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Property Tribes has continually warned of companies offering suspiciously high returns from property developments so it comes as no surprise that the High Court has shut down a Ponzi scheme operated by a property investment firm after ruling that it was misusing close to £20m of investors’ money.
Having been incorporated more than 13 years ago, Essex and London Properties Limited (ELP), which has a registered office in Sidcup, Kent, claimed to acquire properties with the intention of selling them on at a profit or getting rental income for investors.
A number of investors, many of which were approached directly or via intermediary platforms, were enticed to invest by offers of an 8% annual return paid quarterly if the money was held for three years or 12% 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, with Essex Police, which has an ongoing investigation, calculating that to date, £18.9m has been obtained from creditors and investors.Full/source storyIt was later found, following forensic investigation, that investors were being repaid from new investor's payments and that the company had only purchased one property for £147K.Companies House names the Director as Mitchell Mallin, this being his only directorship.Here is a reprise of our "Property Fraud Awareness Week" from last year, which warned about such schemes:Property Fraud Awareness Week 2017 - powered by Anthony Gold SolicitorsMonday An overview of property fraud & warning signsTuesday Mentor, JV, property deals, and loans scamsWednesday Rent to Rent scamsThursday Identity fraud - rental property perspectiveFriday Lettings fraud SEE ALSO - Glenn Armstrong Bankruptcy Case - outcomeUP NEXT - How to stay safe lending money & property JVsDON'T MISS - Anthony Gold announce victory - JV fraud caseNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
It is shocking to myself that investors are so impressed by a passive return of 8% when if they did their own research and invested themselves- it could be achievable.
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