Detectives are investigating one of Britain’s biggest buy-to-let schemes in which large numbers of investors have seen their savings wiped out.
They fear thousands of people who sought to cash in on the buy-to-let dream during the boom years of 2004 to 2007 may turn out to have been victims of organised fraud.
The Sunday Times – David Leppard
The Serious Fraud Office (SFO) is investigating alleged scams that have cost government-owned banks such as Northern Rock, Royal Bank of Scotland and Bradford & Bingley millions of pounds on loans that should never have been made.
Senior police officers said the full scale of the buy-to-let scandal was only beginning to emerge in the wake of the credit crunch and the collapse of house prices.
One chief constable said: “We can expect to see one or two of the same type of [scheme] emerging in every major city.”
The SFO said last week it was investigating two alleged buy-to-let frauds, involving properties in Leeds, Cardiff, Nottingham, Derby, Liverpool, Hull, Newcastle upon Tyne, Glasgow and London. Police in Greater Manchester, the West Midlands, and West Yorkshire are also involved in the inquiries.
At the centre of one of the biggest police investigations is Morris Properties, which specialised in student new-build flats and refurbished homes in Leeds and the northeast. It sold 1,000 properties before going bust last summer.
The firm was established by Simon Morris, a local developer who built up a £69m fortune by selling buy-to-let properties.
Morris’s firm lured investors with promises of substantial “discounts” on flats that were allegedly overpriced, and guaranteed rental income, which in many cases failed to materialise. Investors, drawn in by the mirage of ever-increasing house prices, were easy prey.
With property prices now falling in some areas by as much as 50%, many of those investors are facing ruin. The victims include doctors, nurses, teachers and builders who have seen portfolios worth hundreds of thousands of pounds vanish. Many have had their properties repossessed or been forced to sell at knockdown prices.
A whistleblower who once worked for Morris and fell into debts of £500,000 after making buy-to-let investments with the firm said he had received threats after helping the police. Morris denies any wrongdoing.
Last week Morris was accused by lawyers representing 133 of his former clients of overseeing a scheme in which flats were sold to innocent investors for as much as 100% above their real value.
Hammad Ahmad, a solicitor with Max Gold Partnership, said his clients would launch a group legal action in the new year against the Morris companies and several conveyancing solicitors and valuers involved in the sales.
Please contact me regarding this article as my wife Jane and I were the ‘whistle blowers’ in all of this, and we would be pleased to arrange an interview with you that describes the personal issues behind this story, and how we fought, not just for ourselves, but on behalf of hundreds of other similarly affected investors, for over two years to get anyone to listen to us.
Not only did we personally lose our whole investment property portfolio, we were also hit by a High Court Writ for defamation and libel for over half a million plus damages for trying to expose this whole affair. Luckily, with the demise of the company attacking us, that threat at least has now gone.
I look forward to hearing from you.
Many thanks for your comments and very sorry to hear about your problems.
We are quite happy to publish your story and have a number of Public Relations and media facilities for the purpose. We regularly work with high profile News reporters.
Would suggest you may wish to consider putting your comments in writing.
Please email:
info@property-mole.co.uk
We have followed events for a number of years where it has been quite clear that property investors have been duped into parting with substantial sums of money to companies who should have been closed down by the authorities years ago.
Sadly, directors of such companies have invariably made £Millions and moved such money to secure offshore facilities before the totally inadequate Fraud Officers have stirred into belated action.
We are also central via Planning Watch UK to the investigation of Property and Land Management companies who have mushroomed in recent years and seem to operate with impunity charging quite ridiculous sums of money to unsuspecting home owners.
Both UK and Devolved Governments have to get a serious grip of totally inadequate legislation that allows such companies to flourish.
The “joke” statement on the Serious Fraud Office web site demonstrates the fact that the UK is now seen to be a prime operational country for anyone who is setting up a business to obtain money by deception:
http://www.sfo.gov.uk/cases/cases.asp
Case Acceptance Criterion
The key criterion we use when deciding whether to accept a case is that the suspected fraud appears to be so serious or complex that its investigation should be carried out by those responsible for its prosecution.
The SFO could not – and does not – take on every referred case of suspected fraud. SFO resources must be focussed on major and complicated fraud.
Factors considered:
* does the value of the alleged fraud exceed £1 million?
* is there a significant international dimension?
* is the case likely to be of widespread public concern?
* does the case require highly specialised knowledge, e.g. of financial markets?
* is there a need to use the SFO’s special powers, such as Section 2 of the Criminal Justice Act?
Best wishes
Barrie Haycock
Editor – Property Mole
Hi,
I too have been at the mercy of scams, unfortunately twice now, so I am keen to ensure any other company I deal with is genuine.
I am looking for a rputable company that can source uk and off shore properties for holiday/rental income.
I have found International Property Mole organised by someone called Chris, thats all I know. Could u spread any light on them?
Ms Ferguson
Unfortunately the International property market is fraught and businesses operating in this huge market sector are outside of the scope of UK law.
Buyer beware is the golden rule and always take professional advice from UK based solicitors.
We do not have any information about the International Property Mole business you have mentioned other than it is nothing to do with this web site or business.
Best wishes
Editor
Everyone should always be very careful making business online. It does not matter if it is the regular ebay buy or the very nice price on a used car website. Be very careful sending money anywhere. There are so many different frauds and there will always be new ones! In these times you always need to double check everything.
Greetings,
Mike