Bradford Crown Court has jailed John Edward Rourke, aged 64, of Sildsen, West Yorkshire for a total of two and a half years after he pleaded guilty to fraudulently inducing clients of his firm to make deposits with him of £340,000. It is thought that the full amount taken from clients and others may be up to £900,000.
The prosecution followed a three-year investigation by the Financial Services Authority into Rourke's illegal activities. During the investigation the FSA obtained High Court orders restraining Rourke's conduct and freezing his assets. Rourke breached these orders bycontinuing to accept deposits and disposing of assets, and was jailed twice as a result, in 2001 and then 2002, for contempt of court.
Rourke attempted to prevent witnesses assisting the FSA's investigation and pleaded guilty to perverting the course of justice.
Judge Scott says: “He did everything he could to avoid coming to court and facing up to what he had done.”
On various occasions between 1994 and 2002 Rourke persuaded people to deposit money with him by making a number of false statements which included that the money deposited with him would be invested in a property scheme dealing in repossessed houses and that this scheme was risk-free.
These activities contravened sections 3 and 35 of the Banking Act 1987. Only those authorised to do so by the FSA can accept deposits from members of the public. Rourke had no such authorisation.
Many of Rourke's victims had been clients of his book-keeping firm for many years and the professional relationship he had with them gave him intimate knowledge of their financial circumstances.
Rourke has now been declared bankrupt and it is likely clients will only receive a very small portion, if any, of the sums they deposited. Deposits placed with persons who are not authorised to take deposits are not covered by the Financial Services Compensation Scheme.
The FSA was alerted to Rourke's activities after receiving a complaint from a law firm whose name Rourke had used in forging letters purporting to be from the administrators of his alleged property scheme.
Andrew Procter, FSA director of enforcement, says: “While we have successfully brought Rourke to justice this is of little comfort to those who have fallen victim to his fraud. As is often the way in these cases, the money had already been lost by the time the FSA becameaware of the problem. No matter how plausible or convincing a person may be, consumers need to take action to protect themselves by checking that a firm or individual is authorised to take deposits or sell investments, before parting with their money.”
Consumers can check whether firms are authorised to accept deposits or handle client money by calling the FSA's Consumer Helpline on 0845 606 1234, or by looking at the regulator's website www.fsa.gov.uk/consumer/consumer_help