Lynden Scourfield, a former senior banker at Halifax Bank of Scotland, took gifts of cash, luxury holidays and “high class escorts,” a jury in London has heard during a trial surrounding an alleged fraud that cost HBOS £245 million ($317 million). One sex worker’s diary has been entered into evidence in the trial.
The trial, which began on Monday, involves David Mills and Michael Bancroft who ran consultancy firm Quayside, accountants Tony Cartwright and Jonathan Cohen, and HBOS manager Mark Dobson, all of whom pleaded not guilty.
Prosecutors alleged that, between 2003 and 2007, they were involved in a scam which saw a firm of consultants profit from the financial distress of small businesses that had been lent money by HBOS.
As part of the evidence given during proceedings, prosecutors told the jury that Scourfield, who ran the HBOS impaired assets division and who is not on trial, lent large sums of money to troubled small businesses.
Scourfield’s loans went “well past the point when it would have been obvious to any honest banker that the bank debt could and would never be repaid,” the prosecuting lawyer Brian O’Neill QC, told Southwark Crown Court, according to a report by the BBC.
In return, the jury heard that Scourfield allegedly took bribes, including weekly cash deliveries, payments for “sexual entertainment, and luxury travel, after forming a “corrupt relationship” with David Mills, a business consultant and one of the trial’s defendants, between 2003 and 2007.
“Sexual entertainment was provided to him [Scourfield] on a fairly frequent basis,” O’Neill told Southwark Crown Court, according to a Financial Times report.
“The motivation was greed,” O’Neill also told the court, according to the Guardian. “Police … uncovered evidence of huge rewards provided by Mills to Scourfield to effect his corruption.
“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.” Scourfield received envelopes containing £3,000 or £4,000 in cash at a time, the FT reports. Prosecutors claim that one sex worker recorded this note in her diary: “met guys, me, Amber and Suzie. Chinese meal. Then drinks at flat and quick shag. Easy £1500.”
HBOS, which owned the Halifax and Bank of Scotland brands, suffered heavy losses in the 2008 financial crisis and neared collapse as its funding was cut off by the credit crunch.
It had to be rescued by a combination of a public bailout and a merger with Lloyds TSB, costing the taxpayer around £20 billion in the early part of 2009.
So far, only one person — former HBOS wholesale banking chief Peter Cummings — has been fined and banned from working in the City by regulators investigating the collapse.
The trial continues.