Fundingsecure director Richard Luxmore created “false and fraudulent documentation so as to conceal” payments of £8.15m, court papers claim

Following lengthy correspondence, a cache of court documents was finally released in the matter of Fundingsecure Ltd v Mark Damian Clarkson, a claim currently progressing at the Business and Property Courts in Manchester.

Fundingsecure Ltd were a so-called peer-to-peer lending company who acted as an agent between borrowers and often many hundreds of retail lenders. These lenders collectively financed loans displayed on the FundingSecure website and were purportedly secured against property and chattels.

FundingSecure were fully authorised by the FCA and ultimately were placed into in administration in October 2019 “partly because the company could not support the costs of ongoing litigation”.  It is understood the litigation rights for this action were sold to Asertis Ltd.

Mr Clarkson, the first defendant listed in the case, was one of the borrowers on the platform. In admissions made by Mr Clarkson in his amended defence statement dated May 2020 several other borrowers on the FundingSecure Platform “acted as nominee or agent for MC”.

It is understood that one of these is a £2.95m loan purported to be secured against ‘Land in Lytham St Annes’ although it is claimed FundingSecure have “so far identified £8,155,552” paid out to MC.

In their Particulars of Claim FundingSecure allege that Richard Luxmore targeted investors who they thought were less likely to conduct due diligence checks. They refer to an email in which Mr Luxmore asked what the minimum amount of funding required for a certain venture of MC’s would be on the basis that “Larger loans attract larger investors who do their own due diligence with regards to property and client“

It is understood Mr Clarkson denies any wrongdoing and considers the sums advanced as “Commercial Loans” which are to be repaid to FundingSecure “in full together with interest in due course”.

The following are quotes taken directly from the Amended Particulars of Claims dated October 7th 2019 accompanied by a statement of truth by Carl Rupert Scott Davies, at the time a director of Fundingsecure Ltd:

In or around late 2015 or early 2016, until around November 2018, RL began the process of taking monies from the Claimant’s client and/or company account and paying them to MC and/or MC’s associates.

RL, MC and/or the rest of the Defendants and/or each of them combined, agreed and conspired together to injure and/or use unlawful means against the Claimant with the intention of causing it harm.

RL and MC devised a scheme whereby RL would procure the advancement of the wrongfully paid sums to MC and/or his associates in breach of his duties particularised above and so as to cause damage and/or injure the Claimant.

RL recorded payments made to MC and/or MC’s associates on a spreadsheet privately controlled and managed by him and not disclosed at any point in time to the Claimant.

RL and MC concealed the scheme including inter alia by:

– Targeting Investors who they thought were less likely to conduct due diligence checks. In the same email chain referred to above, RL asked what the minimum amount of funding required for a certain venture of MC’s would be on the basis that ‘[l]arger loans attract larger investors who do their own due diligence with regards to property and client’.

The Claimant has so far identified £8,155,552.25 (crediting £440,000 of receipts) being paid out to MC and/or MC’s associates from the Claimant

In respect of all and/or each category of advances, MC and/or Defendants were aware that the advancing of the sums concerned was contrary to the Claimant’s proper procedures and involved the wrongful dissipation of funds and/or the creation of false and fraudulent documentation so as to conceal such wrongful dissipation from the Claimant.


Category 1 Advances
RL procured certain payments from the Claimant’s client account where the purported loan referred to in the Payment Request prepared by RL and/or instruction he gave did not exist and there was no documentary record in respect of the same

Accordingly, the any and/or each such Payment Requests was falsified so as to facilitate wrongful payment

RL procured the payment of monies from the Claimant’s client account to MC and/or his associates in the absence of (1) a Loan Entry; (2) any security; and (3) any loan agreement with the recipient.

At the time of finalising these amended particulars of claim, and based on the material currently available to the Claimant, the Claimant has identified £2,548,067.77 being wrongly dissipated by means of Category 1 Advances to MC and/or his associates.

Category 2 Advances
RL procured certain payments from the Claimant’s client account where the purported loan agreement to which the Payment Request prepared by RL referred did not exist but RL subsequently raised funds on the Claimant’s loan platform to cover the shortfall in the client account

After the sums were advanced, RL created or procured the creation of false Loan Entries on the Claimant’s platform in respect of which certain investors unwittingly authorised the use of sums previously input by them into the Claimant’s client account. The Loan Entries were false and fraudulent in that they were created ex post facto and the stated purpose and/or security and/or recipient were fabricated by RL.

At the time of finalising these amended particulars of claim, and based on the material currently available to the Claimant, the Claimant has identified £4,369,484.48 being wrongly dissipated by means of Category 2 Advances to MC and/or his associates.

Category 3 Advances
RL further procured certain payments from the Claimant’s client account in respect of loans to MC and/or his associates which were prima facie genuine and appeared as Loan Entries on the platform at the appropriate time, but remain unpaid.

RL further procured certain payments from the Claimant’s client account in respect of loans to MC and/or his associates which were prima facie genuine and appeared as Loan Entries on the platform at the appropriate time, but remain unpaid.

At the time of finalising this these amended particulars of claim, and based on the material currently available to the Claimant, the Claimant has identified £1,678,000 outstanding in respect of the Category 3 Advances made to MC and/or his Associates.