HBOS banker Lynden Scourfield and his cronies 'financially raped' small businesses to fund lavish holidays and sex parties

A corrupt HBOS banker has been locked up for 11 years after he and his cronies 'financially raped' small businesses to fund lavish holidays and sex parties in one of Britain's biggest ever frauds.

Lynden Scourfield, 54, a senior director of HBOS, 'sold his soul' to David Mills by forcing firms that needed to borrow cash to use his friend's crooked consultancy firm.

He 'sold his soul for sex, for luxury trips ... for bling and for swag', a judge said.

Behaving like the 'Mafia', they would then use threats and extortion to seize control of the businesses, plundering bank accounts and pocketing massive new loans granted in their name.

Scourfield, who boasted of being the 'grand wizard', enjoyed luxury holidays, trips on Mills' superyacht and sex with porn stars in return for his help. The scam cost scores of hard-working middle-class business owners not only their livelihoods, but also their family homes, pensions, savings and in one case even her marriage.

Jurors were told the fraud was worth £245million, but victims and police sources said the cost to small firms ruined by the scam was up to £1billion.

Scourfield was jailed for 11 years and three months while Mills, 60, was given 15 years at Southwark Crown Court today.

Michael Bancroft, 73, was jailed for 10 years, Mark Dobson, 56, for four-and-a-half years, and John Cartwright, 72, for three-and-a-half years for their various roles in the fraud between 2003 and 2007.

Mills's wife Alison, 51, also played a major role in the corruption and was sentenced to three and a half years.

There was standing room only in the courtroom, which was packed with victims and their supporters, and applause and cheers from the public gallery when the sentences were passed.

Sentencing, Judge Martin Beddoe said the case involved an 'utterly corrupt senior bank manager letting rapaciously greedy people get their hands on vast amounts of bank money and their tentacles into ordinary and honest businesses'.

Call girl: Escort Suzie Best, pictured left and right, was a porn star who performed for Scourfield at sex parties he organised

Luxury: Powder Monkey, the £2million superyacht owned by David and Alison Mills

'Letting them rip apart those businesses without a thought for the lives and livelihoods of those affected in order to satisfy their rapacious desire for money and the trappings of wealth,' he added.

Scourfield had not shown a 'shred of remorse' for ruining the lives of the employers and employees of those companies, he continued.

'People haven't just lost money but in some instances their homes, family and friends,' he added.

'People who could have expected to be comfortable in retirement were left cheated, defeated and penniless.'

The judge described Mills as 'a thoroughly corrupt and devious man, adept at exploiting the weaknesses of others'.

'He is the devil to who you (Scourfield) sold your soul in exchange for sex, for luxury trips with or without your wife, for bling and for swag,' he added.

Fraudsters: Michael Bancroft, David Mills and Lynden Scourfield on holiday in Barbados for Mills's wife Alison's birthday

Scheme: David Mills and Lynden Scoufield, who orchestrated a £245m loan scam entertained themselves with 'luxurious foreign travel', 'lavish spending', and 'sex parties'

On tour: The trio of fraudsters on holiday in Thailand, enjoying another trip while small firms pay for their jetset lifestyle

Some of the victims lost their companies, livelihoods and even their homes as a result of the scam.

Paul and Nikki Turner, from Cambridge, were ignored for years when they tried to report what was going on after their publishing company, Zenith, was run into the ground in the scam.

'They defrauded us, denied for 10 years that the fraud had happened, ignored the debt from the fraud and tried to evict us 22 times in order to cover up the fraud,' Mrs Turner said outside court.

'It's a huge success for us that the trial has gone on.'

She added: 'The other victims have gone through terrible things, they have gone through the loss of businesses and lost homes.

'Other people lost everything, including marriages broken up, because of this.'

When the wealthy gang of four men and a woman were convicted for the five-year fraud on Monday, Thames Valley Police commissioner Anthony Stansfeld described it as a 'shocking' and 'disturbing' crime.

Criminal couple: Pictured is David Mills (left) and his wife Alison Mills (right) who appeared at Southwark Crown Court

Wolves: Pictured is Mark Dobson (left), John Cartwright (centre) and Michael Bancroft (right)

One of three rooms used to store hundreds of boxes of evidence accumulated during a police operation, as a group of corrupt financiers who carried out a £245 million loans scam and squandered the profits on high-end prostitutes and luxury holidays have been jailed

He said: 'That a fraud of this size could have taken place either displays complicity or incompetence, a lack of corporate governance, complacency, and an absence of proper safeguards.'

The case bears similarities to the 2013 film The Wolf of Wall Street, in which Leonardo DiCaprio plays a crooked broker who made millions as part of a stock market fraud – using his ill-gotten millions on lavish parties, cars, prostitutes and drugs.

HBOS, the holding company behind Halifax and the Bank of Scotland, finally discovered Scourfield's unsanctioned loans in 2007. Just 18 months later the failing bank had to be taken over by Lloyds and required a £20.5billion taxpayer-funded bailout to cover toxic debts caused by excessive lending.

The Mail has seen numerous letters from the bank over the following years in which senior officials repeatedly denied it contributed to the failure of the companies that were fleeced, prompting accusations that it attempted to 'cover up' the scandal.

Victim Joanne Dove, who lost her business, home and marriage through the fraud, said: 'It was financial rape... I lost everything, my reputation, all our money, all our pension schemes.' It also emerged that:

The fraud carried on unhampered for four years because of a 'fundamental flaw' in the bank's checking system.

Former Tory Minister Sir James Paice said the head of HBOS 'flatly denied' the lender had done anything wrong after Scourfield was finally sacked.

Sir Victor Blank, the chairman of Lloyds TSB at the time of the HBOS takeover, was warned of a 'huge fraud' by one of the victims, but an associate wrote back to say it would 'not be appropriate to respond'.

Lloyds now faces a huge compensation claim from those defrauded.

Scourfield, who worked on impaired assets in the Reading branch of HBOS, was the 'goose laying golden eggs' for Mills and his consultancy firm Quayside, Southwark Crown Court was told.

Scourfield enjoyed 'sexual entertainment... on a fairly frequent basis' in return for his part in the scam. Wads of £4,000 cash to be spent on prostitutes were delivered to a central London flat where he entertained the women.

Nicknamed 'funny money', it was kept in a drawer along with a stash of Viagra. Suzie Best, a £250-an-hour escort and former adult TV star described the fat cat banker as a 'short, balding Danny DeVito lookalike' after one session at the rented flat in 2005.

She said the man with 'grey, brushed-back hair' asked her to go to the bedroom with him, but she 'didn't think he could get an erection at any stage'.

Ill-gotten gains: Bancroft's Range Rover parked up at his luxurious farmhouse in York

Country house: Police took images of Bancroft's farm house in York, used as background material during the trial

Ms Best, who costs £300-an-hour, called Scourfield and his friends the 'posh t**t bankers' and met them regularly at a rented London flat.

Suzie would perform sex acts on some of the men and also performed in 'girl-on-girl shows' for their pleasure.

Scourfield also suffered from 'suffered from premature ejaculation, liked to undress girls and liked girls to wear suspenders and mini-dresses', the court heard.

His favourite escort Suzie also offers 'verbal and physical domination' for clients who like spanking and humiliation.

Envelopes filled with wads of cash were delivered Scourfield at a flat in Portman Square.

If he was not there they were left in the 'blue drawer' which was where Bancroft kept a stash of viagra.

Cartwright told the man dropping off the cash it was 'funny money for Scourfield to pay for girls'.

Abroad: This huge, white-walled villa was Bancroft's home in Portugal, paid for from the funds they gained from their illegal scheme

Palace: A luxury bedroom on board the yacht which is owned by banker David Mills

Another call girl, a porn star, kept a diary detailing a lurid lesbian show she and three other women performed for Mills and Scourfield in October 2005. A later entry read: 'Chinese meal. Then drinks at flat and quick shag. Easy £1,500.'

Scourfield, who earned £88,600 a year, was also given free rein to travel across the world and splash out with an Amex card at Mills' expense. He spent more than £57,000 on jewellery, clothes, and hotels during 'boys' jollies' in Germany and the US.

Mills took him on several holidays, including a £4,000 seven-day cruise in Florida paid for on an Amex card from a struggling business.

Scourfield and Mills took their wives for a six-star cruise from Nice to St Tropez, staying in a royal suite on the three-day trip.

The Quayside consultants also enjoyed a luxury life from the money they stole. Mills and his wife Alison lived in a detached six-bedroom home, with swimming pool, tennis court and gym, in the affluent town of Chorleywood, Hertfordshire.

They also owned a 100ft £2million luxury superyacht called Powder Monkey, which was moored in the Mediterranean. Accomplice Michael Bancroft lives in a six-bedroom farmhouse in Warwickshire and had a villa in the Algarve.

He was employed by Quayside despite previously using £645,000 of shareholders' cash at another company to pay for his lingerie model mistress, work on his family home and golf holidays.

Pool: And as well as the luxury yacht, Mills had a huge home with a swimming pool out back called Toddenham House, in Gloucestershire

Cruising: David Mills owned this black Range Rover, one of the many luxury cars that the gang managed to buy with the money they conned from others

Scourfield got away with his 'deliberate, systematic and sustained' scam for so long because of a 'fundamental flaw' in the banking system, the court heard.

He would log unapproved loans in a bank system which would be sent to the company head office in Edinburgh. But the system was open to abuse because anyone with an appropriate level of authority could change limits on the system.

Pictured is a luxury yacht owned by David Mills

For three years between 2004 and 2007 there were also no audits at the Reading branch where Scourfield worked, the court heard. It was not until later that HBOS director Tom Angus became 'increasingly concerned' and arranged for a preliminary review that found 'many gaps in formal sanctioning'.

Scourfield was suspended for gross misconduct the following month, after which Quayside's involvement in the scam was discovered.

Two further internal investigations and a third by Deloitte found 'serious negligence and possible improper conduct'. But the Mail has seen documents showing that the bank repeatedly denied that any wrongdoing either in its lending or its use of Quayside as a consultancy long after it knew of serious problems.

Andrew Reade, who was left £250,000 out of pocket after his company Keenets was pillaged by Quayside, wrote to Victor Blank, the then chairman of Lloyds TSB, at the time of its takeover of HBOS in 2008 outlining in extensive detail the scale of the consultancy's 'huge fraud'.

He attached a dossier describing how many companies had suffered because of what was described as a 'huge fraud' involving Scourfield and Quayside.

But the next day he received a letter from the banker's executive assistant saying it would be 'not appropriate' to respond to the issues raised.

Gaudy: The trio were hardly subtle with their wealth and David Mills had a personalised number plate on his black Mercedes

Living large: This was a quad bike in the garage at York Farm, David Mills's country home

Sir Victor, a former business ambassador for Gordon Brown, was chairman of Lloyds in 2008 when the credit crunch hit.

Sir James, a former Tory minister who campaigned for bank collapse victims as an MP, said: 'The head of HBOS flatly denied to me that the bank had done anything wrong in a face-to-face meeting, despite all the evidence we now know to the contrary.

'I am pleased that justice has been done but very sorry it has taken so long. Clearly HBOS is going to have to recompense the very hard working men and woman who have suffered so badly.'

Mark Dobson, who was also a manager at HBOS, Mills and Michael Bancroft, were convicted on counts including bribery, fraud and money-laundering.

Alison Mills and John Cartwright were also convicted for their parts in the conspiracy. Another defendant, Jonathan Cohen, was acquitted. Scourfield pleaded guilty at an earlier trial last year. They will all be sentenced later this week.

A Lloyds spokesman said the bank assisted police throughout the probe.

Couple suffered '13 years of hell' but never gave up on tireless campaign to expose fraudsters

By TOM KELLY FOR THE DAILY MAIL

Joanne Dove, who lost £15 million, her home and business from the HBOS bankers

Nikki and Paul Turner suffered '13 years of hell' after falling victim to the HBOS fraudsters.

After their business was destroyed in the scandal, the couple led a tireless campaign to expose the crime – despite repeated denials of wrongdoing by the bank and threats to evict them from their home.

Their ordeal began in 2003, when they took out a £160,000 business loan from HBOS to fulfil their dream of starting a music publisher called Zenith Cafe.

In 2004 they were introduced to senior HBOS director Lynden Scourfield, who forced them to use crooked Quayside Corporate Services.

Quayside charged tens of thousands pounds in fees, but repeatedly gave incorrect advice. It was only after Zenith Cafe was forced out of business that the Turners discovered many other victims of the fraud.

Finding themselves broke, and with their accounts frozen, they were forced to sell their jewellery to finance investigations into the scam.

They wrote repeatedly to the bank, regulators, police and MPs, but said the banking group not only repeatedly denied any wrongdoing, but also attempted to repossess the Turners' home through 22 eviction hearings.

Mr Turner said: 'It was a complete cover-up. The bank repeatedly attempted to mislead us, the other victims, our MPs and other authorities.' Mrs Turner added: 'What happened at HBOS Reading was fraud on an industrial scale.'

The Turners said they managed to keep hold of their five-bedroom home in Cambridge after the courts accepted that there was potential misconduct by the bank and refused to allow it to repossess the property.

But the couple estimate the scandal cost them £11million.

Unlike the Turners, Joanne Dove really did lose everything – her marriage, £1.2million business, savings, pension and home. The award-winning businesswoman is now a single mother of four living in social housing, so hard-up she could scarcely afford to pay the travel costs of attending court to see her tormenters go to jail.

She said: 'I can only liken my experience of dealing with HBOS appointed executives to how I would imagine dealing with the Mafia would be.

'It was financial rape... I lost everything, my reputation, all our money, all our pension schemes. My children lost their father in their lives and the idyllic childhood they previously had. Our family was devastated... they robbed me of my life's work.'

Miss Dove ran the eco-nappy company Cotton Bottoms, which by 2003 had grown so rapidly that she needed a £400,000 loan to expand.

Lynden Scourfield approved the loan, but insisted she hire Michael Bancroft from QCS as a non-executive director on the board.

The crooks then systematically bled the company dry, eventually taking it away from Miss Dove amid threats as while she was expecting her fourth child.

Bancroft even locked her in a room as he demanded controlling shares in the company.

She said: 'I felt like a hostage. It was like having a huge parasite implanted in the guts of the business.'

She said Bancroft put her at loggerheads with her husband, a co-director of the company, by secretly offering him a deal to buy out the firm and give him a new position.

In desperation, she was forced to sell the business to a competitor at a sixth of its value, leaving her ruined.

A 'goose laying golden eggs', a textiles tycoon and a businessman who preyed on small businesses: Profiles of the corrupt financiers and their cronies who orchestrated the scam

Anthony Joseph for MailOnline

Debauched HBOS banker Lynden Scourfield, 54, built up a £245million of toxic debt as he pumped cash into failing businesses for David Mills to cream off.

Scourfield was the 'goose who was laying golden eggs' and Mills rewarded him with luxurious trips around the world and viagra-fuelled encounters with high-class hookers who were repulsed by his bulging gut.

One sex worker, known by the alias Suzie Best, described the fat cat banker as a 'short, balding Danny Devito lookalike' after a session at a rented Portman Square flat in 2005.

Another sex worker, dubbed FR, kept a diary detailing a lurid girl-on-girl show she and three other hookers performed for Mills, Bancroft, and Scourfield in October 2005.

Debauched HBOS banker Lynden Scourfield (pictured in Russia), 54, built up a £245million of toxic debt as he pumped cash into failing businesses for David Mills to cream off

Scourfield, whose HBOS salary averaged £88,600 a year between 2003-2007, was given free reign to travel across the world and splash out with an AMEX card at Mills' expense.

He spent more than £57,000 on jewellery, clothes, and hotels during 'jollies' in Dusseldorf, Germany, and the US.

In February 2004 he and Mills enjoyed a lavish holiday in Florida and Miami as Mills paid for a £4,000 seven-day cruise on an AMEX card from a struggling business.

A month later the Scourfield and Mill took their wives for a three-day all inclusive six-star cruise from Nice to St Tropez, staying in the ship's two-bedroom Royal Suite.

Mills and Scourfield went to the PGA golf show in Orlando a year later.

Scourfield also used the AMEX card to pay for stays in the five-star Westbury Hotel in Bond Street, Mayfair, and meals at Wilton's Oyster Bar in St James's, central London.

Alison Mills made sure to keep him sweet and flew him out to Barbados for her 40th birthday party with the Bancrofts. She also invited Scourfield and his wife Jacqueline, 53, on trips to Ascot, including a stop in the Royal Enclosure in 2006.

In November that year he and Dobson traveled to Bangkok for five days for Mills' 50th birthday - a trip that cost in excess of £13,500.

When Scourfield applied for a mortgage with the Portman Building Society between 2003-2004 Mills wrote to say he would receive up to £100,000 for 'consultancy fees' from QCS that year.

An investigation revealed £340,142 of explained income in the Scourfield's accounts between 2004-2007, and a further unexplained income of £340,142.

Prosecutors are unable to say exactly how much he received as many gifts took the form of untraceable bungs.

Scourfield admitted conspiracy to corrupt, money laundering and four counts of fraudulent trading at Southwark Crown Court on 12 August last year and is currently behind bars.

His wife Jacqueline Scourfield was the sole director of a 'slush company' called Zudiki which prosecutors say was 'established to enable Lynden Scourfield to receive and launder the proceeds of the corrupt relationship between him and David Mills'.

In 2013 she was charged with one count of money laundering between January 2004 and October 2010, but prosecutors later offered no evidence against her.

David Mills and his wife Alison Mills, arriving at court

David and Alison Mills

David Mills was found guilty of one count of conspiracy to corrupt, four counts of fraudulent trading and one count of conspiracy to conceal criminal property.

Alison Mills, from Moreton-in-Marsh, Gloucestershire, was cleared of one count of fraudulent trading but found guilty of one count of conspiracy to conceal criminal property.

Former NatWest banker and venture capitalist David Mills, 60, engineered the HBOS scam.

Mills preyed on struggling companies, charging exorbitant fees for 'consultancy' work by Quayside Corporate Services even though the firm wasn't a member of any recognised professional institute.

He also transferred failing businesses' assets to his shadowy firms The Sandstone Organisation and Knightingale Investments - neither are said to have had a 'genuine commercial purpose'.

The conman ensured HBOS funds would be pumped into the businesses he took over by bribing Scourfield - his 'golden goose' - with cash, lavish hospitality, viagra-fuelled romps with high-class escorts.

Mills and his wife Alison, 52, used the profits to fund the purchase and running costs of their £2million 100-foot long yacht Powdermonkey, shored up in the Mediterranean.

Alison, who has a 'well-established background in business and finance', organised the couple's social calendar to ensure Mills' gang 'remained loyal'.

She hosted the Scourfields and the Bancrofts at her 40th birthday party in Barbados and organised trips to Ascot which the Scourfields and Dobson attended.

In 2003 Mills hosted Scourfield at his property in Majorca for a week, and the pair later flew to Los Angeles together.

While in America they stayed at the Ritz Carlton in Orlando and the Mandarin Oriental in Miami during a spending spree funded by Mills' AMEX card.

In 2004 David Mills wrote in support of Scourfield's mortgage application to the Portman Building Society, telling them he was due to receive a bonus of up to £100,000 from QCS.

Mills and his wife Alison, 52, used the profits to fund the purchase and running costs of their £2million 100-foot long yacht Powdermonkey, shored up in the Mediterranean

A year later Alison booked a table for the couple and the Scourfields at the Ditchling Ball, an annual high-society charity event in West Sussex.

Mills also attended one of the gang's infamous sex parties, watching prostitutes perform girl-on-girl action at a rented flat in Portland Square with Scourfield and Bancroft.

More than £28million passed through David and Alison Mills' personal accounts during the conspiracy.

During her police interview, Alison claimed: 'I was not involved in my husband's businesses. I played a supporting role as his wife.'

She was represented by David Cameron's older brother Alexander, a QC who specialises in fraud cases.

Michael Bancroft

Found guilty of one count of conspiracy to corrupt, three counts of fraudulent trading and one count of conspiracy to conceal criminal property.

Textiles tycoon Michael Bancroft, 73, was no stranger to controversy before he joined QCS.

Jurors heard he took £645,000 of shareholders' cash from the Ritz Design Group to cover 'personal expenditure' between 1986-1991 after becoming principal shareholder and CEO of the company through a management buyout.

He spent hundreds of thousands on building, decorating and interior design work carried out to his then home 'Faddiley Hall' in Cheshire.

There were also charges in connection with family holidays in Europe and stays at luxury Scottish golf resort Gleneagles.

Textiles tycoon Michael Bancroft, 73, was no stranger to controversy before he joined QCS

Bancroft also abused his company Barclaycard and AMEX cards and is said to have used shareholders' cash to pay for a flat for his then mistress, a lingerie model.

In 1991 he formally accepted wrongdoing, resigned, and agreed to pay back the money to avoid a criminal prosecution.

Bancroft joined Mills' team of corporate bandits and took director roles at struggling companies Flip Media Ltd, Simon Jay Ltd, and porno mag business Remnant after being engaged as a QCS 'consultant'.

He kept a stash of viagra in the cupboard at a rented flat in Portland Square that Scourfield used for his romps with prostitutes.

Bancroft and his wife Beverley, 67, owned a villa on the Algarve in Portugal and hosted the Scourfields there in 2004 and 2005.

But the relationship soured after Scourfield left HBOS and Bancroft sent him a solicitor's letter demanding more than £11,000 for the hospitality.

Bancroft splashed £100,000 on a failing businesses' credit card during the con and clawed in at least £200,000 of unauthorised payments.

He told police: 'My business expertise is in textiles. Throughout the 80s and 90s I gained a lot of experience in turning round companies in the textile industry and improving their financial results.'

John 'Tony' Cartwright

Cleared of one count of fraudulent trading but convicted of one count of conspiracy to conceal criminal property.

John Cartwright, 72, was a long-time associate of Bancroft who was said to have helped to cover his tracks when shareholders' cash was taken from Ritz..

Cartwright worked as the company's financial director and cooked up false invoices to throw investigators off Bancroft's scent.

He also helped himself to £12,000 in shares to pay for a car and 'fancy meals' for his wife.

He too agreed to repay money in 1991 to avoid prosecution.

The Ritz auditor, Stephen Wilkinson, said of the pair's scheme: 'At the time I was appalled that they had committed such a blatant fraud against the company and colluded with others to hide it from the other directors, employees and shareholders.'

Cartwright raked in £200,000 in unauthorised payments after Mills and Bancroft recruited him to QCS to prepare management accounts for struggling HBOS client Magenta.

He failed to disclose £150,000 of income to HMRC while working for the textile firm.

Jonathan Cohen - not guilty

Cleared of one count of fraudulent trading and one count of conspiracy to conceal criminal property.

Accountant Jonathan Cohen, 57, organised tax affairs for Scourfield and Mills to provide a 'professional shield' for their con, it was alleged.

Cohen, the co-founder of Brett Adams, became 'hopelessly compromised' as he relied on Mills' businesses for his turnover and took a £151,000 loan from one of his firms in 2006.

Scourfield supervised Brett Adams' accounts, pumping HBOS money into the business when it ran into financial difficulties.

Accountant Jonathan Cohen, 57, organised tax affairs for Scourfield and Mills to provide a 'professional shield' for their con, it was alleged

Cohen also worked for QCS as a consultant while he was auditing the company's finances - a 'significant conflict of interest'.

He previously worked as a finance director for investment company Caplay and financial services company Newmarket Investments before it dissolved in September 2016.

Caplay was listed on AIM, a submarket of the London Stock Exchange launched in 1995 to allow smaller, less-viable companies to float shares in a more flexible regulatory environment.

In 2014 he became director of bookkeeping company Brennah Ltd - he lives in a £600,000 detached house in Pinner, Middlesex.

Mark Dobson

Found guilty of one count of conspiracy to corrupt and one of conspiracy to conceal criminal property.

Scourfield's HBOS colleague Mark Dobson, 56, was rewarded for his part in the scam with £30,000 from Mills and extravagant hospitality.

Dobson worked in the bank's cash flow finance department before moving to Impaired Asset's Reading Office with Scourfield.

He later moved to HBOS's Bishopsgate office as a director.

The banker approved loans to two high-risk clients - Eyesaglow and the St David's Centre (a shopping development in Swansea) - while Mills siphoned the cash through his criminal business enterprise.

In 2006 the Mills' invited him and Scourfield to attend the Royal Enclosure at Ascot on QCS's tab.

Later that year he was seen chugging on a large cigar at Mills' 50th birthday bash in Thailand.

Dobson told the 2010 Deloitte investigation that QCS had been 'successful' and that 'the bank was fully paid out'.

HBOS dismissed him in 2012 for gross misconduct.

He lives in a £1.3million freehold flat in Barnsbury, north London.