Castlegate chief is convicted

ROY JOSEPH Wharton, a Reading-based businessman, has been convicted on two charges of fraudulent trading that involved millions of pounds invested by elderly people in his Castlegate loans group, writes John Willcock.

The Serious Fraud Office brought the charges against Wharton, 61, at Oxford Crown Court, where a jury convicted him yesterday.

The jury found that Mr Wharton had dishonestly and fraudulently mismanaged funds placed in Castlegate Securities and Castlegate Group Holdings.

Mr Wharton built the Castlegate group from a small unsecured lending operation into a group of companies managing secured loans. When it went into liquidation in 1990 it had pounds 43.9m under management and total losses of pounds 35m.

Investors were invited to place money in off-the-shelf companies that obtained consumer credit licences. Castlegate acted on behalf of the lending companies, producing loan applications, conducting status inquiries, valuing properties and running loan accounts. The funds were mostly lent to property speculators, and the structure collapsed when the recession hit.

Wharton is awaiting sentencing.