Craig LaPenna Spared Jail After Court Told He Was A 'Godsend'

A multi-millionaire who ran an illegal money lending racket has escaped jail after he was hailed as a ''godsend'' by borrowers who said his money to keep their businesses afloat when they were refused help from high street banks.

Craig LaPenna, 57, illicitly leant out £1.1m to 30 business associates and friends including his joiner, his barber and even his former bank manager after each failed to get credit from mainstream financial institutions to fund their business ventures.

Some given money under informal loan arrangements hailed LaPenna as ''their rock'' and ''a gentleman" with one saying: “Without Craig's participation, my project would not have been completed due to lack of funding.''

But financial regulators launched a two year investigation into the wealthy businessman and his wife Samantha, 44, after discovering he was not authorised to lend the cash and was making up to £500,000 a year on interest payments alone.

Investigators searched the couple's luxury mansion in a millionaire's row popular with Premier league football stars and discovered paperwork which showed the couple had received £4.3m over one three year period - which including £1.5m from repayments on various loans.

Some borrowers had been charged five per cent interest and others none at all - but it is though one was charged up to 1,000 pc. One small time businessman who borrowed £15,000 from Lapenna lost his business and ended up owing the same amount despite paying £21,000 in interest payments. Another was paying £1,800 every three weeks to service a loan of £15,000.

At Minshull Street Crown Court, Manchester, LaPenna faced jail after admitting illegal money lending offences and converting criminal property but he walked free with a 16-month prison sentence suspended for two years after several borrowers submitted statements to a judge claiming his illicit cash loans had helped save their businesses

He plans to continue his loans business but has now pledged to follow the legal requirements and get the venture properly registered.

The racket operated between 2014 and 2018 after LaPenna - who was licensed as a credit broker in 1989 - applied for a consumer credit licence in 2010 only for it to be rejected due to him failing to produce enough information about his proposed loans procedures.

Investigators learnt of the illegal enterprise in 2017 and subsequently searched the Lapenna's opulent six bedroomed £1.5m property in Wilmslow, Cheshire and examined bank records.

Richard Barraclough prosecuting said: ''One financial investigator calculated  there were at least 30 borrowers and more than 100 loans to a total value of £1,038,585 and that Mr LaPenna was paid £1.5m by those borrowers alone.  Mr LaPenna accepts that some £197,650 worth of illegal loans were made to 19 customers which resulted in repayments of £405,622

''He also accepts that during the period 2014 to 2018 he was engaged in the recycling of monies from the illegal money lending business.  Essentially between January 2015 and 30/4/18 Mr and Mrs LaPenna paid out of their accounts £1.8m and received over £4.3m.

''The analysis of one email discloses that by the end of December 2015 Mr LaPenna expected to receive £9,400 per week by way of loan repayments from 13 borrowers and those payments effectively represented that week’s interest only repayments. If that is a reliable snapshot of the scale of the business at that time it would equate to an annual interest repayment in the region of £500,000.''

One businessman who wanted to buy new machinery for his printing company borrowed £15,000 from LaPenna because he was unable to get a bank loan. But he ended up paying an extra £500 a week interest and ended up paying £21,200 in interest payments alone without paying any the original debt. His firm later shut down. A woman who borrowed £2,000 paid over a total of £4,450.

LaPenna later told investigators he had dealt with people who cannot “go down the normal route” saying many borrowers were old friends.

He added: ''If someone needed a car and cannot go to banks I would lend. The client may also be a struggling company.  I would go into a business which wants money and lend money whilst the borrower sorts out a bridging loan. I would lend in order that a business might expand.''

A friend of Mrs LaPenna was loaned cash to open a restaurant whilst publican Robert Skellern who was loaned £21,000 to refurbish his bar said: ''No way could I have taken his business to the next level without Craig. We were able to achieve a lot together".

Former bank manager Neil Travis was loaned £5,000 for a kitchen before borrowing a further £40,000 for his kitchen and bathroom company.

In a statement he said: ''I needed money quickly and could not get credit from normal lenders.  I get on well with Craig and he was funny, charming and business like. There were no penalties for late payment and no threats or demands if I fell behind.'

Former school friend Gary Churchill said: ''It was often cheaper than using official loans because you could pay off the debt early.  It was a rolling facility and I was never put under any pressure.  Craig is a godsend and a gentleman.''

LaPenna's barber Paul Morgan said: ''I borrowed for my business and to buy equipment for my salon. There was no pressure and I sometimes paid Craig back by cutting his hair.''

In mitigation LaPenna's counsel Chris Daw QC said: ''This is not a case of loan sharking to vulnerable individuals or of using violence or threats to secure repayment.

''These loans were made to businesses, who had been refused credit by banks and other mainstream lenders. Without Mr LaPenna who is a very successful businessman many of them would have gone under and many people would have lost their jobs.

''Most of the borrowers needed the money for a matter of weeks or a few months and were very happy with the flexibility offered by Mr LaPenna - they could pay off the loan as soon as they were in a position to do so, unlike with a bank loan.   Most borrowers paid interest far below the rates of payday lenders like Wonga and the like.

''But because of the high risk nature of the lending Mr LaPenna often lost money where businesses went bust and could not make repayment. In many cases he hasn’t got his money back when businesses have gone bust. Yet still countless clients attest to having received no pressure.

''However he is well aware that he must formalise his lawful and exempt lending in the future in order to avoid the risk of further legal action against him.

''He has taken high level legal advice on this and understands the need for full compliance going forward.  He is completely committed to running his business in a legal and compliant way.''

Sentencing Judge Paul Lawton told LaPenna: ''Your modus operandi was to offer businesses which were excluded from mainstream sources of funding but you knew full well you were committing criminal offences.

''To many, if not all, you were a last financial lifeline but this only highlights the danger of such loans.  Some of your clients see you as a saviour, that much is clear but some found themselves paying in excess of 1000pc interest. Such deals would not be remotely permissible had they been regulated.

''But I accept this is not the sort of lending where heavies go round to your house and put pressure on you if you’re late on a payment. Some have come to you in desperate circumstances and have found their business going under. A number of people have viewed you as a valuable lifeline.''

Mother of four Mrs LaPenna was given a 12 month conditional discharge after she admitted money laundering.