Lloyds Banking Group revealed a 100 million pound ($125 million) compensation scheme for victims of a fraud for which six people were jailed this year, as Britain’s financial watchdog reopened a probe into the case. Lloyd’s is Britain’s biggest mortgage lender and has been under pressure to compensate the victims at its HBOS business, who say it reacted too slowly to their complaints. Lloyds said in a statement it will provide interim payments on a case-by-case basis and appoint an independent lawyer to consider whether it properly investigated at the time.
Whistleblower Nikki Turner, who reported the scheme to the police, said “It is a relief to see that Lloyds is finally recognizing its obligations to the victims of this scandal. However we need to see a firm timetable from Lloyds on when restitution will be made. The bank has to recognize that victims suffered twice – once from the fraud and then from the cover up.”
Former HBOS bankers Lynden Scourfield and Mark Dobson, businessmen Michael Bancroft, David Mills and his wife Alison Mills and accountant Tony Cartwright were convicted of various crimes after a five-month jury trial in February.
They were found guilty of a scam involving fraudulent loans and sent to prison for a total of 47-and-a-half years, among the toughest sentences handed out for a high-profile, white collar fraud in Britain in recent years. Among other things, the scam involved the bankers asking struggling business owners to employ a turnaround consultancy as a condition for getting a loan and they were obliged to pay the consultancy high fees for services and, in some cases, hand over ownership. Scourfield, in particular, was bribed with designer watches, sex with prostitutes and exotic foreign holidays by his business associates for his role in the scam. Reuters
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