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UK's FCA obtains its first Serious Crime Prevention Order for illegal money lender

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Editorial Staff

Sixty-four year old Dharam Prakash Gopee has been convicted of being an illegal money lender. At Southwark Crown Court in London last week he was sentenced to three and a half years in jail. But it's the Financial Conduct Authority's action that makes the case interesting.

According to the FCA, the SCPO will "will severely restrict his ability to carry out this type of crime in the future."

That, of course is a matter for debate - "restrict" ? Not really: if he's determined to do it, he'll do it. But it will provide a serious disincentive to do it.

Gopee was a loan shark. The FCA described his activities as "an illegal lender despite being refused a consumer credit licence by the OFT, [and without] securing any authorisation from the FCA. He loaned money to vulnerable consumers at high rates, securing the loans against their property, and then sought to take possession if they failed to pay. Over the 4 year period, his own loan books showed that he issued approximately GBP1 million of new loans and took in at least GBP2 million in payments from old and new consumers, none of whom were aware that did not have a licence."

The SCPO will begin on Mr Gopee’s release from custody, and will last for five years. It includes conditions prohibiting him from conducting any business in the credit sphere, limits the number of bank facilities he is permitted to operate, and requires him to make disclosures of those banking facilities to the FCA. Breaching the terms of the order is a criminal offence, punishable by up to five years' imprisonment.

- FCA statement

Gopee had already been banned from acting as a company director. He was disqualified on 5 May 2016 for 15 years, the maximum permissible period under the Company Directors Disqualification Act 1986. A number of his companies have been wound up in the public interest following proceedings by the Official Receiver and he has also been the subject of a restraint order obtained by the FCA on 25 June 2015 under the Proceeds of Crime Act 2002. The FCA had to bring two sets of proceedings against Mr Gopee for contempt of court in relation to repeated breaches of that restraint order.

In April 2016, having denied various breaches - including failing to disclose assets, continuing to deal with assets, opening and using new accounts - Gopee was found to be in contempt and imprisoned for a term of 18 months. He was released early by the court in September 2016 having promised to comply with the order. However, he went on to commit various additional breaches. Further proceedings were therefore brought against him and on this second occasion, having admitted the new breaches, he was imprisoned for a term of 15 months in October 2017. Gopee continues to serve his 15 month term of imprisonment for contempt and his sentence for the recent conviction will begin after that term has been completed in June 2018. Proceedings have now begun at Southwark Crown Court to confiscate the proceeds of Gopee’s criminal conduct.