Lloyds tried to gag HBOS fraud victims

Bank demanded they sign secrecy deals to receive compensation

VICTIMS of a huge fraud were pressured into signing gagging agreements by Lloyds Bank, fuelling claims of a cover-up.

Criminal bankers led by Lynden Scourfield wrecked family businesses between 2002 and 2007, with the proceeds spent on prostitutes, holidays and luxury goods.

The crooks – who worked out of the Reading branch at HBOS, which was bought by Lloyds in 2008 – were jailed for a total of 50 years in February. But victims claim their efforts to expose the disaster were blocked at every turn, with cash payments offered to stop them speaking out.

Those offered a deal for their silence include Paul and Nikki Turner, whose music publishing company was destroyed by Scourfield. They began investigating fraud claims a decade ago.

As early as September 2007, the Turners had passed on allegations that Scourfield and others were funding sex parties with their illgotten gains.

However, the Turners were told on several occasions that their claims were untrue. The Turners ran into financial difficulties because of the fraud and the two lenders tried to evict them from their home on 22 separate occa- sions. In 2009, MPs representing victims met Philip Grant, then chief operating officer at Lloyds’ corporate division, according to documents seen by the Mail.

He told the MPs that none of their constituents had ‘a legitimate claim for compensation’ and there was no evidence the bankers had destroyed companies that were not already going under.

However, he offered to pay £65,000 to the Turners’ business ‘as a gesture of goodwill’ – as long as they agreed to a confidentiality clause which would prevent them speaking out in future.

The Turners refused. In response, Grant wrote to the family to say the bank would ‘ take steps’ to take their house away. There is no suggestion that Grant, who still works for Lloyds, did anything wrong.

It was reported yesterday that the bank also gagged TV star Noel Edmonds’ former business partner Paul Pascoe. Edmonds claims their firm, Unique, was deliberately destroyed by Mark Dobson, one of the Reading fraud gang, and is suing Lloyds for £300m.

Lloyds has pledged to compensate victims of Scourfield’s gang.

A spokesman said the allegations would be addressed during the legal process, and that 60pc of victims had been offered payouts, adding: ‘The group is determined to get to the bottom of what went on, and a thorough investigation is being conducted.’