Newspaper article The Evening Standard (London, England)

More Financial Firepower Needed in Fraud Fight

Newspaper article The Evening Standard (London, England)

More Financial Firepower Needed in Fraud Fight

Article excerpt

Byline: Anthony Hilton city comment

ONE of the more shocking trials to go through the courts in the first few months of this year was the case from the Reading branch of HBOS, which told a tale of small businesses being systematically and deliberately destroyed by senior members of the bank and cronies on the outside so that they could line their own pockets.

It was one of the largest fraud cases ever undertaken by the Crown Prosecution Service. The official account says that some PS250 million was involved, but that is just what they know about and can prove. Unofficially, the overall losses caused by the crime are closer to PS1 billion.

The guilty verdicts, when they came down, were met with sentences that were much stiffer than is usual for fraud cases. This reflected the fact that not only was this particularly serious but also that this, like all fraud, has put its victims and their families through years and sometimes a lifetime of emotional and mental distress.

However, what one did not think about in reading the accounts of the trial was the process that got these people to court in the first place -- not, that is, until one read by chance a report on the police inquiry from Anthony Stansfeld, the Police and Crime Commissioner for Thames Valley.

What is striking in his report is that, although the prosecution was eventually successful, there were clearly moments during the inquiry when they were tempted to abandon the whole thing, not because of the rights and wrongs of the issue but because the cost of investigating the case was putting an almost intolerable burden on the local police force.

This resulted in Stansfeld's most chilling observation, to the effect that if the bank branch had been somewhere other than Reading -- in any of a dozen other county towns, for example -- the police would probably have looked the other way, and the fraudsters would have got away with it.

"If Thames Valley had not taken on this case, no one else would have and the crime would not have been investigated," he says.

"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."

That is serious. To repeat, the sum of money lost by HBOS as a result of these corrupt actions was at least PS250 million -- much of it used to finance a spending spree with Mediterranean yachts, villas in Barbados and Majorca, overseas bank accounts and a general high life. This was at the expense of shareholders in the bank and the many small businesses that were bankrupted and ruined. If that does not merit a police inquiry, what might? 'The police want to look the other way for reasons of time, money and competition for resources' -- and they believe that they will get more and better results spending the money hunting easier-to-catch criminals. …

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