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Categorized | Banks

Cash and sex lavished on banker, court told

Posted on September 27, 2016

(FILES) A Logo from the British bank HBO...(FILES) A Logo from the British bank HBOS are pictured in London, on March 20, 2008. The board of HBOS, Britain's biggest mortgage lender, will meet Monday April 28, 2008, to discuss a possible multi-billion pound rights issue due to the knock-on effects of the credit crunch, media reported Sunday. The firm, which declined to comment on the reports, will decide whether it will raise extra money from investors ahead of its annual shareholder meeting in Glasgow, Scotland and a trading update, both on Tuesday, papers said. AFP PHOTO/SHAUN CURRY/FILES (Photo credit should read SHAUN CURRY/AFP/Getty Images)©AFP

A senior HBOS banker accepted sexual entertainment on a “fairly frequent basis” and received weekly deliveries of cash in envelopes while entertaining women in a corporate flat, it was alleged at a London trial on Tuesday.

Lynden Scourfield, then lead director of the UK bank’s impaired assets division, was given expensive gifts and luxurious foreign travel after forming a “corrupt relationship” with David Mills, a business consultant, between 2003 and 2007, a jury was told.

    Mr Mills used his firm QCS to take over struggling businesses in the impaired assets division at HBOS, which is now part of Lloyds Banking Group. The ailing companies then received more HBOS loans and QCS charged “huge fees” for its services, Southwark Crown Court heard.

    HBOS, which was rescued by Lloyds in 2008, eventually wrote off £245m because of the alleged fraud.

    Mr Mills, 59, his wife Alison, 51, and four other individuals are on trial. They all deny wrongdoing. Mr Scourfield is not on trial.

    Brian O’Neill QC, prosecuting, told the trial that Mr Mills provided “huge” rewards to Mr Scourfield including cash, “inappropriately lavish hospitality” and “sexual encounters with high-class escorts”.

    “Sexual entertainment was provided to him [Scourfield] on a fairly frequent basis,” said Mr O’Neill.

    He told the jury they would hear of one occasion in 2005 when Terry Holligan, who worked for a company linked to Mr Mills, was sent to a corporate flat in London’s West End, with an envelope for Mr Scourfield. This contained an estimated £3,000 or £4,000 in cash, the court heard.

    Mr Holligan was told if Mr Scourfield was not at the flat, the envelope should be left in the “blue drawer” where Michael Bancroft, a co-defendant in the trial who was Mr Mills’ “man on the ground”, kept his Viagra, the trial heard.

    Mr Holligan delivered the cash to the flat and saw Mr Scourfield “wearing only a towel” with a woman coming out of the bedroom.

    He was later told it was “funny money for Scourfield to pay for girls”, Mr O’Neill told the court. He delivered envelopes on another two occasions and he was told Mr Bancroft usually delivered an envelope on Fridays to the flat, it was claimed.

    Michael Bancroft leaves Southwark Crown Court in London, where he is charged with conspiracy to corrupt, fraudulent trading and conspiracy to conceal criminal property in connection with a £245 million loan scam. PRESS ASSOCIATION Photo. Picture date: Monday September 26, 2016. See PA story COURTS HBOS. Photo credit should read: John Stillwell/PA Wire©PA

    Michael Bancroft leaves Southwark Crown Court

    The court also heard of two occasions when escorts were booked for Mr Scourfield, Mr Bancroft, 73, and others.

    On one occasion three women performed a show at a flat while the men watched but there was no sex. On a second occasion the court heard that one of the women recorded in her diary: “met guys, me, Amber and Suzie. Chinese meal. Then drinks at flat and quick shag. Easy £1500.”

    Another of the women recalls meeting three men and going to a “nearby flat where various sex acts took place”. One of the men was described as being a “Danny DeVito lookalike, short and bald . . .” Mr O’Neill told the court. He added the woman in question had later picked out Mr Scourfield in an identity parade.

    Mr O’Neill, prosecuting, told the trial that it appeared the evidence of the women was accepted as being “true and accurate as none of the defendants require any of them to attend for cross examination”.

    The women will not give evidence in the trial and instead their statements will be read out, he told the jury.

    The trial was also given details of the lavish spending on trips undertaken by Mr Scourfield. Mr O’Neill told the court that Mr Scourfield and his wife received almost £60,000 in “identifiable corrupt gifts in this way”.

    Mr Mills provided Mr Scourfield, who earned about £88,000 a year at HBOS, with his own American Express card. Some foreign trips were charged to one of the struggling companies in HBOS’s impaired loans division, the court heard.

    Mr Scourfield’s paid-for trips in 2004 and 2005 included travel to Florida, Mallorca, Mexico, Moscow, Munich, Bangkok, Chicago, Washington, Las Vegas and an all-inclusive Mediterranean cruise with his wife and David and his wife Alison Mills where they occupied the second most expensive accommodation on the ship.

    Analysis of Mr Scourfield’s bank accounts show unexplained income of £348,887 between 2004 and 2007, the trial has heard.

    Mr Scourfield is not on trial. Mr O’Neill has told the jury that they should not speculate about his absence from the trial or possible reasons for it.

    Mr Mills denies six counts including four of fraudulent trading. His wife Alison denies one count of fraudulent trading and one of money laundering.

    Mark Dobson, 55, a former senior banker at HBOS, denies counts of conspiracy to corrupt and money laundering.

    Mr Bancroft, QCS consultant, denies five counts including three of fraudulent trading.

    Jonathan Cohen, 56, of Hyde, Cheshire, at the time an accountant at Brett Adams, denies two counts including one of fraudulent trading.

    John Anthony Cartwright, 71, of Pinner, Middlesex, an associate of Mr Mills, denies three counts including two of fraudulent trading.

    The trial continues.