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FCA: Gopee found guilty of acting as an illegal money lender

  • 08/02/2018
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FCA: Gopee found guilty of acting as an illegal money lender
The jury at Southwark crown Court found Dharam Prakash Gopee guilty today after regulator the Financial Conduct Authority (FCA) brought criminal charges for his money lending activities to often vulnerable borrowers.

Gopee operated a money lending business from August 2012 to December 2016 without a consumer credit licence from the Office of Fair Trading or authorisation from the regulator.

Gopee described himself as “a lender of last resort” to consumers and regularly registered charges over the homes of borrowers to enable him to take possession of a property if the borrower failed to pay the debt.

The FCA confirmed it has acted under the Consumer Credit Act 1974 and the Financial Services and Markets Act 2000.

Gopee agreed 147 new credit agreements with consumers for up to £1,000,000 over a four-year period. He ran his business, collected loan payments and registered charges over consumers’ properties and pursued court actions for money judgements and for possession.

The accused invented a complex new type of agreement for his lending which the prosecution alleged was ‘simply a work of fiction.’


The ‘deal’

Under this agreement, consumers would purportedly sell their home for the value of the loan, often as little as £2,000 – £5,000, to one of Gopee’s companies. Another company owned by Gopee then thtold customers he loaned the purchase money to the first company to finance the transaction. The consumer was given a licence to remain at the property on the condition that they pay the monthly liability under Gopee’s inter company loan. In this way, Gopee claimed he was not entering into consumer credit agreements directly with consumers.

None of the consumers who gave evidence in court understood or believed that they were selling their home in order to obtain the loans that they were seeking, said the FCA.

Two and a half years after he began money lending, Gopee wrote to the FCA on behalf of two of his companies in January 2015 in an attempt to obtain a confirmation from the authority that his practice did not need to be regulated.

Mark Steward, director of enforcement and market oversight at the FCA, said: “Unauthorised money-lending is a criminal offence and causes serious harm, often to vulnerable communities. Mr Gopee’s actions showed utter contempt for the law. The FCA will continue to take whatever action is necessary to stop this misconduct.”

Gopee will be sentenced on Friday 9 February 2018.

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