The former head of North East wealth management firm WealthTek has been charged with a string of offences that regulators say helped fund a “lavish lifestyle” including racehorses and a Newcastle nightclub.
The Financial Conduct Authority (FCA) has charged John Dance with nine criminal offences, including fraud and money laundering, in what it has called one of the most serious and largest frauds it has investigated.
More than 18 months after Tyneside-based WealthTek was ordered to be closed, the financial watchdog has alleged the 50 year-old stockbroker fraudlently abused his position of trust at WealthTek and Vertus Asset Management LLP for his own personal gain.
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Between 2014 and 2023 Mr Dance is said to have transferred more than £64m from client accounts to those he controlled. The FCA says he laundered the funds through his personal and business bank accounts including £723,000 to buy six racehorses, including the high profile Cheltenham Gold Cup runner-up Bravemansgame in 2019. He is also said to have transferred £806,500 in 2014 and £3.9m in 2020 to buy residential and commercial property.
Mr Dance also charged with three further offences of dishonestly making false representations about WealthTek’s regulatory permissions to continue his alleged fraud. The WealthTek founder has been released on bail and is due to appear at Magistrates Court on January 3.
Meanwhile the special administration of WealthTek is still underway with some of the company’s former clients now starting to receive assets and money back. Since the sudden closure of the firm in April last year, clients - many of whom are pension savers - have been left in limbo, unable to access their funds.
Earlier this year a High Court judge recognised the “mental, emotional and financial hardship” caused to former WealthTek clients caused by the shortfall between what they should have been received and what is now proposed to be returned under a distribution plan. The court said it had received letters from some clients conveying a sense of injustice that the costs of returning their assets and money - a proposed £2,300 per person - are to come out of money provided by the Financial Services Compensation Scheme (FSCS) which can make up to £85,000 per client available.
The FSCS funds would otherwise be available to meet shortfalls, of which administrators have found £81.4m missing from WealthTek in a lengthy process which has involved trawling through the firm’s inaccurate books.
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Late last year, a worldwide freezing order on around £40m of assets belonging to Mr Dance was upgraded to a Restraint Order under the Proceeds of Crime Act 2002, preserving them for possible future confiscation should there be a criminal conviction
Therese Chambers, joint executive director of enforcement and market oversight, said: “This is one of the most serious and largest frauds we have ever investigated. We allege that over a period of many years Mr Dance diverted millions of client funds for his own benefit, telling lies and forging documents to cover his tracks. We know this has been a worrying time for people who had their investments caught up in WealthTek and we have tried to keep everyone updated as best we can, given the criminal nature of the offences under investigation. We’re pleased that clients are now seeing their assets returned.”