Edmonds asserts that HBOS and its former employee, Mark Dobson, were behind the collapse of his business Unique Group 10 years ago.
In a letter to the Lloyds chief executive, António Horta-Osório, his lawyers allege that he ‘suffered immense economic loss’ and ‘distress and inconvenience’ at the hands of its Berkshire branch.
Edmonds said: “I confirm my lawyers have sent a detailed claim letter seeking compensation from Lloyds for the losses that I suffered as a result of fraud committed against me by one of its managers.
“I am now trusting that Mr Horta-Osorio is true to his word and ensures that I am ‘fairly, swiftly and appropriately’ compensated for both the destruction of my businesses and the significant damage to my reputation. If he is not, then I will pursue my claim against Lloyds via the courts.”
Last month Lloyds Banking Group confirmed plans to provide around £100m compensation to victims of the HBOS corruption scandal as part of its customer review process. Edmonds is thought to be one of the 64 customers in the review.
The bank has already written off about £250m of fraudulent loans made in the scandal, which in February saw six people, including two former HBOS employees, being jailed for a combined 47 years and six months.
The scandal involved two former HBOS managers, a financial consultant and his associates who were convicted in January this year for corruption, fraudulent trading and money laundering at HBOS, formerly the UK’s largest mortgage lender.
Ex-senior banker David Mills, 60, and HBOS employee Lynden Scourfield, 54, mis-directed indebted companies to a fraudulent advisory service, paid themselves millions of pounds and enjoyed lavish lifestyles and incurred HBOS £250m of losses.
Another HBOS manager, Mark Dobson, the banker named by Edmonds in his case, also played a part in the crime, which saw him receive £30,000 in kickbacks from Mills. He has subsequently been jailed for four and a half years.
Scourfield, who headed up a department at HBOS based in Reading, agreed loans to struggling business clients on the basis that they use the service of Mills who ran Quayside Corporate Services, a business based in Bishopsgate, London.
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 consultancy services.
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.
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.
Regulator the FCA has since restarted its own investigation into the case after freezing the case in 2013 after Thames Valley police intervened.
A statement from the FCA read: “The FCA’s investigation is focusing on the extent and nature of the knowledge of these matters within HBOS and its communications with the Financial Services Authority after the initial discovery of the misconduct.”
Lloyds Bank said that following the conclusion of the criminal trial, it would provide ‘fair, swift and appropriate’ compensation for the victims.
Professor Russel Griggs was appointed as the Independent Customer Reviewer in consultation with the Financial Conduct Authority (FCA) to review customer detriment.
The bank said that although the customer review was in its initial stages, to provide additional help to those impacted customers, it would:
• Provide interim payments on a case-by-case basis to assist victims in financial difficulty with day-to-day living costs;
• Cover reasonable fees for professional advice whilst in the Professor Griggs’ review to enable customers to access appropriate legal and financial advice;
• Write off customers’ remaining relevant business and personal debts currently owed to LBG, where they were victims of the criminal conduct, and not pursue them for any repayment;
It added that it had already suffered losses or provided for at least £250m of credit losses in relation to those impacted cases at HBOS Reading in previous financial periods.
