A friend and business associate of former mayoral aide Lee Jasper was arrested yesterday in the Scotland Yard fraud probe into City Hall grants. Joel O’Loughlin was being questioned by detectives yesterday at Belgravia police station in connection with allegations of theft.
His arrest is the third in the ongoing inquiry into a series of projects linked to Jasper which received grants from the London Development Agency (LDA).
O’Loughlin, 53, who ran one of the projects, Diversity International, was arrested in a police raid on an address in Dagenham.
Scotland Yard said detectives from the Met’s Specialist and Economic Crime Command had searched two addresses in the Dagenham area and two addresses in the Liverpool area.
Diversity International, based in Liverpool, was given a £295,000 LDA grant in 2005 to run a web-based tool for London business called the Diversity Dividend.
The website only operated briefly before the company collapsed and went into bankruptcy. The grant money allegedly disappeared. O’Loughlin has been described as a longstanding friend of Jasper and the pair are said to have run a business together.
Scotland Yard said in a statement yesterday that a 53-year-old man had been arrested under the Theft Act in connection with the "non return of overpaid monies".
Jasper resigned as the mayor’s race adviser after his sexually charged emails to a mother-of-three were published. He is accused of pushing for Diversity International to receive grant funding even though there were concerns about the organisation. This is denied by City Hall.
Last week two other associates of Jasper were arrested in connection with money laundering. The two men ran the Green Badge Taxi School, a project in Clapham which was set up purporting to offer courses in the "knowledge" for would-be taxi drivers from ethnic minorities.
It was funded by the LDA but records showed that, after receiving grants of more than £300,000, it never trained more than a handful of students.
The four other organisations being investigated by the police are Brixton Base, Ethnic Mutual, The European Federation of Black Women Business Owners and the Deshbangla Foundation. Police insiders say the inquiry is expected to take months. – London Evening Standard