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This is the transcript of Thames Valley police and crime commissioner Anthony Stansfeld’s speech to MP’s today. Its clearly a draft transcript prepared in haste but all the salient points are there including revelations about the huge LLOYDS BANK cover up and the lies peddled by LLOYDS Chairman Lord Blackwell and senior LLOYDS executives.

  Anthony Stansfeld speech at the New City Agenda meeting at the Committee Rooms of the House of Commons; 10 July 2018

I think over the last 20 years or so, banks have become accustomed to practices that have been frankly corrupt and they have not been held to account in any way.  The number of victims has grown steadily and the winning of a major case against two employees of the banks last year however has changed things fundamentally. For years nothing has been done to either stop the cause or recompense the victims.  I think more has been achieved to right that is wrong over the last year and a half than over the past 20.  However, we have still got a very long way to go on this.

A fraud which in my view has been replicated by other offices of both HBOS and other banks is fairly simple so there are many variations on the theme.

A profitable company with tangible assets and with personal guarantees from the Directors and with an overdraft, has the overdraft called in without any notice by the bank.  Very few companies have assets which they can realise instantly.  The bank then puts in advisors onto the board of the company, at very considerable cost.  New accounts are opened with a bank, usually without that company even knowing about it and very high interest rates.  And huge amounts are then borrowed without the owners’ permission.  The company is then run down and wound up.  The bank recovers its loans for the sale of the assets at knock down prices.  And it makes a great deal of money from exorbitant and punitive interest rate heights.

The bank managers get very large bonuses and their friends get the assets at a fraction of their real value.

Business advisors, solicitors, estate agents and insolvency practitioners all make a great deal of money and all are complicit in this.

The bank then goes for the personal assets of the company only for their personal guarantees.  Houses are repossessed and anything valuable is in effect stoked.  The amount recovered by the bank and its associates far exceeds the original loan.

Now, the HBOS Reading case was somewhat different to what went on in the other banks, in that the bank was itself so incompetent that the main fraudsters were able to defraud the bank as well as the customers.  The HBOS fraud uses a basic technique was probably worth near a billion pounds.  It was quite significant.  We only prosecuted on £245m.  It is pretty irrelevant that you prosecute on £245m, or £10m or £1bn.  There is a maximum sentence for fraud and its 15 years.  The main contender in this case got 15 years.  And the main banker involved who pleaded guilty got 13 years.   Only a part of the fraud was actually revealed by the bank, and there are reasons for that.  Sustainably various means on the scope and losses, they have to keep it below a certain figure and internal emails quite clearly show that they would desperately plan to keep the fraud they were prepared to admit to, to below £250m.

The trial lasted nearly four months.  I went on the odd day and there were 13 or 14 people wearing wigs. You can understand how expensive it got.

The Police investigation had gone on for nearly seven years.  I believe that if the bank cooperated fully it would have taken far less time and far less money.  And the concerns over the bank’s less than helpful view on this has been lodged with the Financial Conduct Authority by Thames Valley Police.

At no time until the jury returned its verdict would the bank admit that it was itself a victim.  We don’t know how much but it appears to be into the 100’s of millions.  And the bank had known about the fraud for at least nine years.  there are internal emails discussing it in 2008.  For the next nine years, the bank, which was taken over by Lloyds in 2008, went through the businesses, the houses, the assets, everything they could of those that they quite knowingly had defrauded.

Unlike libor and PPI this fraud against companies was not skimming off the top.  It ruined the companies, it ruined livelihoods, it ruined jobs, it took away farms, it took away property assets and it destroyed families.  One family had 22 attempts made against them by their bank to take their house away.  This was replicated a great number of other times as they realised cases was as many as 22 times.  The vast majority had given up their houses at a much earlier stage.  Did the board know about this?  Yes absolutely.  Large numbers of letters were written to the Chairman of HBOS and Lloyds.  And I’ve seen these letters and had copies of them.

Sir Victor Blank, Sir Winfred Bischoff and Lord Blackwell were all written to in great detail about this.  But nothing was done.  Even when the bank’s own banker pleaded guilty they were still going for the personal assets of those they had defrauded.  And I believe in some cases that is still happening.

Even now, the Professor Griggs’ investigation put in place by Lloyds to recompense victims is basically a travesty.  Lloyds claim 50 of the 72 victims have been recompensed.  There are far more victims than that and as far as I am aware, none of the major claims have been accepted, let alone looked at. Professor Griggs is not independent to the bank.  He is a long-time consultant to the bank.  The bank does not compensate them properly for the damage that has been done to their lives over many years.  There is no accumulative interest for the loss over the past 10 years or more and there is no consequential loss accepted.

Most of the victims are now very elderly.  They are made particularly low offer.  Most have been trying to get compensation for years.  They believe rightly they might do, but if they do not accept the offer they will get nothing.  The offer is accompanied by a gagging order.  They have no choice but to accept.  There is no system of independent appeal against the sometimes the right of compensation.

The banks internal enquiry [conducted by Dame Linda Dobbs] is likely to have been done properly.  However, in fact there was hugely under resource to the staff.  And of course, it opened up a complete bag of worms.  It will take a minimum of about a year to complete.  And I suspect longer.  They’ve not got round yet to interviewing the Police that were involved in this case.

I would very much hope that it will be made public when it does come out under parliamentary pressure.

However, by the time it has been published most of the main board directors of Lloyds will have retired to Portugal and other localities with colossal bonuses and huge pay offs.

I think they should provide an interim report by October this year and I will be asking for that and I think it is possible.

One thing that has come to my attention and I don’t really have the detail of it yet, and have not been able to get a bank to talk about it, is the new software programme that banks have used which allows emails between banks that are instantly deleted and deleted permanently off their hard drives.  If they are trying to stop vast money laundering this has got to be stopped and looked into fairly quickly.

Now, the report of 2013.  This report was written, as you’ve heard by a senior manager, a forensic account.  And it was disclosed by the bank. The Police are already aware of its contents.  It was not used in the HBOS trial.  It was not correctly relevant to the HBOS case.  What the report raises are some devastating details of the cover up of the massive HBOS fraud and the whole lot appears to have approached £40bn in the HBOS accounts.  Major rights issues were then done and what I would have thought are somewhat dishonest and possibly a fraudulent prospectus.  And we’re talking again probably over £20bn.

Now the holding accounts, more than £1bn was reported as far as I am aware in the prospectus.  I will not go into details about the report because it will become public when it appears on the APBG website.

One thing I would emphasise is the report that is written in draft. It wasn’t completed.  The reasons will come out in a moment.  It does however name names and the audit companies involved.  I have no reason to suspect the report is not accurate and I cannot see how those names should continue in public life in the prominent positions many of us still hold.  And I think the behaviour of the companies involved is unacceptable.

But what about the whistle blower?  And I hesitate to call them a whistle blower.  Whilst blower is like something unofficially.  This report was clearly asked for by Lloyds Banking Group, head of audit.  Sue Harris.  And there are ample letters about emails discussing between the two of them.

Lloyds have repeatedly said that the terms of the report was unauthorised and not substantive.  They have consistently discredited the report and the author.  They have denied the report was asked for at the most senior level and continued to say that some was substantiated.  Which it is clearly substantiated in its main premise.  There was a major cover up of both the fraud and the whole of HBOS accounts.  Lloyds Bank continued to deny that there was a fraud for a further three years after the report was written and was seen at board level.  They would not admit that fraud has taken place until the Jury returned its verdict at the end of January last year.  This was even after their own banker had pleaded guilty some months before.

The author of the report was constructively dismissed against her wishes.  And in full light of the London city solicitors’ firm Freshfields was thrown against her; and I gather that cost went into the millions to stop her winning at an employment tribunal.  She was eventually totally out spent and was forced to settle, at I believe a minimal recompense with a comprehensive gagging order and she is now unemployable.

Now I have met with Lord Blackwell subsequent to this and I think at last the bankers realise what huge injustice was done and I hope something is going to be done about that over the next month.  But this whole episode I have to say is disgraceful.

The Head of Audit also left at the same time, or very shortly afterwards.  I presume she was paid off, if not very well paid off, and was given employment.

Now looking at other banks, I believe that similar frauds have been carried out by a number of other banks.  And the recent House of Commons debate has shown this went on nationwide. The sums involved are huge.  I do not know what they are but they probably exceed £100bn.  If proper restitution is taken into account probably rather more.

Many of the frauds seem to be connected across banks and the same names crop up in places mentioned by MPs right across the board.  I believe that Lloyds Bristol business, a number of MPs who have reported it in the House of Commons may be larger than the HBOS fraud and it is yet to be investigated properly in my opinion.  I bought it to the attention of Chief Constable of Avon in Somerset and he tells me it has been investigated.  I do not it has been looked into in any depth by Police Officers who actually understand the fraud in any detail.  I don’t think the victims have even been contacted by Avon and Somerset Police.

What also appears to have taken place is similar frauds from a number of other offices of Lloyds.  And I am repeating what was said in the House of Commons by MPs in all six Parliamentary parties.  I attended one of the debates and I must say it must be about the first time that all six Parliamentary parties, the MPs involved, they all agreed with each other!  And they all had constituents who had been done over by this similar system of fraud.  One of the victims who appeared in front of the Treasurer’s Select Committee was taken down by the BSU officer of Leeds and that was a very large auction company.  And I believe that is still being sorted out.  The bank made it absolutely impossible for him to win a civil case against.

I think it is quite clear that RBS have carried on very similar frauds against business customers.  But take a number of companies by RBS and they have been determined.  But it would appear that the TRT division of Lloyds bought down something like 16,000 companies.  Some of them are probably well outright.  We don’t know how many.  But I guess the impression, the vast majority were viable companies and it was not meant to be a profit centre, it was meant to be a centre to help companies, but it seems to destroy very, very good companies and it made a great deal of money.

If the average company was worth £5m and 12,000 viable companies were destroyed, and some are much larger and some are smaller, we are looking at a loss of £60bn without consequential losses in the RBS alone.

And other banks seem to have been involved in similar frauds and that was Allied & Dunbar and may be others.  Scottish Bank is always a by work of integrity.  Most of the banks seem to derive from there.

I believe the damage to the UK economy has been massive.  SME’s account for 80% of UK employment outside government services.  Huge numbers of people have lost their jobs.

I believe the Treasury ignores this.  They have been aware of it for several years.  The destruction of viable companies by banks started under the Chancellorship of Gordon Brown and was continued under Alistair Darling and George Osborne and Philip Hammond.  Even with their own constituents who have been ruined have bought it to their attention.  I have to say, they have been ignored.  I was walking down the street and I was actually atoned by a lady who was having her mother’s house dispossessed as we walked down the street.  And I don’t know the details of the case but I believe it followed similar scams elsewhere.

I think all seem to fail to understand that SME’s account for far more than the economy than the large party nationals.  Without proper bank support how will these companies expand in the future?  Lloyds are currently carrying a advertising campaign for small business loans.  Its catch phrase is “we’re at your side”.  I would have thought that “at your throat” would be rather more appropriate!

It is interesting that German banks lead a vastly more than they need and how successful their small companies are compared to ours.  I think the interest of the bank should always take empower from the Treasury.  And that is not surprising.

How many civil servants from the Treasury go into banks when they leave their Treasury jobs?  How may Treasury Ministers when they leave Parliament go into very well-paid cosy banking related directorships?  Most of them is the answer.

In 2016, University of Portsmouth estimated, 3 years ago, the value of fraud in the UK as 193 billion.  And that is a figure quoted by National Crime Agency.  6 years ago I heard the Home Secretary say it was running at over 60 billion.  We don’t really know but I think it is around 200 billion today.  It is an organised crime and some of it is committed at the most senior levels of banks in my view.  And HBOS is the only case that was prosecuted and that was at middle rank, not at senior rank.

Less than 1% of fraud is investigated.  That is a staggering amount of money that is stolen and laundered.  If £100k is stolen from a bank through the front door there is a massive Police response.  If £100m is stolen from a company through fraud it is usually ignored.  The Police have neither the capability, capacity nor the money to take on this fraud. The HBOS case has cost Thames Valley £7m.  And only £2m of that can be reclaimed from the Home Office.

Two other Police forces had already turned down the HBSO case and I still don’t know why, it has not been investigated.  There may have been a good reason.  But if Thames Valley had to investigate it, I can assure you nobody else would have.  It would have gone particularly unpunished.

I think there is no wonder this is not investigated by the Police. They simply haven’t got the money to take it on.  It’s not even a priority at the moment for the National Crime Agency.  And it was in great parts because of two individuals, Paul and Nicky Turner, who have been defrauded by HBOS and correlated the case and it was complicated, but actually TVP took it on and I think they both deserve a medal for that.  There was absolutely no desire by Lloyds to investigate internally, even though it was well known about.  The Police in Scotland have never investigated properly the RBS.  Avon and Somerset Police conflicted over a fraud that came out of Lloyds in Bristol. Again, I believe is bigger than HBOS but I don’t have any detail.

The NCA – the National Crime Agency – also refuse to investigate and has taken work from the Financial Conduct Authority and Avon Somerset Police have said there is nothing to investigate.  I personally find that extraordinary.  I am not aware of a single company that was a victim that has had any of the directors questioned.  And I am seeing the director of the National Crime Agency later today and I would like to see that decision reversed.  I would like to see it investigated properly.

I brought the whole affair to Number 10 last year and I wrote a detailed letter to the PM who is an MP in my area.  I also gave the Turnbull report – a report that was written by a lady in 2013 so assuming she has political advice from Number 10.  It was all part of the Cabinet Secretary, Sir Jeremy Haywood who then had a short correspondence and I have had a letter saying that these are very serious allegations, we will look into them and would you like to come and discuss them with me?  I said I thought that would be a good idea.  My office organised this and I wrote to say that I would come and see you.  I then got a letter back saying ‘I’ve taken advice on this and I have been advised not to talk to you’.  Well I find that quite extraordinary.  I wrote a letter back to them and I said it was a classic and would like to know what you were advised, who advised you and why did they advise you?  I didn’t get a reply to that letter!  And I subsequently wrote another letter which I also didn’t get a reply to.  And as I’m elected over one of the biggest areas in the country I find that behaviour extraordinary.

I also ensured that the report was seen by the Crime Agency and the Serious Fraud Office some time ago.

I think one of the standard practices I have found is to close down enquiries of investigations by saying someone else is investigating it.  The parcel then can be passed between the SFO, the Crime Prosecution Service, the National Crime Agency, Financial Conduct Authority, City of London Police and other Police forces.  And that can take years to come to a head.  It’s a great way to do nothing.

Less than 60 million is spent on the SFO and active fraud in the City of London.  That is less than 0.03% of the losses from fraud.  Why is the Treasury not financing this properly?  I find it a conflict of interest, and I’m assured that it isn’t, but until April this year I am trying to challenge the Financial Conduct Authority and his previous job was senior partner of KPMG when KPMG audited the HBOS accounts in 2007 and 2008.  And failed to locate a vast hole in the accounts and a very large fall which I believe they were told about.  They were not told about it and there is a huge amount of confusion by the HBOS fraud.  Certain they are aware of it.

The Chairman of the Financial Reporting Counsel which gave the KPMG audits a clean bill of health last year was in his previous job Chairman of Lloyds.  This is when the cover ups, in my view, were going on, and I find that extraordinary.

The Financial Conduct Authority, the Financial Reporting Counsel and the FSO are controlled by the Treasury.  I think the extent of the Treasury’s desire to cover up banking frauds is well illustrated by correspondence last February after the HBOS cloud burst between the Chairman of the Treasury Select Committee Lord Andrew Tyrie and the Chancellor Philip Hammond.  Lord Tyrie has said why are closing down, or why have you got capability to close down our enquiries and we got a very short response basically saying it is an Act of Parliament and I think it was in 2012 and I am sure their ability to do that was buried in an annexe or an appendix to an annex.  And very few Parliamentarians understood the significance of it.

What’s to be done about it? I don’t believe we can dismantle and destroy the systems that are absolutely critical to the prosperity and our national security.  However, I think they have to be bought under control and there are a number of things that can be done.  I don’t think any of them are that difficult.  I think we must have level system in this country.  Any other major country does.  It should not be possible to take down viable companies by recalling loans over a weekend and giving them no chance to pay back the loan, even when they are capable of doing so.  We need companies to be able to borrow to expand their companies. They will not do so if the loans can be recalled over night and their personal guarantees attacked.  It has shown damage in the UK.  We must ensure that the channel of banks are not just pacemen.  But people who demand ethical standards and enforcement of banking rules.  And understand the rules.  And I think the late Chairman of the Co-Op Bank is an absolute classic example of this.

The Co-Op, like HBOS, was audited by KPMG.  As was Carillion I note.  Vast holes in the accounts in all the companies were found too late.  I have to say having seen that, I wouldn’t have though KPMG were capable of auditing a whelk stall.

I think we should make it a rule that a significant part of a bank must be qualified bankers.  I believe there is only one qualified banker on the board of any of our major banks at the moment.  They are all accountants or businessmen.

I think where clear falls for consumers has taken place at board level, that we should arrest the offenders and prosecute them and if they are found guilty they should be jailed.  They do this is the US and their system is much cleaner than ours.  I think I believe he has grown up with the banking and they are above the law.  That attitude has got to change.  I think you should make a regulatory authority to the Financial Conduct Authority and the Financial Reporting Counsel properly independent from the Treasury.

I think we should stop the assumption until services can move effortlessly onto higher paid jobs in banks that they have assisted, and likewise the FCA.

I think we should see the outside regulatory authorities are also cut.  The Solicitors Regulatory Authority and the Royal Institute of Chartered Surveyors.  Some very odd things have gone on there.  And insolvency practitioners as well.

I think we’ve got to finance the fight against fraud properly.  The money raised from the FCA funds is more than enough to do this.  It has averaged about a billion over the past 5 years.  it goes direct to the Treasury. Around 300 million should go to the Police and the force in the City of London should be greatly expanded.  As should the serious fraud office.  The Police should use the money to form regional fraud units, in the same way as we have regional service organised crime and counter terrorism.  At the moment those Police forces have virtually nothing, they certainly don’t have the expertise.  And I think we’ve got to institute a system of recompense that is independent of the facts, and I believe there are a number of ways to do this.

I think we’ve got to move the 6 year limitations to allow the bank’s lawyers to push cases over the client.

I think we’ve got to restrict the use of personal guarantees and make it impossible for a bank to recover more than the amount of the original and agreed loan from a personal guarantee.  I think that is critical.

I think there should be, and I don’t know how you do it, stop the banks using vast amounts of shareholders money on lawyers defending their own practice in suspect, and sometimes downright corrupt practices.  I know that one bank last year spent very nearly a billion pounds on lawyers.  And the problem with this is that the legal profession is London is hugely dependent on banks for their main business…their main incomes.  And there is a huge reluctance to take on banking fraud by London lawyers.  And I think that needs to be looked at.

I believe that if these measures were taken, and I don’t believe it is either expensive or difficult to do this, but it should be possible to reduce fraud by at least a modest 10% in the first year.  That would be about £20bn.  And I think if we did this properly over a number of years we should bring it down by probably 30 or 40%.  That is a difference of £80bn a year.  It would make a huge difference to the UK and I think we should get on with it and stop fabricating.  If we carry on looking the other way, failing to finance against the fraud properly it will continue to be a massive drain on the UK economy.