Missing Madeleine
Come join us...there's more inside you cannot see as a guest!

Brits lose millions in Land Bank Fraud

Go down

Brits lose millions in Land Bank Fraud

Post  Panda on Sat 28 Apr - 7:12

Stuart Cohen, president of Panama-registered Asset Land Investment, reassures would-be investors
6:04am UK, Saturday April 28, 2012

Roddy Mansfield, Sky News Investigations

An increasing number of UK investors are falling victim to land-bank fraud, according to evidence uncovered by a Sky News investigation.
Figures released by the Insolvency Service reveal 67 land-bank companies have been forced into liquidation since 2009, which collectively lost investors £50m.

Their classic target victims are elderly, because they're more trusting and more likely to have disposable cash.

Financial Services Authority spokesman Jonathan Phelan
In total, land-bank schemes are estimated to have lost UK investors £250m and complaints to the Insolvency Service have increased 33% since 2007.

Sky News has confronted a company implicated in defrauding small investors out of their savings in a land sale scam.

Asset Land Investment (ALI) markets plots of land to the public - land it says is about to receive planning permission to build homes, yielding huge profits for the investor.

But the land is often in green belt areas that have little chance of being developed and investors can be left with plots they cannot sell.

Claire McKendree-Wright from Tunbridge Wells was persuaded by ALI brokers to put her life savings into two parcels of land in Newbury and a further two in Harrogate.

Land banks sub-divide rural tracts into smaller plots and sell to investors

A single mother with five children, Claire paid £63,760 for the plots. She claims she was told her investment would increase threefold in 18 months.

She said: "They sounded so plausible. They told me they do all the background work for their customers and they only sell plots that are going to be snapped up for building.

"I was left to feel there wasn't a shadow of a doubt the plots would get planning permission and that I couldn't lose my investment because it was like putting my money in the bank."

She says she was told that she could come out of her 'investment' at any time simply by notifying her ALI broker.

But when her personal circumstances changed and she asked to withdraw, she says ALI refused to return her money.

She said: "I was out of work and couldn't get a mortgage and I desperately needed a deposit to rent somewhere for me and my children.

The website for ALI says its Lutterworth plots are sold out

"But Asset said they couldn't buy back my land once it's been sold, they can only re-sell the plots to someone else and only then one plot at a time."

Posing as potential investors we approached ALI and were offered a 990-sq ft plot in a field near Harrogate, North Yorkshire for £17,820.

ALI senior broker Jennifer McKenna insisted our plot was on the verge of receiving planning permission and our investment would triple in value.

Ms McKenna said: "When you ask me, 'Is it definitely going to get planning permission?' The answer is a categoric, 'Yes'. You just sit on it for 18 months then sell it on to a developer.

"Once it has got right-to-build status on it you can expect to see a threefold return. So if you put in £10,000 you can expect to see in the region of £30,000."

But a check with Harrogate Council confirmed there are no plans to allocate the land for housing.

The council told Sky News: "The site is outside the Harrogate district development limits and furthermore, the site is located in the green belt.

Claire McKendree-Wright put her life savings into two plots

"There is thus strict control over new developments in this area. New housing would, as a matter of principle, be contrary to national and local planning policies protecting green belt."

Harrogate Council said the earliest the land could be considered for open market housing development was 2024.

ALI purchased the field for £115,000 and divided it into 200 plots. So far they have sold about a quarter of these to investors for a total of £761,038.

In a secretly-filmed meeting with ALI president Stuart Cohen, we were also told our money was safe as we could come out of our 'investment' at any time.

Reporter: "So I wouldn't lose any money if I wanted to come out of my investment?"

Cohen: "Not at all, no. If you wanted to come out of it instantly, if you said to me, pay £20,000 tomorrow, you would only get back what you paid for it."

Asset claim on their website that, because they are selling parcels land to individuals and not collectively investing their money, they are not required to be regulated by the Financial Services Authority (FSA).

The Land Registry has warned Britons about land-bank fraud

But the FSA is warning the public to be wary of companies who cold-call them selling land. Spokesperson Jonathan Phelan told Sky: "They sound just like proper investment advisors so don't think you'll be able to spot one when they call.

"Their classic target victims are elderly, because they're more trusting and more likely to have disposable cash.

"We've seen land sold in areas of special scientific interest and land sold on a slope so steep you would never be able to build on it.

"Yet the potential investor is told that it will get planning permission. This gives rise to an element of fraud which the FSA and the police take an interest in."

As well as Harrogate, ALI marketed sites in Newbury, Lutterworth, Steeple Morden and Stansted.

Mr Cohen refused to answer our questions when we confronted him at an address in central London.

:: Follow Roddy on Twitter @roddymansfield

:: Have you seen something that needs investigating? investigations@skynews.com

Platinum Poster
Platinum Poster

Number of posts : 30555
Age : 61
Location : Wales
Warning :
0 / 1000 / 100

Registration date : 2010-03-27

Back to top Go down

Back to top

- Similar topics

Permissions in this forum:
You cannot reply to topics in this forum