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Prize-winning racehorses and a Newcastle nightclub had been financed by John Dance utilizing £64mn of consumer funds taken from his wealth-management agency, in response to legal expenses introduced in opposition to the WealthTek boss by UK regulators.
The Financial Conduct Authority mentioned on Wednesday it had introduced 9 expenses in opposition to Dance, together with a number of counts of fraud and cash laundering.
Dance allegedly used his place at WealthTek and its Vertus operation “for his personal private achieve,” taking cash out of consumer accounts “to fund a lavish life-style and different enterprise pursuits together with horseracing and a nightclub,” the FCA mentioned.
WealthTek, which additionally traded as Malloch Melville, was put into administration final yr after an software to the Excessive Court docket by the FCA because it sought to guard buyer funds.
The watchdog charged Dance, 50, with changing or transferring legal property by shifting cash out of his shoppers’ funds into his private and enterprise financial institution accounts.
In a single such transfer, he allegedly transferred £723,000 in 2019 to accumulate six racehorses, together with Bravemansgame, which gained the King George VI Chase at Kempton Park in 2022 and was a runner-up finally yr’s Cheltenham Gold Cup.
The FCA alleges that Dance moved cash out of consumer accounts to finance purchases of residential and industrial property, together with transfers of £806,500 in 2014 and £3.9mn in 2020.
The regulator mentioned it had additionally charged Dance with three additional offences of dishonestly making false representations about WealthTek’s regulatory permissions to proceed his alleged fraud. The corporate had been regulated by the FCA since January 2020, earlier than which it traded as an appointed consultant of Sapia Companions.
“This is without doubt one of the most severe and largest frauds we have now ever investigated,” mentioned Therese Chambers, joint government director of enforcement and market oversight on the FCA.
“The particular administration of WealthTek is continuous and its shoppers have begun to obtain their property and compensation,” the FCA mentioned. “Roughly 84 per cent of individuals affected shall be compensated in full.”
Acknowledging that it had been “a worrying time” for traders in WealthTek, Chambers mentioned: “We’re happy that shoppers are actually seeing their property returned.”
Dance, who’s topic to a restraining order to protect his property for potential future confiscation pending the end result of a trial, has been launched on bail and is because of seem at North Tyneside Magistrates’ Court docket on January 3.
Legal professionals for Dance didn’t instantly present a remark.
