The FSA has secured a £32m High Court judgment against three land banks but says victims are unlikely to get their money back.
The High Court ruled that James Kenneth Maynard, Countrywide Land Holdings Limited (Countrywide) and Plateau Development & Land Limited (Plateau) operated a collective investment scheme without authorisation and sold plots of land unlawfully to UK consumers.
Regional Land and Countrywide were trading names used by Maynard.
His Honour Judge Pelling QC banned Maynard for life from selling land for business purposes in the UK and ordered him and Countrywide to pay £31,896,194 to the FSA, while Plateau, now in liquidation, was instructed to pay £918,975.
A bankruptcy order was also made against Maynard, who is now believed to be living in Northern Cyprus.
Another individual, Wasim Minhas, the director of Plateau, has been ordered to pay £75,000 to the regulator.
The FSA has not yet identified any assets that would enable more than a small proportion of these payments to be made and says it is unclear how much will ultimately be returned to investors. The FSA is continuing to make enquiries to trace the funds paid by investors.
FSA acting director of enforcement and financial crime Tracy McDermott says: “We have to be realistic about the low probability of securing meaningful compensation for victims of these scams, but this is still an important victory.
“Proving that a land bank is operating a collective investment scheme – and should therefore be FSA authorised – is very complicated, so every success puts us in a stronger position to tackle other schemes.
“This decision sends a message to other land banks that we will not sit by and let them con investors out of their money. Indeed we have also started court actions against others that we believe have been involved in Maynard’s scheme.
“Anybody investing in land should always have it independently valued to check its worth. Furthermore, if you are ever sold land as an investment with the promise of fabulous returns, and on the basis that someone else will manage it for you as part of a wider site, you should check the firm is authorised by us.”