Owner John Dance facing fraud investigation as regulator reveals potential £80m black hole

Racehorse owner John Dance is being investigated over criminal offences of fraud and money laundering as financial investigators revealed on Wednesday they were aware of a potential black hole of more than £80 million in client assets and money associated with his wealth management business.

In addition, Dance has had assets frozen up to the value of £40m as part of a Financial Conduct Authority (FCA) investigation into the company he founded, WealthTek LLP, and him as principal partner.

In a statement, the FCA said its regulatory and criminal investigation included potential regulatory breaches relating to "client money and custody assets, and criminal offences of fraud and money laundering".

The FCA said it was aware of a potential shortfall of £81.4 million in client assets and money associated with WealthTek as at April 6 this year, the day the FCA ordered three companies owned by Dance to cease operations after uncovering "serious regulatory and operational issues". Working in partnership with the FCA, Northumbria Police arrested Dance on April 4 and he was interviewed under caution.

The FCA secured High Court orders to freeze his assets and place WealthTek, Vertem Asset Management and Malloch Melville in judicial administration.

The statement said while the order restrained and prevented Dance from dissipating any of his identified assets, it did not preclude him from "claiming reasonable living expenses or from continuing to operate his horse business or any other existing business unrelated to the matters featured in the proceedings brought by the FCA to date".

Horses in Dance's ownership could not originally run or be entered in races following the announcement of the investigation, preventing Cheltenham Gold Cup second Bravemansgame from taking part at Aintree in April. The Paul Nicholls-trained star was transferred to the sole ownership of Bryan Drew before finishing third in the Punchestown Gold Cup.

Bravemansgame: Gold Cup second and King George VI Chase winner was joint-owned by John DanceCredit: Steve Davies

Last week horses previously registered to Dance were permitted to run again under the banner of Coverdale Stud or Titanium Racing. The BHA said on May 22 that the FCA had "agreed to sufficient ongoing funds being released to cover the costs of Mr Dance's racing operations, in accordance with the terms of the High Court's freezing order".

However, it added that any prize-money or "other business profits" from racing would be returned to the court-supervised administration.

James Horton, who trains many horses previously in Dance's ownership, saddled his first runners since April 1 last Saturday.

Dance's other notable horse he owned was six-time top-level winner and Classic heroine Laurens, while Vertem Asset Management was the sponsor of the Group 1 Futurity Trophy at Doncaster and Eider Chase at Newcastle.

Read these next:

Horses formerly owned by John Dance permitted to run after agreement reached over funding 

John Dance horses shrouded in growing uncertainty as more details emerge of FCA investigation 

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