basis taking into account any relevant new information from the trial.

“The trial highlighted criminal actions that bear no reflection on the behaviours of the vast majority of the employees of HBOS at the time or in the Group today.”

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