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.