Lee Jasper friend held over theft in City Hall cash probe

A friend and business associate of former mayoral aide Lee Jasper was arrested today in the Scotland Yard fraud probe into City Hall grants.

Joel O'Loughlin was being questioned by detectives today 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 Mr Jasper which received grants from the London Development Agency.

Mr 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.

Mr O'Loughlin has been described as a longstanding friend of Mr Jasper and the pair are said to have run a business together.

Scotland Yard said in a statement today that a 53-year-old man had been arrested under the Theft Act in connection with the "non return of overpaid monies". Mr Jasper resigned as the Mayor's race adviser after sexually charged emails were published in which he said he wanted to " honeyglaze" a married mother of three.

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 Mr 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.

Meanwhile, a charity connected to Mr Jasper has been shut down over fears it was being run improperly.

Ethnic Mutual has been closed for three months after failing to satisfy watchdog the Financial Services Authority that it was of real benefit to the community.

The organisation - which has received more than £1 million from the LDA and the Government - was already at the centre of a probe into the misuse of public funds after it emerged it diverted £18,000 to the African Caribbean Positive Image Foundation, which no longer exists and of which Mr Jasper was director.

The married father-of-nine said the loan had been arranged by Emerson Braithwaite, a fellow director, without his knowledge.

Mr Jasper quit his £120,000-a-year post as director for equalities and policing for the Greater London Authority two weeks ago in disgrace, after the disclosure of a series of embarrassing emails and mounting questions over the grants row.

These were uncovered by an Evening Standard investigation.

Four other City Hall projects with close links to Mr Jasper are also being investigated - the Brixton Base, Diversity International, the European Federation of Black Women Business Owners and the Deshbangla Foundation.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in