Bloomberg News

Ex-Lloyds Security Chief Gets 2 ½ Years Jail in Fraud Case

September 21, 2012

Ex-Lloyds Digital Security Chief Gets 2 ½ Years in Fraud Case

The Lloyds Banking Group Plc company logo sits on the bank's headquarters in London. Photographer: Chris Ratcliffe/Bloomberg

Lloyds Banking Group Plc’s (LLOY) former head of digital banking fraud and security was sentenced to two- and-a-half years in jail for submitting false invoices totaling more than 2.4 million pounds ($3.9 million).

Jessica Harper, 50, was sentenced to half of a five-year term by a judge in London today. She gave the money to family and friends, including helping some people buy houses.

The fraud at the U.K’s second-biggest state-backed lender is another blow to London’s reputation as a financial center, which has been tarnished by separate revelations that banks rigged the London Interbank Offered Rate and sold inappropriate derivatives to small business customers.

“You were a senior employee in the bank in a position with a high degree of trust at a time when Lloyds was substantially supported by a lot of taxpayers’ money following difficulties sustained by the bank in the financial crisis,” Judge Deborah Taylor said at the hearing.

Harper in August pleaded guilty to submitting fake invoices between 2007 and 2011 and then laundering the proceeds, prosecutors said. Her lawyer, Carol Hawley, argued for a reduced term, arguing that her client confessed and her actions weren’t motivated by greed.

“There is no evidence to support her living an extravagant lifestyle,” Hawley said. “There was no sophistication, this was a simple fraud.”

‘All Consuming’

Harper, who submitted 93 false invoices, has repaid 709,000 pounds, prosecutors said in court. The chances of her paying back the full amount are “unrealistic,” they said.

The proceeds of the fraud bought houses for Harper’s family and financial aid for friends. She had a long history of charity work, Hawley said.

“You disregarded your duties out of a sense of entitlement to take other people’s money for your own benefit and that of your family,” Taylor said.

Harper, who was earning about 60,000 pounds a year, told investigators she deserved the money given the hours she worked.

“She was working under a huge amount of pressure and for a long period of time,” Hawley said. “She describes that period of her life when work became all-consuming. She still today struggles to explain the reason behind her behavior.”

To contact the reporter on this story: Jeremy Hodges in London at jhodges17@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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