The fraud surrounded the financing of H2O Networks, a pioneer in fibre-optic infrastructure that collapsed into administration six years ago.
Executives linked to the project were found guilty at Southwark Crown Court of making false representations to lenders Barclays and the UK arm of the Belgian bank KBC reports the Telegraph.
They included Simon Mundy, an “inside man” at KBC who received £900,000 in bribes to approve loans to Total Asset Finance (TAF), a vehicle that in turn funded H2O Networks.
Stephen Dartnell and George Alexander of TAF were found guilty of fraud, along with Carl Cumiskey, H2O Networks’ former finance director.
The broadband company’s former managing director, Elfred Thomas, and Kerry Lloyd, the former company secretary at TAF, were acquitted.
An investigation by the Serious Fraud Office (SFO) found that H2O Networks’ business centred on signing long-term broadband deals with councils and universities. The contracts were sold onto TAF, which used them to obtain cash from Barclays and KBC.
However, the value of the contracts was inflated and some were entirely concocted by the fraudsters, the court heard. Prosecutors told the jury that there was no dispute that fraud on a massive scale had occurred between 2007 and 2010, but each of the defendants denied involvement and, in the main, blamed each other.
David Green, the director of the SFO, said: “This was a carefully planned, complex and lucrative fraud which ran over three years.
“It took a determined investigation to ensure that those responsible for it were brought to justice. We will now turn our attention to securing confiscation of criminal assets from those convicted”.
H2O Networks aimed to lower the cost of building new internet infrastructure by installing cables in sewers and began work in Bournemouth and Dundee.
The fibre-optic networks it did manage to install prior to its collapse were bought out of administration and formed the foundation of CityFibre, a listed broadband infrastructure provider that is not linked to any wrongdoing.