4th March 2016[UPDATED 10TH MARCH 2016 TO INCLUDE A STATEMENT FROM POLICE SCOTLAND] It is increasingly apparent that our supposedly “independent” prosecutorial agencies — which include the Crown Prosecution Service in England and Wales, and the Crown Office and Procurator Fiscal Service in Scotland — are useless when it comes to high-level fraud committed by British banks.
The reasons for their lack of appetite for looking into such frauds are many and varied. They include laziness, fear of failure, lack of kudos for success, the sheer hassle of probing complex fraud committed by banks and their boards, a legacy of misguided faith in the integrity of “professionals” like bankers, fear of destabilizing the financial system, a lack of resources, as well as the fact juries sometimes struggle to understand impenetrable financial jargon and arcane legal pleadings.
There may be more sinister reasons. One is a rumoured edict from the chancellor of the exchequer, George Osborne. This possibility is linked to the vested interest that H.M. Treasury has in sweeping bank frauds under the rug, as a result of its continued ownership of large swathes of the British banking sector and desire to the preserve at least something of what is left of the value of its equity stakes in the likes of Royal Bank of Scotland and Lloyds Banking Group .
There’s also the (partial) monopoly that the Financial Conduct Authority, a regulator considered to be dangerously “captured” by the sector it purports to regulate, retains over decisions as to whether “enforcement action” should be taken in response to instances of financial dodginess.
Writing in my book about the collapse of Royal Bank of Scotland and the global banking implosion, Shredded: Inside RBS The Bank That Broke Britain (published in hardback in June 2014 and in paperback in October 2015), I said:-
…if the UK state had been so minded, it could readily have prosecuted a number of RBS executives for alleged crimes including fraud, conspiracy to defraud, fraudulent trading, false accounting and regulatory offences under the Companies Act 2006. Unfortunately, however, prosecuting high-level financial crimes is notoriously difficult, especially if hard evidence like emails and secret recordings are not available. Another reason is that, unlike countries like Iceland and Nigeria, the UK doesn’t have much appetite for the prosecution of mainstream bankers. So what we have had instead are diversionary tactics, faux outrage and political bluster.
In the past few days, it has also emerged that, despite the positive reassurances I received by letter from First Minister Nicola Sturgeon in May 2015 (in her letter she assured me that the Crown Office continued to investigate alleged criminal wrongdoing by RBS as part of the wide-ranging criminal probe that commenced in December 2011, and that “the inquiry is complex and the volume of documentation that the investigators are considering is huge”) the COPFS now appears to be blocking Police Scotland probes into alleged frauds committed by Scottish-based banks, including RBS.
In this Open Letter to Sturgeon, Nigel Henderson — who lost his thriving hotels business, which included hotels in Montrose and Portree on the Isle of Skye, as a result of what appears to have been fraud committed by RBS — berates Scotland’s first minister for the blind eye that her government and the Crown Office appear to be turning to instances of wrongdoing committed by Scottish banks.
It’s a great letter. Please read it.
Dear First Minister,
In your letter in response to questions raised by Ian Fraser dated 16 May 2015, you assured him that the Crown Office and Procurator Fiscal Service is actively investigating crimes potentially committed by Scottish-based banks. This followed a Crown Office press release dated 2 July 2012 in which it confirmed it was investigating misconduct by Scottish banks. You concluded your letter to Fraser by stating that, if criminality is uncovered, the Lord Advocate has indicated that criminal proceedings will be instructed.
It is the last sentence that I take issue with, and why I now inform you of the factual position which contradicts the assurance that was given to you by the Lord Advocate last year.
Five corporate victims of the Royal Bank of Scotland last November made complaints to Police Scotland in Dundee, providing them with very clear evidence, with mine supported by counsel’s opinion, that identified fraud by RBS. During a telephone conversation with Detective Sargeant Ian Whittle of the Police Scotland’s Economic Crime Unit in Dundee, on or around 10 February, I was assured that my submissions, along with those of my fellow victims, had been passed to the Crown Office.
However, when I asked during that conversation why we had not received any progress report or even acknowledgement from the Crown Office, D.S. Whittle told me that that it would be at least a one-year investigation, at the end of which the Crown Office “would not pursue, and it would therefore be a waste of police resources”. By implication, Whittle was saying the prosecutorial agency had instructed the police that no further investigations should be pursued into alleged frauds committed by banks.
I conveyed this information to one of my fellow victims, who also telephoned D.S. Whittle, and he received the same information. When pressed, D.S. Whittle stated that he was prepared to be quoted on the attitude of COPFS. However when James Hurley, a journalist at The Times, telephoned D.S. Whittle for comment, Whittle refused to take the call.
It would appear from D.S. Whittle’s comments that the Crown Office has no intention of prosecuting bankers for alleged crimes, even in instances where it has been presented with compelling, or indeed irrefutable, evidence.
I understand the Lord Advocate stood before the Holyrood parliament and intimated that the police have a duty to follow the evidence in relation to the alleged mortgage fraud being linked to Michelle Thomson MP. That is all well and good. But surely Frank Mulholland recognises that, were following evidence to become an arbitrary duty, and cease to be a principle that is universally applied, the Scottish justice system will be fatally undermined.
In England and Wales, informed commentators have made clear that Whitehall has exerted pressure to block enquiries and the prosecution of crimes committed by the main UK banks and their senior executives and senior managers. Until D.S. Whittle made his remarks I had assumed this was not the case in Scotland.
The Tomlinson Report, published in November 2013 highlighted widespread malpractice by the RBS’s global restructuring group – also referred to as its “vampire unit”. The report made clear that GRG influenced the decisions of the companies and businesses under its control and acted as shadow directors to ensure that the companies’ finances were secured for the sole benefit of the bank and not the creditors, shareholders or owners of these businesses (see attached excerpt). I believe that such conduct is criminal and fraudulent and that the perpetrators must be brought to justice.
Iceland has shown the way in dealing with criminal bankers. If that country has the legal expertise to prosecute, it is barely credible that in Scotland, with its a proud history of producing world-renowned experts in many fields, the Crown Office cannot engage expert legal minds well acquainted with banking and fraud to prosecute. Perhaps it is so incompetent that it cannot understand the nature of the alleged criminality committed by RBS. I and many of my fellow victims have spoken with a number of eminent English based Queens Counsel, some of whom have provided opinions to support the allegations of the fraud committed by RBS in particular. Yet the Crown Office point blank refuses to respond to the submissions with evidence provided to it.
The wilful blindness displayed by the BBC in the Savile enquiry ought to serve as a wake up call to all in positions of influence. In a different, but equally devastating manner, governments, police and prosecutors are turning a blind eye to historical and continuing fraudulent conduct of the banks.
I fully accept your position, outlined to Ian Fraser that it would be inappropriate for you to intervene in independent police and prosecutor’s enquiries. However, it has now reached the stage where a section of society appears to have been granted immunity from prosecution for crimes it has committed and continues to commit.
I just pose this question to you – do you wish to preside over a country where the law favours a select few to the severe detriment of the many? Do you not recognise that if allowed to persist, such a situation can only lead to anarchy and unrest?
One only need to learn the historical lesson from the French Revolution of 1789 and its cause; being the elites out of touch with the majority. The French stood up to a gross abuse of power. This country does not have a history of such rebellious events; however tens, if not hundreds of thousands of SME businesses have been crippled by the criminality of bankers. Millions have been forced into hardship as a consequence of the havoc wrought by the bankers and the billions of pounds required to support the banks. Yet the perpetrators escaped any censure and continue their reckless conduct with seeming impunity. Those in the Westminster bubble appear ignorant of reality. One might have hoped for better from the politicians in Holyrood.
The perception is that you ignore and condone law-breaking by bankers, and this does your administration very few favours. I would respectfully suggest that you have a golden opportunity to address this by following Iceland’s lead and indicating that you favour a levelling of the judicial playing field – by issuing a clear, concise statement that your government will no longer tolerate COPFS’s apparent granting of immunity to banks for their criminal behaviour and unwarranted persecution of SMEs. That way, I believe you could gain the respect of the vast majority of the UK’s 64.1 million residents. You may care to include the fact that there is clear evidence and impartial legal opinion supporting the allegations of the banks’ fraudulent activities. I and many of my colleagues would be more than than willing to meet and share our files with you.
Should the Crown Office persist with its refusal to allow the police to investigate alleged crimes committed by banks and bankers, I and my fellow victims will have no choice other than to follow the legal advice that we have been given and pursue them privately through the criminal courts.
There could be no clearer evidence of hypocrisy in this country, and from you as first minister, were you to continue to assure the electorate that your government is committed to social justice, at the same time as your government is presiding over a two tier justice system in which bankers are above the law. Such a situation would be in direct contradiction to the motto that adorns every courtroom in Scotland assuring citizens that we are all subject to the law and equal in its eyes.
NIGEL K HENDERSON
Police sources deny the Crown Office is preventing them from pursuing investigations into alleged fraud committed by Scottish banks.
In an emailed statement, Police Scotland said they had been instructed by the COPFS that “there are no grounds for criminal investigation in this specific case involving one complainer”. The statement added: “Further, please be aware the Det Sgt Ian Whittle has never made such a comment about a ‘block’ being in place with regards to this investigation, and he does not in any way believe COPFS is blocking justice in relation to this – or any other – matter.”