Buy To Let Scams And The Property Boom Fraudsters

The Serious Fraud Office recently confirmed that, with the collapse of the mortgage lending and property markets, buy-to-let scams have emerged to take advantage of the crisis.

UK detectives are looking at cases which involve millions of pounds in alleged property fraud, and are investigating many cases involving thousands of property investors worldwide. Closer to home, there have been a number of high profile off plan, buy-to-let frauds involving hundreds of properties in the cities of London, Liverpool, Cardiff, Nottingham, Derby, Manchester, Leeds and Hull. 

Recently, five directors of the north east based company PPP ltd (Practical Property Portfolios) and its sister company Napeer Holdings Ltd pled guilty in court to fraudulent trading charges.

Newcastle Crown Court heard that the companies lost £65 million of investor’s money and were wound up as a result of these losses. PPP sold 4000 residential properties for £80 million. Investors had paid fees of £25,000 for their investment properties, with a “rental guarantee”.

Also,  police were investigating an alleged £2 million multinational property fraud involving a York based company, Chancellor Property Developments Ltd., after they arrested and bailed four people on suspicion of conspiracy of money laundering and fraud.

Yet another company in the Midlands, Ocean View Properties, was suspected by Liberal Democrat MP, Norman Baker, of involvement in another property scam. The company’s accounts were shown to hold debts of more than £100 million, and property investors based in the UK are believed to have lost millions of pounds through their dealings with them. Investors were buying £70,000 off plan apartments in Spain and the Dominican Republic through Ocean View Properties.

In the Republic of Ireland the assets of Breifne O’Brien, totaling some £32 million, were seized, including exclusive properties in Dubai, Dublin, Paris and the Caribbean. Mr. O’Brien had been accused of operating a pyramid scheme aimed at property investors. Mr. O’Brien had to answer accusations leveled against him in the Irish Commercial Court.

Over 15 years Mr. O’Brien had allegedly channeled money from property investors to fund his luxury lifestyle and business interests. In 2008 the Association of Chief Police Officers reported that some £700 million pounds had been defrauded from mortgage lenders in order to launder money from prostitution and the drugs trade. Most of these frauds were designed to overvalue newly built apartments, purchased with false documentation. 

Thanks to such scams, it is now harder than ever to gain mortgages for buy-to-let properties and new build apartments

As property guru Martin Brennan said in interview recently, "...most of these outfits go one of two ways;

1. They disappear after a year or so of taking peoples money.
2. They appear on BBC Watchdog ...and then come under item 1. above.

Anybody in the property game knows very well that the best property buys are completed discreetly and quietly."

British crook to face land scam charges

Gary Robb in front of the Kyrenia development

A BRITISH criminal currently serving a prison sentence for drug dealing in the UK will soon be extradited to Cyprus to face accusations of developing and trading in Greek Cypriot properties in the north, the British Crown Prosecution Service (CPS) confirmed yesterday.

It will be the first time the Cyprus government has brought a case in Cyprus against an individual for the illegal development of Greek Cypriot property in the north.

Forty-eight-year-old Garry Robb, who escaped to northern Cyprus after being released on bail for drug dealing in the UK in 1996, will be re-arrested and deported to Cyprus on July 13 - immediately after he is released from jail in Britain, the CPS told the Cyprus Mail. After 13 years of hiding out in the north, Robb was sentenced to five years when recaptured in January 2009, but will be released on parole next month.

Before his recapture by British police in 2009, Robb established AGA Developments, a property development company that allegedly lured hundreds of unsuspecting Britons into investing in villas and apartments built on Greek Cypriot-owned land in the north. British police believe around 400 Britons collectively lost in the region of 35 million UK pounds in deals with Robb’s AGA Developments. AGA’s notorious Amaranta Valley project located close to the north coastal village of Klepini still consists of 500 rapidly decaying half-built properties.

According to information provided by the CPS yesterday, the European Arrest Warrant (EAW) charges Robb with nine offences and states that “between 2004 and 2005, the defendant conspired with others (named as Tuncel Tahir Soycan and Akan Kursat Talat) to develop land which did not belong to them, and to sell villas built without permission upon that land by means of false representations to the prospective purchasers”.

All cases against Robb refer to properties he sought to develop in the Kyrenia district and “concern the fraudulent sale or offering for sale of villas on the illegally-developed plots of land”.

Two other charges cited in the EAW accuse Robb and his compatriots of conspiracy to commit a felony and conspiracy to commit a misdemeanour. All the alleged offences are believed to have occurred between April 2004 and April 2005.

If Robb does appear in a Cyprus court, Greek Cypriot judges will not however be focusing on the losses of unsuspecting Britons, but on the losses of the Greek Cypriot landowners whose properties he dealt in.

As Greek Cypriot lawyer Constantis Candouna told the Cyprus Mail yesterday, “It is the Greek Cypriot refugees who are the victims. For the Brits, it was as if they were buying stuff off the back of a lorry”. He advised Britons who had been cheated by Robb to apply to courts in the UK or the north.

European arrest warrants for Robb and his two AGA associates Tahir Soycan and Akan Kursat were first issued in 2005 by a Nicosia court amid allegations the three were trading in illegally acquired Greek Cypriot properties in the north. Turkish Cypriot police however did not act on the warrants because the territory remains outside EU jurisdiction, and because its authority did not view Robb’s selling of Greek Cypriot property a crime. Britain, it seems, has waited for Robb to serve his sentence for drug dealing before deciding to enact the EAW.

Chris Douglas - Challenor Property - CLICK HERE

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Shaun Kiely Property Investment - CLICK HERE

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Jim Moore - Inside Track - CLICK HERE

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Chek Whyte - Secret Millionaire - CLICK HERE

Chek Whyte (Anthony Beardsley)

Buying Off Plan Property: Who Really Makes the Money?

One of the most popular ways to buy property is buying off plan.

But what the heck is "off plan", and what’s all the hype about?

Off plan means buying a property that doesn't exist. In other words, you're relying on a development company to build your property.

The big 'HYPE' is that if you decide to invest in the right development project, then you, as the investor, can make some serious money.

Let’s have a look how a typical off plan investment works.

You’ve been reading the ads in the Sunday newspapers again, haven’t you?

You’ve seen an advert for a fabulous new development that’s being planned. At the moment, however, there is nothing there yet. It is merely a developer’s idea, presented with some fancy pictures and inflated financial returns to get your juices flowing.

You’re invited to invest in this scheme. If you invest early, the developer will give you a 15% -40% discount. You only need to sign the contract and hand over the first 10% as a deposit. After that, you’ll make regular periodic payments in accordance with your contract until the development is completed.

You can sell your contract during construction, or sell the property after completion to make a nice juicy profit.

Okay, let’s stop here!

First, let’s take a look at the idea from the developer’s perspective, and then we’ll look at it from the investors’ perspective.

The developer has an idea. He’s seen a plot of land or some dodgy rundown building where he wants to build make some serious money. But he has a problem. He has no money to start the project. He can go to the bank to borrow the funds, but the Bank won’t lend him the money unless he can provide security.

The developer plans to develop the project  at a cost of £20 million pounds, but he doesn’t have the money. He only has enough funds for drawing up the plans and printing the advertising brochures....oh and of course a fancy website.

The land costs £2million. He needs another £2 million for putting in the infrastructure and £10 million to build the actual development. The Bank advises him that if he owns the land, it will lend him the £2 million. Once he puts in the infrastructure, the project can be started. He’s in a fix.

How is he going to raise the £2 million for the land?

This is what he does…

He markets the off plan for his development via thousands of on-line real estate agents from around the world. Early-bird investors jump in with their 10% deposits. The developer then uses the investors’ deposits to pay for the land/building. He then goes to the Bank to borrow the other £2 million for putting in the infrastructure. The Bank lends the £2 million and puts a first charge over the land.

At this stage, administrative staff from the developer’s office is collecting the next round of payments from the investors, usually around 30% of the total. Now the developer will have the funds needed to start construction and pay the builders. If all goes well, the project has been started, without taking any money from the developer’s bank account.

This, in short, is how the buying off plan development process works from the developer’s perspective.

Now let’s have a look at the same off plan process from the investor’s perspective.

You, as an investor, can secure a unit at a 15+% discount if you purchase it quickly. You don’t want to miss this opportunity, so you decide to fork out the 10% deposit and pay the developer. The sales team has promised you that you can sell your contract at any time during the construction phase to make a nice, hefty profit.

Let’s look at an example.

Flats are retailing for £87,500. You’ve secured a 30% discount on this price, so you’ll pay £61,250. You need to secure this unit by putting a 10% down payment of £6125.

A year later, the price increases by 10%. The flats that were valued at £87,500 are now worth £96,250. If you sell your contract at this new price, you’ve made £35,000.

You could hold on for another year, or sell before the construction is completed.

The remainder would probably be covered by a 70% mortgage. If prices rise by another 10%, you could probably sell your share for even greater reward.

You’ve more than doubled your money! 

Okay, now let me tell you the bad news that no one else mentions!

• You need to sell your flat  within a tight time frame. Actually, you need to sell it before the next payments are due. In order to do this, you need plenty of buyers and a liquid market.

TELL ME SOMETHING.... why the heck would someone buy your resale property when he or she could go directly to the developer and get a discount? The only way the developer will help you sell your property is if the development is already sold out. However, the problem is that the developer has just started a new development down the road, where he is selling off plans to more new investors at a discount. Guess which property will attract your potential buyers?

• If the project goes down the pan, how will you get your money back? You can’t get a refund for your deposit, because the money went to pay for the land that is now mortgaged by the bank.

The bank will get its money back, as it secured a first charge over the land, but unfortunately it was your money that went toward the purchase of the land.

• Prices must be rising quickly for this scheme to work, because if they are rising slowly or are static then you’ve made nothing.
• You are dependent on the initial valuation being correct. If the property is overvalued by even 10%, you will lose money.

Buying off plan is fine if you love the development plan and intend to use it for your own retirement. But I guarantee that if you look in local newspapers in any country around the world, you’ll find lots of desperate buyers trying to sell their own off plans at a third of their sale price on the resale market.

Buying off plan is ideal for the developer. But they’re not the way for investors to make money. It’s the developer who makes the money with off plans.

...and this does not take account of the fact that in many cases the development is never even completed, the company disappears with your money and any guarantees you have been given are completely worthless!!

Real estate becomes worst affected sector for insolvency

Official stats uncover chaos in property industry
fficial statistics uncover chaos in property industry
Real estate has become the worst-affected sector for insolvency after making up 35% of total administrations in the second quarter of 2011, according to Insolvency Service figures.

The sector accounted for 243 of the 695 administrations recorded during the quarter and also experienced a 25% quarterly rise in company voluntary arrangements (CVAs) compared to the first quarter of this year.

Despite the quarterly rise, real estate administrations were still down from a peak of 50% of total administrations recorded in the final quarter of last year, while administrations across all sectors fell 11% from the 782 recorded in the first quarter of 2011.

David Costley-Wood, restructuring partner at KPMG, said: “Real estate is the only sector to have seen a significant increase in administration appointments, and now makes up the highest proportion of administrations, highlighting the fundamental issues within the property industry.

“Inappropriate business models could, in our view, take as long as a decade to resolve but - at the very least - the severity of distress has eased off.”

The Insolvency Service also revealed that corporate insolvencies increased by just over 1% during the second quarter 5,465, compared to the previous three months, as the economy stuttered.
The number of compulsory and creditors’ voluntary liquidations reached 4,233 in the second quarter, which represented a 2.7% increase on the previous quarter and a 4.4% rise on the same period last year.

This total comprised 1,290 compulsory liquidations, up 19.8% on the previous quarter, and 2,943 creditors’ voluntary liquidations, which fell by 3.3% during the same period.
PricewaterhouseCoopers (PwC) said that its analysis of the statistics do not reflect the entire picture of UK plc.

David Chubb, partner in business recovery services at PwC, said: “It seems that there may be a lot of businesses closing down without the need for an insolvency process because they are making the conscious decision to cease trading before the business reaches the point of no return.”

Inside Track - Jim Moore

Another great site for victims of Inside track & Jim Moore


http://iap-members-forum.maxforum.org/

Challenor Property Scam - Peter Carbert and Chris Douglas

To prevent the people who ran Challenor Property from scamming anyone else. If you've had dealings with Challenor Property, were scammed by them and feel you might not get your money back, this is the place for you. It's the spot to leave a warning message about Peter Cabert and Chris Douglas who Challenor Property, a company that lied to and scammed people out of thousands of pounds. Hopefully we can prevent others from becoming involved with anyone who ran that company - go to this website now:


http://challenorproperty.wordpress.com/

Landlord and property investment associates jailed over mortgage racket

A property investor who built up his portfolio by making fraudulent mortgage applications has been jailed.
His independent mortgage adviser and another man have also been given prison sentences for their roles in the multi-million pound mortgage racket.
Property investor Michael Browne built up a portfolio through filing a string of fraudulent mortgage applications, with the help of mortgage adviser Mark Campbell.
Browne, aged 49, used money obtained through the frauds to buy a six-bedroom villa in Spain, which was raided by West Midlands and Spanish police.  He is said to have built up huge wealth through the fraud, which he ran for many years.
He was arrested in November 2008 and a lengthy investigation followed. It was discovered that he had used Campbell to file mortgage applications that vastly overstated his income.
Campbell was convicted after Birmingham Crown Court heard that he falsified incomes and produced false letters of employment and references.
He obtained mortgages for Browne and his family and associates, with a ‘no questions asked’ attitude.
Campbell was sentenced to five and a half years in prison. Browne was given a three-year jail term. Police are now seeking to seize his assets under the Proceeds of Crime Act.
David Smith, Browne’s business partner in a property development company, was convicted earlier this year and sentenced to three and a half years in prison.
He had also used Campbell to obtain loans using false references and inflated incomes.
Detective Inspector Chris Barrow said: “Browne pleaded guilty at an early stage when he saw the overwhelming evidence against him.
“Campbell and Smith, however, denied the fraud to the end, even though there was overwhelming documentary evidence that showed they lied to banks and lending institutions time and time again.
“Campbell abused his position and used his knowledge and skills to obtain a mortgage for anyone who wanted one, no matter whether they were employed or not. “He even acquired property for family members using false applications to ensure they benefited too.
“These men profited from fraud when people around them are working hard to get their foot on the property ladder.
“We will now endeavour to ensure any money gathered in the course of their crimes is recovered so that their efforts are in vain.”
A fourth man, Andrew Harris, was used by Browne to produce false pay slips. He pleaded guilty last year but has yet to be sentenced.

Northwest Property sector bears brunt of insolvencies

PROPERTY companies and SMEs are facing "intense" pressure on their finances given HMRC's decision to get tough with "zombie" companies who cannot afford to pay outstanding tax bills, according to insolvency trade body R3.

R3 said that second quarter insolvency figures show that although the number of administrations dropped by 10% to 695, the number of receiverships rose by almost 16 per cent to 350.

Jeremy Oddie, North West regional chair of R3 and head of recoveries at Mitchell Charlesworth, said: “Receivership is a process now almost exclusively used in cases involving property businesses. The vast majority of these will be companies or individuals with a property portfolio who have defaulted on their mortgage repayments.

“The figures reflect the intense pressure on landlords, particularly those with retail properties. Many of them will have borrowed money some time ago when interest rates were higher. Not only are they paying over the odds, they are also facing the loss of rental income as tenant companies collapse or properties are left standing empty.”

The figures also reveal that compulsory liquidations rose by almost 20 per cent in the second quarter to 1,290.

Oddie added: “It is likely that HMRC is responsible for most of these liquidations. These are businesses which don’t even have the money to wind themselves up.

Some of them will no doubt have already delayed tax under the Time to Pay scheme. It would confirm our own experience, that HMRC is getting fed up with non-payers and is engaged in a clear-out of ‘zombie companies’.”
 Lindsey Cooper, a Manchester-based restructuring partner at Baker Tilly, also argued that national figures showing a drop-off in failures of hotels and construction businesses at a national level was"not reflective of what is happening at a regional level.

She said: “Our experience is a strong contrast to the trend highlighted by the Office of National Statistics.

“Throughout the last quarter we have seen an increase in businesses within this sector now in difficulty. This is particularly prevalent amongst the independent and smaller chains of hotels which have properties in locations that don’t attract natural footfall from either tourists or business travellers.”

Similarly, she added that Baker Tilly's restructuring practice was seeing an increased demand for its services from construction firms.

“Unfortunately, for too long the construction companies we are now speaking to have been buying in their work by taking on projects that provide too low a margin. 

"As a result, the smaller businesses in the sector are now paying the price for the contracts they have taken on.”

Lies and forgeries - why Property Legal Services and linked firms were shut down

Five "unscrupulous" connected companies involved in dubious property investment schemes in the UK and in Spain have been put into liquidation in the High Court.

Company Investigations of the Insolvency Service uncovered a string of lies, forged signatures and missing paperwork at Property Legal Services (London) Limited, Property Legal Services (2007) Limited, Overseas Legal Services Ltd, Enjoy Property Ltd and United Holdings & Investment Limited.

They were linked in the operation of three distinct businesses: a "fractional investment scheme" in which victims became minority owners of properties; a scheme involving the transfer of off-plan properties in Spain and most recently a scheme involving the same-day transfer of property in the UK.

All of the companies were associated with 51-year-old Clive Ballard of north London and in the case of PLS (London) Limited and PLS (2007) Limited, struck-off solicitor Michael Alexander, aka Michael Mendoza, aged 60.

High Court orders unscrupulous property investment companies into liquidation

Five connected companies involved in dubious property investment schemes, operated both here and in Spain, have this week been ordered into liquidation in the High Court following a Government investigation.

The investigation by Company Investigations (“CI”) of the Insolvency Service found that Property Legal Services (London) Limited, Property Legal Services (2007) Limited, Overseas Legal Services Ltd, Enjoy Property Ltd and United Holdings & Investment Limited were all linked in the operation of three distinct business activities: a fractional investment scheme, a scheme involving the transfer of off-plan properties in Spain and more recently a scheme involving the same day transfer of property in the UK (see notes 8 to 10 below).

All of the companies were associated with a Mr Clive Ballard and in the case of PLS (London) Limited and PLS (2007) Limited a Mr Michael Alexandra (also known as Michael Mendoza).

The investigation has identified 25 victims of the scheme who together have lost in excess of £288,000.

Commenting on the case Company Investigations Supervisor Chris Mayhew said:

“We have strong enforcement powers and will not hesitate to use them as here where the companies were found to have operated complicated and dubious property schemes in a thoroughly unscrupulous way destroying the property investment dreams of those people unfortunate enough to have invested. More recently significant residential property transactions were entered into where material facts which could have influenced the mortgage lender’s willingness to lend were not disclosed to the lenders”.

______________________________________________________________

Note

1. Property Legal Services (London) Limited was incorporated on 27 February 2004. The registered office of the company was at 1 Meadow View, Marlow Bottom, Buckinghamshire, SL7 3PA. The recorded directors of the company were Mr Clive Leonard Ballard (from 27 February 2004 to 1 January 2007) and Mr Michael Alexander (from 31 December 2006). The secretary of the company was Business Innovations 2000 Limited (from 27 February 2004).
2. Property Legal Services (2007) Limited was incorporated on 12 January 2007. The registered office of the company was at 1 Meadow View, Marlow Bottom, Marlow, Buckinghamshire, SL7 3PA. The sole recorded director of the company throughout was Mr Michael Alexander. The secretary of the company was Mr Clive Ballard (from 12 January 2007 to 2 April 2007).
3. Overseas Legal Services Ltd was incorporated on 14 February 2007. The registered office of the company was at 27 Old Gloucester Street, London, WC1N 3XX. The sole recorded director of the company throughout was Mr Clive Ballard. The secretary of the company throughout was Business Innovations 2000 Limited.
4. Enjoy Property Ltd was incorporated on 21 November 2006. The registered office of the company was at 130 Woodhouse Road, Finchley, London, N12 ORP. The sole recorded director of the company throughout was Mr Clive Ballard. The secretary of the company throughout was Business Innovations 2000 Limited.
5. United Holdings & Investments Limited was incorporated on 23 January 2002. The registered office of the company was at 1 Meadow View, Marlow Bottom, Buckinghamshire, SL7 3PA. The sole director of the company throughout was Mr Clive Ballard. The secretary of the company throughout was Business Innovations 2000 Limited.

6. The petitions to wind up the companies in the public interest were presented on 3 November 2010 under the provisions of section 124A of the Insolvency Act 1986. The grounds for winding up the companies were their involvement in schemes which were conducted with a serious lack of commercial probity; failure to maintain proper accounting records or file accounts; and failure to co-operate with the investigation. The action taken was unopposed, the companies having been dissolved.

7. On 16 March 2011 the Court ordered the restoration of the companies to the Register of Companies and that they be wound up on grounds of public interest by virtue of which the Official Receiver is now the liquidator of the companies.

8. The fractional investment scheme involved members of the public being offered property investments in the UK and Spain. The scheme was carried on by PLS (London) Limited and PLS (2007) Limited. Potential investors were offered

(a) the opportunity to purchase a minority share in a rented property within a portfolio; a share in the future growth of the property and a 9 per cent annual return on investment.

(b) that investors’ money would be safeguarded by being held in a solicitor’s client account until security was in place; that cautions would be registered against titles to the properties and that shares would be allotted to investors in the management companies of the relevant properties.

It appears that no cautions were registered against the properties; that monies were paid into a solicitor’s client account and then paid out to PLS (London) Limited or directly to the company before any “security” had been put into place. At least two of the properties within the scheme were sold and at Mr Ballard’s direction the proceeds were paid into the account of Overseas Legal Services Ltd and largely dissipated for his benefit. The investment scheme failed in 2007. The investigation has identified 25 victims of the scheme who together have lost in excess of £288,000.

9. The off plan properties scheme involved people who had paid deposits to purchase “off-plan” property in Spain being induced to sell the same to Mr Ballard or companies in his “Profit by Property” group. Under the scheme:

(a) people who had paid a deposit agreed to transfer the property for a specified sum to Mr Ballard’s company which agreed to provide the balance of funds needed to make the property available for rental. There were further provisions for the respective share the parties would have in the equity of the property and the payment of interest to the transferor.

(b) an “additional level of security” to safeguard the transferor was to be provided by having equivalent property equity held in the UK.

It appears that no such security was actually put in place. Insofar as the investigation has been able to establish transferors have suffered losses in the region of 750,000 Euros.

10. The same day property transactions involved PLS (London) Limited and PLS (2007) Limited purchasing properties in the UK and selling them on at apparently inflated values on the same day. The features of the 26 transactions identified by the investigation are:

(a) the sale of the property would be financed by a mortgage in excess of the amount paid for the property by the companies.

(b) Mr Alexander (a former solicitor) appears to have been responsible for the conveyance work.

(c) the gross profits arising from the 26 transactions (being the difference between the purchase and sale price) amounted to £859,600. The net profits, after deduction of incentives, were £408,745.

(d) forgery of signatures.

It appears to the investigation that there may be a further 150-200 similar property transactions involving related parties.

11. In ordering the companies into liquidation Registrar Derrett said she was:

“satisfied on the uncontested evidence that substantial monies were received from members of the public and that adequate protections were not put in place despite the representations made otherwise. The link between the companies is Mr Ballard and his wife Clare Harrington also known as Clare Lewin. The documents relating to the fractional investment scheme and the same day property transactions involved solicitors and accountants in particular, a solicitor Beatrice Lebow and an accountant Iris Korobuk and there is evidence that the signatures of both of these ladies have been forged in various documents. There is evidence of 90 instances of forgery. Mr Alexander has informed the investigation that he forged signatures on 50 documents and that Mr Ballard drafted the letters of that nature. Also that 32 letters on which Ms Lebow’s signature appears were forged by Mr Ballard or his wife Ms Lewin. The evidence involving the same day transactions also demonstrates other individuals were involved in the scheme including a property dealer called Mr Frank Kantor and that incentive payments were made. I am satisfied the evidence demonstrates the considerable lack of co-operation with the investigation in particular from Mr Ballard. Some documents have been provided by Mr Alexander but essentially there has been limited co-operation by him with the investigation. On the basis of the evidence it has in my judgment been demonstrated that certainly three of the companies operated without any commercial probity and adopted unscrupulous business practices which led to the public suffering significant losses. One can’t determine the whole extent of the losses due to the lack of co-operation and lack of records and it is not clear what role two companies had in this but they are linked and in my view It is entirely appropriate for all of the companies to be placed into liquidation on grounds of public interest.

Is this failed buy-to-let 'guru' Jim Moore back in business?

Property ‘get-rich-quick’ schemes – where potential landlords are encouraged to buy flats and ‘put no money down’ – are back, with at least two companies encouraging investors to enter into risky and potentially illegal transactions. 

Intriguingly, some of the correspondence is signed ‘James Moore’ and comes from the personal email address of Jim Moore, who founded the notorious get-rich-quick property firm Inside Track. 

Moore insists these new schemes have nothing to do with him and says his email account has been ‘hacked’. 

Wealth hazard: Jim Moore, who founded the notorious get-rich-quick property firm Inside Track

Inside Track collapsed in 2008, but at its height claimed to have ‘educated’ 25,000 investors and sold £3 billion of property. 

In 2007, Moore’s stake was estimated at £100million. He now claims he is broke and is being sued by former clients, thousands of whom claim they lost money following his advice. 

The companies targeting investors today make promises similar to those made by Inside Track at the peak of the buy-to-let mania in 2005 and 2006.

 

‘Forget nine-to-five day jobs for ever,’ they claim. ‘Work four to six hours per week, not 46.’ Promotions from both companies – one is called Invest4less, the other is Elite Property Success – play heavily on the idea of investors buying properties with 100 per cent mortgages or ‘no money down’. 

This was an Inside Track hallmark. Experts say in today’s market a ‘no money down’ deal will probably involve mortgage fraud. Even in 2005 and 2006 when ‘no money down’ property investing was commonplace, it was questionable. 

A developer would market a flat for £200,000, say, but sell it to an investor for £150,000. The lender, however, would be aware only of the higher price. Given that lenders would typically advance a maximum of 75 per cent of the developer’s price, this would work out at £150,000, leading to a ‘no money down’ transaction. 

The ruse was facilitated by unscrupulous mortgage brokers, surveyors and conveyancers and succeeded thanks to reckless lenders such as Bradford & Bingley, where procedures were lax. 

B&B folded in 2008. Earlier this month, Invest4less, which claims as its address a nonexistent street supposedly in London’s upmarket Belgravia, invited potential investors to a seminar on July 19 and 20 at the Sofitel hotel near Heathrow’s Terminal 5. ‘Come, meet us and learn how in today’s market you can build wealth faster,’ it urged.

‘Make your life a holiday!’ It also proclaimed: ‘100 per cent mortgages are Alive & Well! No cash deposits are Alive & Well!’ 

The emailing was undertaken by marketing firm Infusionsoft. When Financial Mail applied for a seminar place, a ticket and invitation was sent by another firm, Eventbrite. 

But days before the seminar was due to take place, Invest4less cancelled, emailing: ‘We have to postpone as our main presenter is stuck out of the UK ill.’ 

Surprisingly, a follow-up email said: ‘Do you have any questions I can answer?’ 

False promises: An email from Invest4less inviting investors to a seminar

It was signed by ‘James Moore’ and, as Financial Mail has since learnt, came from Moore’s personal email address. Moore now claims he is the latest victim of malicious interception or ‘hacking’. 

His lawyer, Birmingham based Neil Davies, says: ‘My client is horrified to see that his name and email address have apparently been misused. 

He is taking up his concerns with the appropriate authorities. He denies any interest in or involvement in Invest4less. 

Mr Moore lives overseas and has no business interests in Britain.’ The marketing tactics employed by Elite Property Success, whose address is unknown, are similar to those used by Invest4less. 

Two weeks ago it emailed potential investors, inviting them to buy flats in Edinburgh at ‘distressed’ prices. It said: ‘The gross price is £160,000 and we have negotiated to purchase from the distressed vendor for just £120,000. 

This means that the 25 per cent discount will cover any deposit usually payable.’ Elite then cites a mortgage it claims is available from BM Solutions, part of Lloyds bank. BM says it refuses all applications on distressed sales. 

It says: ‘Our maximum loan-to-value is 75 per cent of the valuation or purchase price, whichever is lower. The scheme as described would not be accepted.’ 

The Council of Mortgage Lenders says no bank will knowingly lend 100 per cent of the price of a property to a landlord. Melanie Bien of mortgage broker Private Finance in London says: ‘Anyone misleading their lender about the price they pay for a property is breaking the law.’ 

The only Invest4less registered at Companies House was based in Pinner, north-west London, and was dissolved in 2008. 

No companies are registered under the name Elite Property Success.

Financial Mail’s emails to Elite went unanswered.

Riches in rents: But not room for novice landlords

Low returns on cash, a surge in tenant numbers and a resulting rise in rents have all helped drive a recent resurgence in buy-to-let. 

The Association of Residential Letting Agents says more than half of its members reported higher rents in the first half of this year while three-quarters said property supply could not meet tenant demand. 

In London, reputable agents say investors can achieve annual yields – rental income compared to property price – of eight per cent.

But unlike the boom years of 2005-2007 when thousands of novice, ‘armchair’ investors were doing the buying, today’s landlords are usually experienced, long-term purchasers. 

The Bank of England’s July 2011 ‘Trends’ report said ‘demand for landlord lending has been rising since the second quarter of 2010’. 

It also said the availability of landlord mortgages was increased, with about 600 deals now available, ‘the highest number since September 2008’.

Liverpool ‘property tycoon’ Ken Metcalf jailed for £4.4m investments scam

A FRAUDSTER who lived a millionaire lifestyle by ripping off dozens of property investors has been jailed.

For more than two years, Ken Metcalf, 53, ran a string of companies under the Tailormade banner, which he claimed would give a 50% return on profits by building and selling various construction projects.

But a court heard it was all a lie designed to support an “exuberant lifestyle” and shore up failing businesses.

The Recorder of Liverpool, Judge Henry Globe, QC, told Liverpool Crown Court that Metcalf, of Cornerhouse Country Cottages, Wrexham, impressed investors and staff alike by showing off expensive cars, watches, a yacht on Lake Annecy and a £1m mansion in Poulton, Cheshire.

He said: “You started to give advice on investment opportunities in 2005. You became confident in your own abilities.

“Through your lifestyle and personal guarantee, you gave the appearance of great wealth.

“When you started to lose significant sums, you gave increasingly unrealistic promises, hoping you would strike it lucky.

“When things started to go wrong, you started to rob Peter to pay Paul, instead of stopping trading.”

Judge Globe said of the £4.4m raised for building projects in the Bahamas, Cyprus, Turkey, southern France, Cumbria, Scotland and several in Liverpool, £3.3m was never returned to investors and £500,000 was used personally by Metcalf and his wife, including £240,000 on a mortgage deposit.

Metcalf’s 56 investors were mostly family people hoping for a return on their life savings, not knowing half of his “opportunities” did not even exist.

Judge Globe read a series of victim statements telling of financial ruin and families split apart in the wake of Metcalf’s scams.

He said: “They demonstrate all too clearly that offences such as fraudulent trading are not victimless crimes.

“Far from it, they have the potential to destroy lives.”

Metcalf, who ran his businesses from an address in Union Street, Liverpool city centre, pleaded guilty to two charges of fraudulent trading at an earlier hearing and yesterday was jailed for four years and eight months for his deceptions.

Metcalf, who the court heard was now suicidal, stood impassively as the sentence was passed.

His wife, Nicola Metcalf-Chakravaty, 41, of Maddocks Close, Farndon, near Chester, pleaded guilty to fraud after lying to obtain their £750,000 mortgage.

Judge Globe accepted she was as misled by her husband’s lies as his investors, but said she had still acted dishonestly.

He said she had earned a jail sentence but acknowledged her marriage had “ended in disaster” and instead ordered her to undertake 250 hours’ unpaid work in the community.

She has since left Metcalf, the father of her two children.

Both denied charges of money laundering and were found not guilty after no evidence was offered.

Outside court, DC Paul Forshaw, from Merseyside Police’s Economic Crime Team, said: “We are pleased that a two-year investigation into the lies, deceit and ultimately the fraud committed by Ken Metcalf against more than 50 investors and employees has resulted in this custodial sentence, and the conviction also of his wife, Nicola Metcalf-Chakravarty.

“Metcalf’s reckless actions have changed people’s lives forever and have resulted in the loss of more than £3.3m of other people’s hard-earned money.

“Investors have had their financial security stolen and their entire futures jeopardised as a result of Metcalf’s fraudulent activities.

“We hope in knowing Metcalf will today start a custodial sentence, his victims will find some solace and closure and can get on with rebuilding their finances and their lives.

“My thanks go to all the victims and witnesses who helped the police and Crown Prosecution Service in putting him before the courts so that justice could be done.”

Property dealer Shaun Kiely jailed for defrauding investors

Property dealer Shaun Kiely jailed for defrauding investors

Property dealer Shaun Kiely has been jailed for three years and disqualified from being a director for seven years for defrauding seven investors in deals exceeding £1.3m.

Kiely was the director and shareholder of Sky Properties (Northern), a property and real estate business, and of S-Mart Stores, a chain of small retail outlets across the UK.

Before and during 2005, SPN purchased over 50 commercial retail properties across the country and created 20-year leases to S-Mart for the properties before selling on the freeholds at auction.

The properties were promoted as a chance to invest in a “going concern”, the S-Mart lease promising rental income to investors for 20 years. However, S-Mart was not a profitable business.

The Serious Fraud Office says it was not Kiely’s intention to run the shops long term but to make short-term profits by selling the freeholds onto buyers who would be unaware that the properties they were buying were leased by a company whose turnover was too low to cover its rent.

Kiely used misleading accounts to portray the businesses as being healthy. Seven investors purchased the freeholds at auction, relying on the inflated accounts.

The defendant, who was found guilty at Preston Crown Court in May 2011 of obtaining money transfers by deception and false accounting, has now been jailed.

The Elusive Chek Whyte (Anthony Beardsley) - Have You Seen Him?

The Elusive Chek Whyte (Anthony Beardsley) - Comments from creditors welcome!


http://en.wikipedia.org/wiki/Chek_Whyte

http://www.salfordstar.com/article.asp?id=205

http://www.salfordstar.com/article.asp?id=246

http://www.salfordstar.com/article.asp?id=245

Disaster For Liverpool And Manchester Property Sector

Red Flag report spells disaster for northwest property investors
THE number of companies showing "critical" signs of financial distress in Liverpool jumped by 83% in the second quarter, according to the latest Red Flag statistics from Begbies Traynor.

The firm said the property services sector is facing most pressure, with a quarterly rise in the number of firms judged to be on the critical list.

Begbies Traynor partner John Fairbrother said: "Businesses in Liverpool – specifically in the Property Services sector – are trapped in a stagnant cycle that relies on corporate activity to flow.

"Companies in the commercial property sector are diversifying to deal with extremely slow market conditions – many agents are offering advisory services on issues such as rent reviews for landlords as there is little or no transactional work to be done.

“Very few businesses are entering into M&A activity at this time and so there are no new freehold premises coming onto the market; this has a knock on effect for property agents and other advisors connected to this cycle.

"Without a boost from Liverpool’s business community, much of the market will remain stagnant.”

In Manchester, there was a 31% increase in the number of firms judged to have "critical" issues, but the property sector again was the worst hit, with a 171% increase in distressed firms.

Partner Paul Stanley said: “Many half-finished developments sit abandoned due to a lack of funding. Quite rightly, the banks aren’t willing to provide further funding to finish developments off when demand for them is seriously diminished and it will be an uphill struggle to make a profit from the finished product."

"From a purely personal perspective, I now hold over 60 property receiverships covering several hundred properties compared to a handful between 1994 and 2008.”

Investors mount Inside Track legal Challenge - Jim Moore

Buy to let property investors are set to mount a legal challenge over millions of pound paid to collapsed property firms Inside Track and Instant Access Properties.

Angry investors allege the firms missold them buy to let property by making untrue claims about their valuations and likely rental concerns.

But a spokesman for the firms denies the claims and says any court action will be defended.

The investors are led by Tamsin Banks, 51, who blames the firms for losing around £400,000 in seven property deals in Manchester, Spain and Florida.

Ms Banks plans to issue court proceedings against the companies and their directors.

She has already met hundreds of other disgruntled landlords who claim they have also lost substantial sums in their dealings with the firms.

“I want to see justice done. I have spoken to hundreds of other former Inside Track members who have lost money and feel the same way,” she said.

Ms Banks wants other investors to join her in a class action against the property investment companies.

Inside Track held seminars for prospective landlords advertising quick riches and millionaire lifestyles at the height of the property boom. The strategy involved buying letting properties from sister company Instant Access Properties.

The firms turned over millions, but failed in 2008 as the property market was undermined by the credit crunch.

Ms Banks has a web site inviting others to pledge cash and support to their legal action. [Link: www.iap-instant-access-properties.co.uk/wordpress ]

She alleges she paid Inside Track a one-off fee of £8,000 and 3% on the value of all property purchases made through Instant Access Properties.

“With 50 – 150 people, we would be formidable and litigation costs would be spread,” she said. “If you had any direct contact with the directors by phone, email or attended a presentation, get in touch as your information could be helpful.

“With many of us pursuing our right for justice these people can be held to account.”

On her web site, Ms Banks accuses Inside Track and Instant Access Properties of misinforming prospective purchasers about rental assessments, property values and the financial interests of Inside Track directors in properties sold to investors.