Lloyds chiefs ‘covered up Wolves of Wall St fraud for ten years’
‘Disgraceful treatment’
A FRAUD that wrecked dozens of businesses was covered up by bosses at Lloyds and HBOS for nearly a decade, a police commissioner has claimed.
A gang of criminal bankers at the Reading branch of HBOS, led by Lynden Scourfield, used a loan scam to deliberately destroy firms they were employed to save.
Dubbed ‘Britain’s Wolves of Wall Street’, they plundered the businesses to enjoy a lifestyle of luxury goods, holidays on a superyacht and sex parties with prostitutes.
Scourfield, another ex-HBOS banker and four associates including David Mills and Michael Bancroft were jailed for a total of 47 years in February for fraudulent trading, corruption and money laundering.
Lloyds, which bought HBOS during the 2008 financial crisis, has always insisted it knew little about the fraud until an investigation by Thames Valley Police.
But the force’s commissioner Anthony Stansfeld says he has evidence showing bosses knew about it as early as 2008.
He believes senior bankers let families’ livelihoods go to the wall rather than call in police for fear of adverse publicity. Thames Valley Police is understood to looking into other allegations in relation to the HBOS case.
The claims will pile pressure on Sir Victor Blank, who was Lloyds’ chairman at the time, and then chief executive Eric Daniels. Both have always insisted they did not realise the extent of what was going on.
Mr Stansfeld says he has an internal email from the bank’s risk department that proves senior staff were aware of what had happened. He is particularly angered by the fact that victims appeared to have been pursued by Lloyds for money they owed even after bosses allegedly knew the details.
Some entrepreneurs lost their homes because they had signed personal guarantees putting their property on the line if their companies failed.
‘The cover-up went on for ten years,’ Mr Stansfeld said yesterday. ‘An internal email in February 2008 within the risk department of HBOS clearly says that a major fraud had taken place within the Reading branch of HBOS, and that at least £200million had been defrauded from HBOS customers.
‘Yet despite this evidence, the board of Lloyds… continued to refuse to accept that a fraud had taken place and pursued the victims.’
Mr Stansfeld said details of the alleged cover-up came to light only thanks to the victims and Lloyds whistle-blowers, who had been subjected to ‘disgraceful’ treatment by the bank.
The bank denies mistreating whistle-blowers, and said Mr Stansfeld was referring to a single report by an ex- employee that ‘contains many unsubstantiated allegations’.
Lloyds has set aside £100million to compensate victims, although Mr Stansfeld said this would not be enough. The bank has also launched an internal investigation, led by retired judge Dame Linda Dobbs.
The Financial Conduct Authority is also investigating.