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  • Landlords in Distress

    Property ponzi scheme shut down



    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 story

    It 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 Solicitors

    Monday              An overview of property fraud & warning signs

    Tuesday             Mentor, JV, property deals, and loans scams

    Wednesday        Rent to Rent scams

    Thursday            Identity fraud - rental property perspective

    Friday                 Lettings fraud 

    SEE ALSO  -          Glenn Armstrong Bankruptcy Case - outcome

    UP NEXT -              How to stay safe lending money & property JVs

    DON'T MISS -         Anthony Gold announce victory - JV fraud case

    NOW WATCH:

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    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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