‘The longest and most complex case in the history of Thames Valley Police’: Six convicted of multi-million pound fraud

Police

Police

Six people have been convicted of corruption, fraudulent trading and money laundering following an investigation by Thames Valley Police that lasted more than ten years.

Five people, four men and a woman, have been convicted today (Monday), after being found guilty at Southwark Crown Court of corruption, fraudulent trading and money-laundering offences.

One man was acquitted and another man was convicted at an earlier hearing after pleading guilty.

The convictions are the result of one of the largest fraud investigations of its kind in the UK.

Those involved created a network of associations where legitimate struggling businesses were exploited by their bank managers who directed them to employ the services of expensive external consultants in return for bank loans.

The fraud resulted in these offenders profiting from hundreds of millions of pounds at the expense of businesses and a high street bank and its customers.

Those convicted today are:

David Mills, aged 60, of Todenham, Moreton-in-Marsh, Gloucestershire, who was found guilty of:

One count of conspiracy to corrupt between 1 April 2003 and 29 September 2010.

Four counts of fraudulent trading between 1 April 2003 and 30 September 2007 with regards to Clode Group, Frank Theak and Roskilly Ltd/Magenta Studios, MSG and Remnant Media

One count of conspiracy to conceal criminal property (‘money laundering’) between 1 April 2003 and 29 September 2010

His wife, Alison Mills, aged 51, of Todenham, Moreton-in-Marsh, Gloucestershire, who was found guilty of:

One count of conspiracy to conceal criminal property (‘money laundering’) between 1 April 2003 and 29 September 2010

She was also acquitted of one count of fraudulent trading between 1 April 2003 and 30 September 2007 with regards to Clode Group

Michael Bancroft, aged 73, of Ilmington, Shipston-on-Stour, Warwickshire, was found guilty of:

One count of conspiracy to corrupt, between 1 April 2003 and 29 September 2010

Three counts of fraudulent trading between 1 April 2003 and 30 September 2007 with regards Frank Theak and Roskilly Ltd/Magenta Studios, MSG and Remnant Media

One count of conspiracy to conceal criminal property (‘money laundering’) between 1 April 2003 and 29 September 2010

Lynden (also known as Gerard) Scourfield, aged 54, of Whitton Avenue West, Greenford, Middlesex, pleaded guilty on 12 August 2016 to:

One count of conspiracy to corrupt, between 1 April 2003 and 29 September 2010

Four counts of fraudulent trading between 1 April 2003 and 30 September 2007 with regards to Clode Group, Frank Theak and Roskilly Ltd/Magenta Studios, MSG and Remnant Media

One count of conspiracy to conceal criminal property (‘money laundering’) between 1 April 2003 and 29 September 2010

Mark Dobson, aged 56, of Brayfield Terrace, London, was found guilty of:

One count of conspiracy to corrupt, between 1 April 2003 and 29 September 2010

One count of conspiracy to conceal criminal property (‘money laundering’) between 1 April 2003 and 29 September 2010

John Cartwright (also known as Tony) aged 72, of Knott Lane, Hyde, Cheshire, was found guilty of:

One count of fraudulent trading between 1 April 2003 and 30 September 2007 with regards to MSG

One count of conspiracy to conceal criminal property (‘money laundering’) between 1 April 2003 and 29 September 2010

He was acquitted of a further count of fraudulent trading between 1 April 2003 and 30 September 2007 with regards Frank Theak and Roskilly Ltd/Magenta Studios

Jonathan Cohen, aged 57 of Dovecot Close, Pinner, Middlesex, was acquitted of:

One count of fraudulent trading between 1 April 2003 and 30 September 2007 with regards to Clode Group

One count of conspiracy to conceal criminal property (‘money laundering’) between 1 April 2003 and 29 September 2010

They were all charged in 2013 as part of a complex six year investigation by the force called Operation Hornet which was carried out by the force’s Economic Crime Unit (ECU).

The case was originally referred to Thames Valley Police by the Financial Services Authority (FSA) because the offences originated from the Impaired Assets team of Halifax Bank of Scotland (HBOS) based in Reading.

From 2002 to 2007, Lynden Scourfield worked as a senior director at the high risk assets office of HBOS in Queens Road, Reading, handling business customers who were at risk of defaulting on their loans, and Mark Dobson was a director based at Bishopsgate in London working in a similar role.

Scourfield managed a portfolio of businesses for the bank to whom he agreed loans from the bank, on the condition that they would use an outside business consultancy with a view to helping them be restored to solvency.

His preferred consultancy was Quayside Corporate Services which was run by David Mills and employed both Michael Bancroft and Tony Cartwright.

In his role at the bank Scourfield was supposed to have all business loans approved by a senior HBOS manager – a so-called “second pair of eyes” but he did not.

He approved loans to companies that were already deemed ‘impaired’ or in trouble without senior manager sanction.

In order to receive these loans each business had to purchase the services of a business consultancy firm to help them get back into profit.

There were more than 200 of these ‘turnaround’ firms available to Scourfield to choose from, but he chose the one owned by David Mills.

Mills set up Quayside Corporate Services, as well as Keyside Developments, Sandstone Organisation, Knightingale Investments and Richard Paffard Consultants.

His wife, Alison Mills, was the co-director of many of these companies.

These consultancies would charge already struggling companies vast sums of money for their business advice.

These firms would have to pay back the loans and interest to the bank plus the consultancy fees and so inevitably would need to borrow more money from the bank to continue trading.

Lynden Scourfield agreed these loans without a “second pair of eyes” sanction.

This cycle of debt would continue past the point where it was likely the bank would get its money back.

Eventually the loans were written off by the bank as a loss.

It is estimated that at least £245 million of bank loans were written off in this way.

Through their investigation officers discovered that Lynden Scourfield had the use of an American Express card paid for by David Mills – the man to whom he sent the majority of his customers.

Lynden spent more than £31,000 on David Mills’ American Express card.

His purchases included nights at the exclusive Landmark Hotel in central London, first class flights, a cruise and luxury goods.

When asked in a police interview about what the bank would have thought of the shared credit card, David Mills admitted that HBOS would not have been “chuffed to bits”.

HBOS manager Mark Dobson was given £30,000 by David Mills whose consultancy firms were also recommended by Dobson for some of his high risk business customers.

Dobson joined Scourfield on a trip to Thailand to celebrate David Mills’ fiftieth birthday.

Scourfield was part of a 40-strong group of friends and family celebrating Alison Mills’ fortieth birthday in Barbados.

The fraudulent activity came to light in 2006 when Scourfield had a new senior manager at the bank who asked to check his previous loan applications.

The trial in this case began on September 12 2016 and lasted for more than four months.

Senior investigating officer Detective Superintendent Nick John said: “This has been the longest and most complex case in Thames Valley Police’s history.

“It was a triangle in which struggling companies would go to their bank for support and advice.

“The bank manager in charge of their accounts – Lynden Scourfield and Mark Dobson would bring in their associates as consultants.

“Instead of offering advice and support these consultants including David Mills and Michael Bancroft would then take millions out of these companies by various means to fund lavish lifestyles.

“These consultants would also offer kickbacks and gifts to the bankers, including Lynden Scourfield, as a reward for recommending them and for continuing to lend the bank’s money to these struggling companies.

“I hope that this case offers closure and justice to the victims of this organised crime group.

“These are normal hard-working people who have had their lives and their livelihoods ruined by this.

“I would like to thank the jury for their professionalism and dedication to the trial and listening to the huge volume of evidence that had to be heard and examined over this six month trial.

“I also want to congratulate the Crown Prosecution Service, the prosecution team and of course Thames Valley Police’s Operation Hornet team for successfully bringing this mammoth case to trial after a six and a half year long investigation.”

Reacting to the verdict Thames Valley Police and Crime Commissioner Anthony Stansfeld said: “Thames Valley Police, together with the Crown Prosecution Service, has just completed the investigation and prosecution of one of the largest fraud cases it has ever undertaken.

“The sum of money lost by HBOS as a result of the actions of a corrupt senior employee and others was at the very least £250 million.

“He and his fellow conspirators embarked on a spending spree involving yachts in the Mediterranean, villas in Barbados and Majorca, prostitutes, overseas bank accounts, and a general high life.

“This has been at the expense of the shareholders of the bank, and many medium and small companies which have been bankrupted and ruined.

“Little will be recovered.

“There are three aspects that I find particularly shocking about this case: firstly the length and cost of the investigation, has resulted in the case taking over six years to bring to court, 151 police officers and staff tied up in the investigation, and at a cost of more than £7 million which has been borne by the householders of Thames Valley.

“However it is important to remember that this was not a victimless crime, the shareholders are largely pension funds, which most of us have a stake in, and companies which have been bankrupted, along with the livelihoods of their owners and employees.

“Secondly that a fraud of this size could have taken place either displays complicity or incompetence, a lack of corporate governance, complacency, and an absence of proper safeguards.

“An honest and efficient banking system is essential to the well-being of the country.

“It does not require more legislation and red tape, but it does require people to do their jobs properly and honestly.

“Banking is damaged when corruption occurs within it.

“Lastly, and almost the most disturbing, if Thames Valley Police had not taken on this case no one else would have, and the crime would not have been investigated. “The principal perpetrators would have escaped with their reputations intact and with enormous wealth.

“The cost in time and money for a police force to take on a major fraud investigation is considerable and a judgement has to be made whether the £7m spent on this case, and police officer time, could have been better spent in pursuing other crimes, such as child sexual abuse, and the multitude of lower scale frauds perpetrated against smaller companies and the elderly.

“If Thames Valley Police take on further cases of a similar nature it will again tie up a large number of police officers and staff.

“Yet if it is not prosecuted no one will be brought to justice.

“I have an uncomfortable feeling that other police forces are in similar positions.

“If a bank is physically raided then a huge police effort will go into bringing the bank robbers to justice.

“If it is raided by its own staff it may well be ignored.

“There needs to be an agreed policy that if a major fraud is committed, and the Serious Fraud Office does not have the capacity to take it on, then the police force that investigates it is reimbursed by central government, or through a fine or costs imposed on the auditors, the bank and the offenders involved.

“In this case there does not appear to be a way to recompense Thames Valley Police and the council taxpayers who part pay for their police force.

“The government should ensure that full restitution for the cost of prosecuting this case is made, and that every major fraud should be investigated.

“The entire budget of the Serious Fraud Office is only £44m a year, whilst for the City of London Police, who also investigate fraud, it is considerably less.

“When compared to a fraud of this size, then it is clear that far greater resources need to be made available to tackle the scale of the problem.

“The overall annual fraud and cyber-crime loss is put at nearly £200 billion.

“It affects everyone, from the elderly and the vulnerable, to small businesses and to the largest.

“Combatting fraud should be financed properly, and it should not be necessary for local police forces to take on cases of this size and complexity.

“Until this is done properly at a national level fraud will continue to be the largest financial crime in the UK, and the crime of choice for intelligent criminals.

“If ever there was a possible spend to save measure, financing the fight against fraud would be the most productive.

“I wish to congratulate the Thames Valley Police officers and staff who have pursued this case to a successful conclusion over the last six years.

“It has been an uphill struggle at times, and their persistence has been rewarded.”