The Serious Fraud Office has laid more than 100 charges against four former directors of failed lender Five Star Finance, carrying a maximum penalty of seven years apiece.

The charges relate to loans worth some $50 million, a large proportion of which the SFO says is irrecoverable, and concern related party lending between 2003 and 2007. The white collar crime investigator alleges the defendants intentionally applied funds in breach of the company's obligation under its trust deed, and dishonestly used documents to obtain a benefit.

"For investors to have confidence in the financial markets they need to know there will be quick and effective intervention by a law enforcement agency with the powers and resources to deal with serious and complex fraud," said director Adam Feeley in a statement.

"Investigations of the scale and complexity of Five Star Finance require detailed forensic accounting analysis which inevitably takes time."

Five Star Finance and Five Star Consumer Finance called in the receivers in 2007 owing some $77 million to secured debenture holders. The SFO estimates the losses to investors and creditors of the Five Star Group to exceed $85 million.

The four accused, Nicholas Kirk, Marcus MacDonald, Anthony Bowden and Neill Williams, already face charges from the Companies Office over alleged breaches of securities law, while Five Star Consumer Finance's receiver has lodged a civil suit against the board for failing its duty to the company.