David and Alison Mills, pictured, are on trial accused of being part of a group of bankers who engineered £245million of fraudulent loans and spent them on 'luxury travel' and 'sex parties'
A trial of bankers accused of engineering £245million of fraudulent loans heard claims of ‘luxurious foreign travel’, ‘lavish spending’, and ‘sex parties’.
Consultant David Mills, 60, was allegedly involved in a ‘corrupt relationship’ with HBOS banker Lynden Scourfield, 54, which led to the firm writing off the huge sums of money.
Southwark Crown Court heard Mills and five others caused companies to plunge into 'deep debt' by engineering money transfers to his company Quayside Corporate Services via HBOS from the firm's clients.
Huge sums of cash were then transferred by QCS to Mills and his wife Alison's own bank accounts.
The court heard Mills and his co-defendants spent the cash on luxury holidays and sex parties, in part 'rewarding' Mr Scourfield, who is not on trial, for his help.
Former banker and venture capitalist Mills is joined in the dock by HBOS banker Mark Dobson, 55, fellow consultant Michael Bancroft, 73, and his wife Alison Mills, 51, who were also allegedly involved.
Textile expert John Cartwright, 71, and accountant Jonathan Cohen, 57, are also on trial at Southwark Crown Court.
Mills allegedly used his company Quayside Corporate Services Ltd as a ‘turnaround consultant’ working with customers under Scourfield’s control as the Lead Director of Impaired Assets for HBOS in the South of England and South Wales, the court heard.
In his closing speech more than four months into the trial prosecutor Brian O’Neill QC said the group's ‘wholly dishonest and fraudulent’ actions between 2003 and 2007, caused HBOS to incur losses of £245million in respect of customer lending managed by Scourfield that ultimately had to be written off by the bank.
‘Their motivation was greed,’ said Mr O’Neill.
Mills, 60, left, was allegedly involved in a ‘corrupt relationship’ with HBOS banker Lynden Scourfield, right, leading to the former having millions of pounds transferred to his company Quayside Corporate Services
Jurors were shown pictures of Mr Scourfield in Russia as evidence of the ‘corrupt relationship’ between the me, with prosecutors alleging he was 'rewarded' by Mills with 'luxury travel'
‘This took the form of money transfers, cash, expensive gifts, use of an American Express card for personal spending, unauthorised and inappropriately lavish hospitality, luxurious foreign travel and sexual encounters with high class escorts.’
Mr O’Neill told jurors the police investigation has uncovered evidence of ‘huge rewards’ provided by Mills to Scourfield to ‘effect his corruption’.
‘You have heard about birthday parties in Barbados and Thailand, extravagant spending on credit cards, lavish hospitality and sex parties in West London flats.’
Mr O’Neill said Mills gave ‘Danny Devito lookalike’ Scourfield free reign of his American Express Card.
Scourfield spent £33,000 on it in just two years.
He outlined some of the ‘corrupt behaviour’ and highlighted the undisputed evidence of the women who were used to ‘provide sexual entertainment to Scourfield, Mills, Bancroft and others’.
Porn magazine ‘Fantasy’, owned by publishers Remnant, who were also left with debts of ‘in excess of £16million’ by the corrupt dealings, provided girls for the debauched bankers sexual entertainment, the court heard.
The woman who booked the girls remembers clearly it was for ‘posh t*** bankers’ for several thousand pounds, the court heard.
‘This seemed wrong as at the time bills were not being paid,’ said Mr O’Neill.
‘On two occasions escorts were booked for Bancroft and others.
‘On 27 October 2005 three attended a flat near Portland Square where Michael Bancroft and others watched.
Accountants Jonathan Cohen (left) and John Cartwright (right) are also on trial for allegedly being involved in the multi-million pound scam
‘There is no doubt David Mills attended on this occasion with his solicitor and another banker.’
Another paid for sex party happened just over a month later when three girls went for a Chinese meal with Bancroft and Scourfield, jurors were told.
‘They returned to the flat where various sexual acts took place,’ said Mr O’Neill.
‘The evening’s entertainment was paid for by Remnant.’
One of the girls was then telephoned in May 2006 by who she described as the ‘Danny Devito lookalike’, the jury heard.
‘You have seen the photos it can only be Lynden Scourfield,’ said Mr O’Neill.
After a meal in a Moroccan restaurant, the woman went to the Soho Hotel with him, the jury heard.
‘The spending on Mills’ Amex card was on foreign travel for the benefit of Lynden Scourfield,’ said Mr O’Neill.
‘It funded travel and lavish spending with various trips including the trip where he and Mark Dobson were in the same flight to Bangkok.
This trip was paid for by ‘impaired asset’ Bradman Lake, jurors were told.
Mr O’Neill said there was not a ‘single reason’ any impaired asset should pay for such trips and here would not have been ‘any reason’ for Scourfield to attend company sites abroad or at home.
The gang liked to travel by business or upper class when flying, jurors heard.
‘Mills changed his preference to business class in 2003,’ said Mr O’Neill.
‘Lynden Scourfield flew business class and upper class frequently at the expense of Bradman Lake and David Mills.’
This type of expenditure was ‘very frequent’, the jury heard.
The prosecutor earlier claimed that ‘very large amounts’ of money were paid to QCS by HBOS ‘high risk’ customers who had engaged the company.
‘Quayside transferred a great deal of that money to the bank accounts of David Mills in particular and his wife also,’ said Mr O’Neill.
‘In general terms more than £28million passed through the personal accounts of Mr and Mrs Mills.’
Michael Bancroft, left, 73, faces one count of conspiracy to corrupt, three counts of fraudulent trading and one count of conspiracy to conceal criminal property while HBOS banker Mark Dobson, right, 55, faces one count of conspiracy to corrupt and one of conspiracy to conceal criminal property
Business that were ‘already vulnerable’ are said to have been ‘further run down’ as part of the scam by the group.
The prosecutor claimed the group showed ‘complete disregard for the interests of existing shareholders and creditors’.
One company, Clode, was allegedly left in debt of ‘in excess of £20.5million’ after the supposed scam.
Tie manufacturer Theros was also allegedly left ‘almost £21million’ in debt to the bank.
Bancroft was labelled as Mills’ ‘man on the ground’ in these businesses and allegedly received ‘around £1million’ in direct payments.
Scourfield and Bancroft are also said to have been close with both going to Barbados to celebrate Alison Mills’ 40th birthday.
Both Scourfield and his wife even stayed at Bancroft’s villa on the Algarve in 2004 and 2005, jurors heard.
Cartwright is said to have received £200,000 for his alleged role in the fraudulent trading at textile company Magenta.
Dobson, a colleague of Scourfield, was allegedly responsible for two high-risk accounts on behalf of HBOS and allegedly received £30,000 in corrupt payments from one of Mills’ companies as well as benefitting from ‘inappropriate hospitality’.
Mills allegedly paid for a trip to Moscow, pictured, with Mr Scourfield and others in 2006
Accountant Cohen’s firm Brett Adams was ‘heavily dependent’ on Mills’ companies for a large slice of its turnover, the court heard.
His firm is also said to have run into financial difficulties and banked with HBOS, being transferred to Scourfield’s department when struggling.
‘It was, we suggest, the combination of heavy reliance on Mills and Scourfield’s HBOS Impaired Assets work and the precarious state of his firm’s finances that led Cohen to participate in what he must have known were criminal activities,’ Mr O’Neill said.
Dobson, of Barnsbury, north London, denies one count of conspiracy to corrupt and one of conspiracy to conceal criminal property.
David Mills, of Moreton-in-Marsh, Gloucestershire, denies one count of conspiracy to corrupt, four counts of fraudulent trading and one count of conspiracy to conceal criminal property.
Bancroft, of Shipston-on-Stour, Warwickshire, denies one count of conspiracy to corrupt, three counts of fraudulent trading and one count of conspiracy to conceal criminal property.
John Cartwright, of Hyde, Cheshire, denies two counts of fraudulent trading and one count of conspiracy to conceal criminal property.
Alison Mills, of Moreton-in-Marsh, Gloucestershire, denies one count of fraudulent trading and one count of conspiracy to conceal criminal property.
Cohen, of Pinner, Middlesex, denies one count of fraudulent trading and one count of conspiracy to conceal criminal property.
The trial continues.