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Prize-winning racehorses and a nightclub in Newcastle were financed by John Dance using £64m of client funds from his wealth management business, according to criminal charges brought against the WealthTek boss by UK regulators.
The Financial Conduct Authority said on Wednesday it had laid nine charges against Dance, including multiple charges of fraud and money laundering.
Dance allegedly used his position at WealthTek and his Vertus operation “for his own personal gain,” taking money from clients’ accounts “to fund a lavish lifestyle and other business interests, including horse racing and a nightclub” , the FCA said.
WealthTek, also trading as Malloch Melville, was placed into administration last year following an FCA application to the High Court as it sought to protect client funds.
The watchdog charged Dance, 50, with converting or transferring criminal property by transferring money from his clients’ funds to his personal and business bank accounts.
In one such move, he is said to have forked over £723,000 in 2019 to acquire six racehorses, including Bravemansgame, who won the 2022 King George VI Chase at Kempton Park and was runner-up in the Cheltenham Gold Cup last year.
The FCA alleges that Dance took money from client accounts to finance the purchase of residential and commercial properties, including transfers of £806,500 in 2014 and £3.9 million in 2020.
The regulator said it had also charged Dance with three further offenses of dishonestly making false representations about WealthTek’s legal authority to continue its alleged fraud. The company had been regulated by the FCA since January 2020, previously trading as an Appointed Representative of Sapia Partners.
“This is one of the most serious and largest frauds we have ever investigated,” said Therese Chambers, joint executive director of enforcement and market surveillance at the FCA.
“WealthTek’s special administration continues and its clients are beginning to receive their assets and compensation,” the FCA said. “About 84 percent of affected people will be fully compensated.”
Chambers acknowledged it was “a worrying time” for WealthTek investors and said: “We are pleased that customers are now seeing their assets returned.”
Dance, who is subject to a restraining order to secure his assets for possible future confiscation pending the outcome of a trial, has been released on bail and will appear at North Tyneside Magistrates’ Court on January 3.
Lawyers for Dans did not immediately comment.