By Andrew MacAskill
LONDON (Reuters) - Two former HBOS bankers and four other people were found guilty on Monday in a $307 million (245.93 million pounds) fraud trial.
They are among the first people to have been found guilty for contributing to losses that led to taxpayer-funded rescues of several of Britain's top banks during the financial crisis.
Former HBOS bankers Lynden Scourfield and Mark Dobson, businessmen Michael Bancroft, David Mills and his wife Alison Mills and accountant Tony Cartwright were convicted for various crimes following a five month jury trial in London.
Prosecutors had alleged businessmen Bancroft and Mills arranged sex parties, exotic foreign holidays and provided cash in brown envelopes for Scourfield between 2003 and 2007.
"Many people have had their lives ruined by the corrupt behaviour of Lynden Scourfield, David Mills and their associates," Stephen Rowland, a prosecutor for the Crown Prosecution Service, said in a statement.
HBOS, once Britain's biggest mortgage lender under the Halifax and Bank of Scotland brands, incurred losses of 245 million pounds ($307 million) related to the alleged conspiracy.
The bank was rescued in a state-engineered takeover in 2008 by rival Lloyds Banking Group (L:LLOY). Lloyds subsequently needed a 20 billion pound bailout of its own.
Prosecutors told the court that bankers at HBOS asked struggling business owners to employ a turnaround consultancy as a condition for getting a loan.
This company, Quayside Corporate Services, was owned by David Mills.
Prosecutors alleged that the businesses 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, the prosecutors said.
"Scourfield worked in a section of his bank which was supposed to help struggling businesses but instead, motivated by greed, he went about stripping them of their assets," Rowland said.
Scourfield had pleaded guilty to charges including conspiracy to corrupt, conspiracy to launder the proceeds of crime and four counts of fraudulent trading, while the others said they were not guilty of the charges brought against them.
All the individuals are due to be sentenced on Thursday.
Music publishers Nikki and Paul Turner, who were victims and helped uncover the fraud, said after the verdict that they had written to Lloyds asking for compensation.
When they initially presented their evidence to the bank's board, first to HBOS and then Lloyds, the bank dismissed their allegations.
"We have again written to the chairman of Lloyds asking him to do the right thing and compensate us and other victims for the loss of income, pain and anguish we have all suffered," the couple said in a statement.
Lloyds said in a statement following the verdict that although it has previously reviewed customer concerns, it will look into any new information raised during the trial.