West Yorkshire book keeper jailed after defrauding clients of over 850,000

The prosecution followed a three year investigation by the Financial Services Authority (FSA) into Mr Rourke's illegal activities. During the investigation the FSA obtained High Court orders restraining Mr Rourke's conduct and freezing his assets. Mr Rourke breached these orders by continuing to accept deposits and disposing of assets, and was jailed twice as a result, in 2001 and then 2002, for contempt of court.

Mr Rourke attempted to prevent witnesses assisting the FSA's investigation and pleaded guilty to perverting the course of justice.

In sentencing him, His Honour Judge Scott described him as a "silver tongued rogue" and said:

"He did everything he could to avoid coming to court and facing up to what he had done."

On various occasions between 1994 and 2002 Mr Rourke persuaded people to deposit money with him by making a number of false statements which included:

• that the money deposited with him would be invested in a property scheme, dealing in repossessed houses;

• that this scheme was risk free; and

• that very high returns could be achieved.

These activities contravened sections 3 and 35 of the Banking Act 1987. Only those authorised to do so by the FSA can accept deposits from members of the public. Mr Rourke had no such authorisation.

Many of Mr Rourke's victims had been clients of his book-keeping firm for many years and the professional relationship he had with them give him intimate knowledge of their financial circumstances.

Mr Rourke has now been declared bankrupt and it is likely clients will only receive a very small portion, if any, of the sums they deposited. Deposits placed with persons who are not authorised to take deposits are not covered by the Financial Services Compensation Scheme.

The FSA was alerted to Mr Rourke's activities after receiving a complaint from a law firm whose name Mr Rourke had used in forging letters purporting to be from the administrators of his alleged property scheme.

Andrew Procter, FSA director of enforcement, said:

"While we have successfully brought Mr Rourke to justice this is of little comfort to those who have fallen victim to his fraud. As is often the way in these cases, the money had already been lost by the time the FSA became aware of the problem. No matter how plausible or convincing a person may be, consumers need to take action to protect themselves by checking that a firm or individual is authorised to take deposits or sell investments, before parting with their money."

Consumers can check whether firms are authorised to accept deposits or handle client money by calling the FSA's Consumer Helpline on 0845 606 1234, or by looking at the regulator's consumer website.

Notes for editors

1. Relevant sections of the Banking Act 1987

   Rourke was prosecuted under section 3 and section 35 of the Banking Act 1987 rather than for like offences under the Financial Services and Markets Act 2000 because the majority of the offending took place prior to commencement of the later legislation.

   Section 3 of the Banking Act 1987: provides that no person shall in the United Kingdom accept a deposit in the course of carrying on a deposit taking business unless authorised to do so by the FSA or unless otherwise exempt under the Act. Any person who contravenes this section is guilty of a criminal offence.

   Section 35 of the Banking Act 1987: creates the offence of fraudulent inducement to make a deposit where a person knowingly or recklessly makes a misleading false or deceptive statement or conceals material facts to induce another person to make, or refrain from making, a deposit or to enter into an agreement for that purpose. Breach of section 35 is a criminal offence.

   The Banking Act 1987 was repealed and replaced by the Financial Services and Markets Act 2000.

2. Relevant sections of Forgery and Counterfeiting Act 1981 ("the Forgery Act")

   Section 1(1) a person is guilty of forgery if he makes a false instrument, with the intention that he or another shall use it to induce somebody to accept it as genuine, and by reason of so accepting it to do or not to do some act to his own or any other person's prejudice.

   Section 3 it is an offence for a person to use an instrument which is, and which he knows or believes to be, false, with the intention of inducing somebody to accept it as genuine, and by reason of so.

3. The Common Law offence of doing acts tending to pervert the course of public justice.

4. The previous contempt of court cases against John E Rourke are set out briefly in the FSA's press releases: FSA/PN/139/2001 issued October 2001 and FSA/PN/093/2002 issued on 19 September 2002.

5. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.

6. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.