By Andrew MacAskill
LONDON (Reuters) - Two former HBOS bankers and four business partners were sentenced to between three-and-a-half and 15 years in jail by a British judge on Thursday for orchestrating a $307 million fraud that siphoned off money from struggling businesses.
Former HBOS bankers Lynden Scourfield and Mark Dobson, businessmen Michael Bancroft, David Mills and his wife Alison Mills and accountant Tony Cartwright were convicted on Monday of various crimes after a five-month jury trial in London.
Scourfield, who was bribed with designer watches, sex with prostitutes and exotic foreign holidays by his business associates for his role in the scam, was sentenced to 11 years and three months in jail. His former colleague Mark Dobson was handed four-and-a-half years in jail.
Mills was sentenced to 15 years in prison and his wife Alison to three and a half years.
Mills' former business associate Bancroft was sentenced to 10 years in jail and Cartwright handed a three-and-a-half year term.
Judge Martin Beddoe said Scourfield had "sold his soul ... for sex, for luxury trips with and without your wife, for bling and for swank."
The sentences are among the toughest handed out for a high-profile, white collar fraud in Britain in recent years.
The bankers asked 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.
Many of the businesses involved went into liquidation, resulting in job losses and financial hardship.
"Their victims were people who were trying to contribute to the economy," said police detective Nick John. "They were normal people running small to medium-sized businesses who needed support and instead had their livelihoods, and in many cases, their lives destroyed by the greed of these parasites."
HBOS, once Britain's biggest mortgage lender under the Halifax and Bank of Scotland brands, incurred losses of 245 million pounds related to the conspiracy.
The bank was rescued in a state-engineered takeover in 2008 by rival Lloyds Banking Group (LON:LLOY). Lloyds subsequently needed a 20 billion pound bailout of its own.
Scourfield headed a division at HBOS that dealt with small companies in financial distress. In return for expensive gifts, cash, foreign travel and sex with prostitutes, Scourfield referred his clients to Mills and his restructuring consultancy.
HBOS would extend far more money than the businesses needed, which the consultancy would then siphon off.
Other high-profile cases related to Britain's financial sector in recent years include that of Tom Hayes, a former UBS and Citigroup (NYSE:C) star trader, who was initially sentenced to 14 years in 2015 for manipulating Libor interest rates. His sentence was reduced to 11 years on appeal.
Magnus Peterson, the founder of one of London's oldest hedge funds, who was convicted of perpetrating a $540 million fraud in 2015, was sentenced to 13 years in prison.