UK financial regulators have charged John Dance, former principal partner of WealthTek LLP, with nine criminal offenses in what officials describe as one of the most serious fraud cases ever investigated by the Financial Conduct Authority (FCA).

UK Wealth Manager Charged in £64 Million Client Fund Fraud

The charges allege that Dance orchestrated a sophisticated scheme spanning nearly a decade, systematically diverting more than £64 million from client accounts for personal use. The investigation revealed a pattern of potentially fraudulent activities between 2014 and 2023, during which Dance allegedly channeled client funds into accounts under his control.

“This is one of the most serious and largest frauds we have ever investigated,” said Therese Chambers, joint executive director of enforcement and market oversight at the FCA. “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.”

The 49-year-old wealth manager allegedly used misappropriated funds to finance an extravagant lifestyle, including significant investments in horseracing and nightclub ventures.

In April 2023, Finance Magnates reported that the FCA directed WealthTek LLP, operating under the trade names Vertem Asset Management and Malloch Melville, to halt operations immediately due to significant regulatory and operational concerns.

Britain's FCA charges former WealthTek partner John Dance with 64 million pounds fraud https://t.co/8zJcqMXgVv pic.twitter.com/4xingN6hQi

— Reuters UK (@ReutersUK) December 18, 2024

Racehorses and Properties

Court documents reveal that Dance spent £723,000 on six racehorses, including the purchase of Bravemansgame in 2019. Additionally, he allegedly invested over £4.7 million in residential and commercial property acquisitions across multiple transactions.

The charges include three counts of fraud by abuse of position, three counts of fraud by false representation, and three counts of money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term under the Proceeds of Crime Act. Prosecutors allege Dance made false representations about WealthTek's regulatory permissions to perpetuate the scheme.

The case seems significant for the FCA, with charges brought within 21 months of the investigation's initiation - less than half the average time for similar cases. The regulatory body has maintained a restraint order against Dance's assets to preserve them for potential future confiscation.

8 in 10 Investors Will Receive Full Compensation

Meanwhile, the special administration of WealthTek continues to process client claims, with approximately 84% of affected investors expected to receive full compensation.

“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,” added Chambers. “We’re pleased that clients are now seeing their assets returned.”

Dance has been released on bail and is scheduled to appear at North Tyneside Magistrates' Court on January 3, 2025.

WealthTek, previously known as Vertus Asset Management LLP, operated under various regulatory arrangements before obtaining direct FCA authorization in 2020.