View more on these topics

High Court shuts down £20m property scam

Home-House-Property-Residential-UK-700x450.jpg

The High Court has shut down a property investment company for defrauding close to £20m of investors’ money.

Essex and London Properties was incorporated on 15 April 2005, with a registered office in Sidcup, Kent.

It claimed to purchase properties with the intention of selling them on at a profit or getting rental income for investors.

Potential investors were approached directly or via intermediary platforms, who received 35 per cent of the invested amounts and offered partnerships in a limited partnership scheme.

Investors were persuaded to invest by offers of an 8 per cent annual return paid quarterly if the money was held for three years or 12 per cent if the money was held for one year.

Over an 18-month period, more than 800 people invested in the company anywhere between £5,000 to over £100,000.

Essex Police, which has an ongoing investigation calculates to date £18.9m has been obtained from creditors and investors.

The reality was ELP only purchased a single property; a house in Harwich for £147,000 which is less than 1 per cent of the overall amount of money collected from investors.

But ELP gave information to investors claiming it had purchased numerous properties that had rapidly increased in value.

Furthermore ELP falsified Land Registry documents showing the company owned more property than it did.

Investors made payments through a number of escrow agencies.

Insolvency Service investigators examined the income and expenditure of statements made by one of these agencies and found existing investors received their interest payments.

Yet these payments were not from any meaningful return on their investment but from payments made by new investors.

As a result of the investigation by the Insolvency Service, the secretary of state for business energy and industrial strategy issued the petition to wind up the company, which claimed to have debts of over £11m.

On 27 September 2018, the High Court heard the petition against the company which was unopposed and ordered the company into liquidation.

In her ruling Judge Barber pointed out this was a case “crying out for a public interest winding up”.

Insolvency Service chief investigator David Hill says: “The company persuaded members of the public to part with substantial sums of money to invest in property. Only one property was purchased and the money raised from the public in reality was used to benefit those running the company.

“As so often is the case, if an investment scheme appears to be too good to be true, it probably is. There is an ongoing investigation into those individuals controlling Essex and London Properties by Essex Police, who are liaising with the Crown Prosecution Service with a view to prosecuting a number of suspects.”

Recommended

Home-House-Money-Property-700x450.jpg
4

FOS penalises adviser over Harlequin Sipp property investment

The Financial Ombudsman Service has told Kingswood Financial Advisors to compensate a client over a Sipp investment in an unregulated Harlequin property fund. The case concerns Mr B’s complaints about the advice he received regarding two unregulated investments: one into a Harlequin property fund and the other into Green Oil. The ombudsman’s ruling relates to […]

4

Scam claims managers ordered to wind down

Two fraudulent companies that claimed to be able to recover funds for people who had lost money in alternative investment schemes have been ordered into liquidation by the High Court. Asset Recovery Associates Limited was incorporated as a private company in July 2011. The linked company, Asset Recovery Resources Limited, was incorporated the following December. […]

Pension - thumbnail

Engaging millennials: Top five tips

By Jamie Clark, Business Development Manager Our latest research looks to understand the key influences on millennials’ future long-term pension savings. Here are our top five takeaways to consider when developing a strategy for advising them. 1. Every millennial is different. One thing that came through loud and clear in our research was that pigeon-holing […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. One wonders why there is a director who joined the company in Aug 2015 resigned from the company in Dec 2015 only to appear on a Scottish LLP with the same name in Sept 2015. am I missing something?
    No mention of the scam’s organizers being pursued by the law either, just the company being shut down by the court.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com