HSBC ignored Jersey fraud warnings
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A leak of data detailing alleged illegality at a Jersey trust company has revealed how corporate giants HSBC and Liberty Global appear to have failed to adequately investigate concerns over a major fraud after an heiress accused her businessman father of draining millions from trust funds set up to support her and her extended family.
According to documents and admissions made in court, in 2012 directors of a trust management company took out a £6.5m loan from HSBC secured by a grand manor house owned by a trust fund meant to support Tanya Dick-Stock. The company told HSBC the loan could be repaid with funds from another trust supporting her, and used documents to “prove” it that a US court found had been forged.
The company making these false claims, Pantrust International, was a successor to La Hougue, a Jersey trust company. John W Dick, a prominent businessman and non-executive director at the telecommunications company Liberty Global, owner of Virgin Media, had been described as having been the beneficial owner of La Hougue by Jersey lawyers in 2014.
Pantrust’s managing director Richard Wigley admitted in a US lawsuit to giving HSBC false information when the company applied for the loan. Wigley claimed that Dick had told him to do “what was necessary” to secure the money. Dick denies Wigley’s allegations.
However, repeated calls for the bank to investigate were seemingly ignored. HSBC were first made aware about concerns over the loan as early as May 2015. But despite receiving emails from Dick-Stock’s accountants and her husband, Darrin Stock, which the Bureau has seen, the bank said it could only answer queries from its clients, the trustees – the very people Dick-Stock accuses of defrauding her.
During a meeting with two police officers from Jersey’s financial crime unit in March last year, the couple’s accountants claimed that if HSBC had more appropriate due diligence the fraud might have been easily uncovered. In June, the police unit informed the accountants that it had reviewed the material it had received and the matter would not be taken any further because there was no realistic prospect of a conviction.
Dick-Stock told police that she believed the loan was used to repay her father’s personal debts, despite him not being a beneficiary of the trust – a claim which if proven in court would effectively mean funds from the trust had been stolen. Dick himself was not a beneficiary of the trust and his only official involvement was to contribute assets to it. His daughter is now suing him in the US, basing her allegations on a cache of thousands of company documents she found at St John’s Manor, and subsequently shared with journalists. Dick denies the allegations and is defending the claim; the case is ongoing in a Colorado court.
She also claimed that the trust’s assets have been sold off to repay the loan. These include St John’s Manor, one of the most prestigious homes in the Channel Islands, which was sold earlier this year after being listed for £17.5m.
La Hougue said the allegations put to it by the Bureau were “blatantly false”, without detailing what the supposed inaccuracies were, and said the truth would be established before the courts.
HSBC has rarely strayed too far from controversy over the past decade. In 2012, the bank agreed to pay a £1.2bn fine for its role in laundering Mexican drug money through the US and breaching sanctions on Iran. It also acknowledged that it mis-sold mortgage-backed securities in the run-up to the financial crisis, was involved in rigging foreign-exchange rates and admitted that its Swiss private bank held accounts for tax-dodging clients.
HSBC told the Bureau: “We can’t comment due to client confidentiality. HSBC fulfils all regulatory requirements to report suspicions of financial crime and co-operate fully with law enforcement investigations.”
In July and August 2019, Darrin Stock and the couple’s accountants also sent letters and emails to a top executive at Liberty Global, detailing the allegations of malfeasance.
“The matters which we have reported are very serious and they are not simply going to go away,” Stock wrote in a July 2019 letter. “We will not allow [Dick] to muddy the water and deflect from his actions or sweep this under the rug.”
Liberty Global has not responded to the communications, according to Stock, and Dick retains his seat on the board. In a statement to the Bureau, Liberty Global said it would not be drawn into “the family dispute”. A spokesperson added: “John Dick has been a member of our board of directors since our inception in 2005, and has been an outstanding contributor for that entire period.”
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Illustration by Daniel Stolle for The Bureau of Investigative Journalism
