Intelligence UK takes an in depth look at the HBOS scandal, the Vavasseur and Dobb White ponzi scheme frauds and how the regulators are complicit in concealing the frauds and assisting the banks and the perpetrators against the interests of the victims and the public.
It all began with an accountancy firm formerly based in Nottingham and Leicester called Dobb White, whose partners Alan White and Shin Gangar targeted high net worth individuals offering what was essentially, a ponzi scheme, with the promise of returns of up to 160%
The Bank of Scotland’s then Manchester based head of specialist mortgages, Fraser Mackay, is alleged to have been peddling the scheme at the same time as urging customers to take out substantial equity release loans on their homes on a self-cert basis to fund their investments in the Vavasseur / Dobb White schemes. The loans were all, largely conditional on the money going into Vavasseur or directly into Dobb White, which customers were told represented a series of offshore “custodian accounts” offering spectacular returns of up to 5% a month. The “equity release” element however, never actually happened.
White and Ganger formed a close working alliance with Mackay, notably a senior member of the bank, offering him hospitality at champagne receptions and football matches.
White and Gangar had introduced Macay to many potential investors at their functions, aimed to convert investors in their scheme. Macay was introduced as the man within the bank who could sort out the loans. Those loans were security backed against the customer’s assets, yet there was never any draw down of the loan and it was stipulated that the money loaned against the customer’s property, would be held to order, not of the customer, but by the bank and sent to Dobb White / Vavasseur.
The US authorities, including the Securities & Exchange Commission (“SEC”) and the FBI, had already lifted the lid on Bahamas-based Vavasseur Corporation and were in the process of bringing its founder, the swindler Terry Dowdell, to justice. On 19th November 2001, SEC filed its lawsuit and the Court entered a Temporary Restraining Order prohibiting Dowdell and his associates from raising any additional funds for the Vavasseur Program, freezing all of Dowdell's assets, and requiring the repatriation of all Vavasseur assets located outside of the United States. On 21st February 2003, Judge James Michael, for the Western District of Virginia, entered default judgment against Vavasseur Corporation, the principal entity in the sum of circa $130 million for the massive international Ponzi scheme orchestrated by Terry Dowdell. On 4th June 2002 Dowdell pleaded guilty to criminal charges of securities fraud, wire fraud and money laundering stemming from this scheme. The SEC and Department of Justice coordinated enforcement efforts with the U.K. Serious Fraud Office (“SFO”), the Leicestershire Constabulary, the FSA, Antwerp Police, and Ireland's Criminal Asset Bureau and in October 2002, the SFO and the Leicestershire Constabulary arrested Gangar, White and two others suspected of involvement of the Vavasseur Program. Dobb White was a main UK agent for the fraudulent investment program.
In September 2004 a formal complaint was lodged with the FSA’s John Tiner, the chief executive by one of the bank’s customers. That complaint focused predominantly on the abuse of off-balance-sheet vehicles by the HBOS Bank of Scotland Corporate division to mitigate its bad debt lending liabilities.
From then on, rather than to have taken proactive action to assist the victims in obtaining remedy, the FCA, formerly the FSA and the SFO had been seeking to protect the interests of the perpetrators of the fraud whilst acting against the interests of the victims, many of whom have been bankrupted and have lost everything as a result.
The bank, that is primarily responsible through its negligence constituting gross breach of duty, has shunned customer complaints, taking no responsibility for the fact that its nonfeasance was sole cause of loss to many hundreds of innocent victims. On today’s date, over 18 years on many of the victims of these frauds are still suffering, with absolutely no remedy provided by the culpable parties.
Intelligence UK has the solution, having investigated several of these cases over many years, we are getting justice for the victims.