The victims of a £2.9m fraud by a Newcastle financial adviser are looking into taking legal action against his network.
Alok Dhanda’s 41 victims were collectively deceived over a period of seven years while the 53-year-old was an appointed representative of TenetConnect for all but the last two months of his career as a financial adviser.
On 19 December Dhanda, who won Citywire’s New Model Adviser of the Year award in 2006, was jailed for five years and eight months at Newcastle Crown Court on 37 charges of fraud, all of which he admitted.
Judge Brian Forster QC was told how Dhanda convinced victims they were buying property in India but actually spent their investments on gambling, holidays and an extravagant lifestyle.
As well as the ponzi scheme, Dhanda went to his victims, who saw him as a personal friend, for loans claiming he had fallen on hard times, the court heard.
Retired firefighter Barry Mitchell, of Morpeth, lost £115,000 of his savings through investments with Dhanda from January 2012.
The 59-year-old said Dhanda’s office was decorated with pictures of him playing golf with former England manager Sir Bobby Robson as well as photos of himself with other Newcastle United players which prompted him to trust Dhanda.
He said: “We paid out for three life insurance policies which were very expensive because he said we would get the money back, but of course we didn’t get any.
“He came to our house once and explained he was leaving his business because his staff weren’t up to the job.
“I believe they smelt a rat because the next thing we know we had a visit from the fraud squad. He has admitted he wasn’t regulated correctly. Why was he allowed to get away with this sort of thing? We are in the early stages of putting together a legal challenge against Tenet.”
James Adkin, prosecuting, told the court Dhanda squeezed every possible penny from his unsuspecting victims, claiming his sister-in-law was seriously ill, that he hadn’t enough money to feed his children, and needed to travel to India because of family problems.
Dhanda, of Grove Park Square, Gosforth, Newcastle, admitted 37 fraud charges.
The court heard 41 investors lost a total of £2,909,762.22 in the fraud.
According to the Financial Services Register, Dhanda was linked with TenetConnect from December 2001 until September 2013.
In September 2013 he became linked with Truly Independent until he left the register two months later in November.
Investigating officer DC Martin Gibson said after the case that Dhanda was finally caught when in 2013 he asked an elderly client on two occasions to withdraw £10,000 from her building society account and lend it to him.
The second time, staff at the building society raised concerns by issuing a suspicious activity report which the National Crime Agency forwarded on to Northumbria Police.
Dhanda was arrested and interviewed by officers in October and December 2013 before being charged with 13 counts of fraud by false representation in March 2014.
His house and business address were searched and officers found a large stash of money totalling £11,000 and papers regarding his business which they took away to examine. During the search a briefcase full of condoms was found.
On examining the father of two’s phone, officers discovered the contact details of a number of escorts.
During an interview police officers asked Dhanda if he knew how much he was repaying each month to people he had borrowed money from. He did not know and was surprised to learn it was approximately £31,000.
DC Gibson said only a small amount of the money he borrowed was actually invested in Indian property – with three properties in Bangalore and two in Goa.
He said Dhanda approached one of his clients for a loan after her husband had died, knowing she would be receiving a life insurance payout.
Despite the police investigation Dhanda continued to ask his clients for money and in December 2013 he asked one of his clients for £15,000 which he said would be invested in an Indian bank account.
But he then used the money to fund a trip to London where he spent three nights at the Grosvenor House Hotel and gambled the rest.
Sentencing Dhanda, Judge Forster told the court: “It is clear from the prosecution’s opening that you have betrayed those who trusted you.
“You targeted those of a charitable inclination and took advantage of their good nature.
“You put forward a dream world in which their investments could not fail.”
DC Gibson said: “He knew the majority of his clients personally and had known them for many years. A lot of his clients were sons and daughters of people he knew for many years.
“But his greed was so large that he didn’t have a care for the damage he was going to cause.
“He used whatever means he could to maintain his lifestyle and was oblivious to whoever he hurt in his wake.”
He added that the investigation into Dhanda is continuing and that his legal team has until February to provide a comprehensive list of his assets, which will be used to raise money to help repay his victims in the spring.
Tenet declined to comment on whether it was aware of Dhanda’s crimes or whether he left the network in September 2013 of his own accord or not.
When asked if Tenet was aware that Dhanda’s victims might seek redress from the network, group regulatory director Gill Davidson said: “It is not appropriate to comment on any particular case.
“However, we always keep our processes under review and operate in accordance with our regulatory and contractual obligations.”
The FCA declined to comment on whether it is investigating Dhanda.
