Financial watchdog tells court of potentially huge fraud Council homes in Blyth set to be demolished

WEALTH MANAGER IS BEING INVESTIGATED FOR SUSPECTED MISCONDUCT

A NORTH East wealth manager is being investigated by the financial watchdog which told a court it considers his suspected misconduct to be potentially “one of the largest frauds perpetrated by an FCA regulated individual at an authorised firm”.

According to High Court documents, the Financial Conduct Authority alleges that WealthTek founder John Dance received and diverted tens of millions of pounds of client money to his own personal bank account and that he “dishonestly concealed” that his firm had been holding client money when it was not authorised to do so.

The papers also show the watchdog alleges Mr Dance, who was at the helm of the firm which also traded as Vertem Asset Management and Malloch Melville, had failed to declare his bankruptcy six years ago.

The claims come as a High Court judge recently granted the FCA a pause in civil action against WealthTek and Mr Dance in order to focus on suspected criminal offences.

The Tyneside firm was closed down last April and placed in a special administration amid regulatory breaches and concerns about fraud and money laundering. A shortfall of £80m in client money and assets was then discovered.

Now, witness statements from an FCA manager include allegations that the scale and extent of Mr Dance’s suspected misconduct had become more serious as the regulator’s investigation progressed since last April.

Statements from the FCA’s Anthony Williams say Mr Dance is alleged to have funnelled about £49m of client money to his personal bank account and other companies with which he is associated.

Mr Williams’ statement also included reference to “the discovery of earlier misconduct, with suspicious flows of client money and assets of about £21m from WealthTek to Mr Dance in the period between 2014 and 2020”.

A statement submitted by

NORTHUMBERLAND County Council are set to press ahead with plans to demolish more than 100 ‘low-demand’ council homes in Blyth.

The 65 flats and 38 maisonettes will make way for newer, more energy-efficient housing.

At Tuesday’s meeting of the council’s cabinet, it was explained that there was limited demand for the one-bedroom homes.

Despite the fact that there are

Christopher Hollyoak, also of the FCA, alleges Mr Dance used apparently forged documents to dupe CACEIS Bank into thinking WealthTek had permissions to hold client money, when it did not.

He also said Mr Dance had “deliberately misrepresented to clients and prospective clients” that their money was being held by that same bank on their behalf - in line with FCA rules.

In November last year a criminal restraint order (CRO) was obtained against Mr Dance under the Proceeds of Crime Act. That measure toughened up a freezing of £40m of assets owned by Mr Dance but allowing him to claim reasonable living expenses, and amongst other things, cover about £500,000 of High Court costs.

The year-long pause granted to the FCA is intended to give it time to further investigate potential criminal offences. The watchdog has said that during this time it expects to be able to decide more than 4,000 people on the council’s housing register, many of the homes are standing empty.

There is much more demand for two, three and four-bedroom houses and bungalows.

The affected streets were not named but existing tenants will be informed of the proposals now that the decision has been made.

Any residents will be awarded home loss and disturbance payments if they have to relocate. whether or not to bring criminal charges.

Meanwhile, out-of-pocket former WealthTek customers have been told by the Financial Services Compensation Scheme that they could receive payouts up to the value of £85,000.

Mr Dance opposed the FCA’s application on the grounds that “there would be considerable prejudice to Mr Dance because he would be unable to address properly the FCA’s allegations, which are of the utmost seriousness and concern Mr Dance’s honesty and alleged conduct”, the documents show.

The issues surrounding WealthTek first came to light when a racehorse co-owned by Mr Dance was withdrawn from a race following contact between the FCA and the British Horseracing Authority.

A few weeks later, a city centre nightclub Mr Dance part-owned in Newcastle went into administration.

Speaking at the cabinet meeting, portfolio holder for housing Coun Colin Horncastle admitted that a report on the issue was “negative”.

However, he added that this referred to the properties and not the tenants. He continued: “There is very, very low demand and a lot of these homes are standing empty causing a lot of anti-social behaviour. Nobody wants these properties now, they don’t serve a purpose.