alleged £1bn HBOS corporate fraud was known to former directors of the state-rescued bank, but they failed to act on the information, according to sources close to police investigators.

alleged £1bn HBOS corporate fraud was known to former directors of the state-rescued bank, but they failed to act on the information, according to sources close to police investigators.
A dossier of evidence to support the claims  has been handed by the police to the Crown Prosecution Service (CPS), the Sunday Herald reports.
The dossier of 50 letters has also been sent to FSA chief executive Hector Sants, Treasury Select Committee chairman Andrew Tyrie, other members of the parliamentary committee, and to business secretary Vince Cable, according to police sources.

Addressees of the letters are thought to include HBOS directors who were allegedly alerted to the fraud fears by directors of “victimised” corporate customers during 2007 but failed to investigate the claims.
Lord Stevenson of Coddenham, the former chairman of HBOS, is thought to be among the names, as well as Andy Hornby, the bank's former chief executive, head of corporate lending Peter Cummings and non-executive directors including Charles Dunstone and Sir Ron Garrick.
The HSBOS probe has been called “one of the largest fraud investigations of its type in UK history” by police.
Between mid-2002 and late 2007, the main suspects in the case are alleged to have stolen and laundered about £1bn.
The money had been lent by HBOS’s Bank of Scotland Corporate division to 200 corporate customer accounts.
Physical assets worth scores of millions are also alleged to have been stolen. 
Lloyds TSB took over HBOS in a £12.2bn all-share deal in September 2008, three days after Lehman Brothers went bust.
The following month the government was forced to bail out the banking sector and pumped £11.5bn into HBOS, £5.5bn into Lloyds and £20bn into Royal Bank of Scotland.
An ongoing criminal investigation into the alleged fraud at HBOS, code-named Operation Hornet, has been underway since June