National Crime Agency launches probe into HBOS fraud allegations

The National Crime Agency is carrying out a review of allegations of fraud at HBOS in a move that could lead to a full criminal investigation.

The NCA said its review of evidence would extend beyond the scope of a previous investigation that led to the imprisonment of six people in 2017.

Thames Valley Police, which carried out the original investigation, asked the NCA to review allegations of fraud at HBOS’s impaired assets division for London and the South East. The review will decide whether the allegations require a full criminal investigation by NCA or other agencies.

Two former HBOS employees, Lynden Scourfield and Mark Dobson, were jailed in January 2017 for fraud and other offences committed between 2003 and 2007. HBOS was rescued by Lloyds Banking Group at the peak of the financial crisis in 2008.

Scourfield, who was in charge of looking after troubled business customers, took bribes from David Mills to load loans on to struggling companies and refer them to Mills's financial consultancy, which charged high fees and in some cases took control of the business.

Many of the businesses went bust and some of the owners lost their homes. Mills and his wife also went to jail over the scam.

“A number of companies have reported allegations of significant fraud involving a former employee of HBOS and their associates. These include allegations of asset stripping through the use of corrupt consultants as well as allegations of fraud and money laundering. The sums of money involved could be significant, running to many millions,” the NCA said.

Lloyds has set up a £100m compensation scheme for victims of the fraud, who had complained the bank reacted too slowly to their complaints. Victims have also claimed HBOS knew about the fraud as long ago as February 2008 and that the total value of the fraud may be closer to £1bn.

Lloyds said it welcomed the investigation. The news appeared to leave the bank's investors unperturbed as its shares rose 0.6% to 65p at 08:23 BST.