UK’s first criminal convictions for land-banking fraud
Police warn that land-banking fraud has become “increasingly prevalent” in recent years, with fraudsters swapping shares in a company for plots of land.
A City of London Police investigation has led to the UK’s first criminal convictions and prison sentences for a £3m land banking fraud, conning more than 300 investors over a two-year period.
Omar Eshpari, 33, and Stefan Mitchell, 42, were yesterday (6 December) sentenced to seven and six years respectively at Isleworth Crown Court, having been found guilty of five counts of money laundering.
The pair masterminded a £3m deception, conning the elderly and vulnerable into buying plots of land that were either worthless or massively over-priced, City of London police said.
A string of fraudulent companies were set up and sold land bought cheaply in Halifax, Folkestone and Bromley or plots they did not even own in. The locations were marketed as being in a prime position for development and would quickly increase in value.
In reality investors were putting their money into plots “with no chance of gaining planning permission let alone building houses”.
Some received small returns while others lost everything, with the gang funnelling the funds into a network of bank accounts.
By late 2009 investors were becoming concerned about the lack of returns from Pemberton International, Eldon International, Willow International, Allied Investment and Abacus Investment and were increasingly asking for their money back.
But following reports from numerous victims and a detailed City of London Police investigation, working closely with agencies including Companies Investigation Branch and the Financial Services Authority a series of arrests were made in October 2009.
Commander Steve Head from the City of London Police said: “The UK’s first land banking fraud convictions is a landmark moment for all those committed to combating and preventing fraud and sends out a clear message to the criminal community that law enforcement is wise to their new tricks and is taking decisive action.”
Land banking fraud has become increasingly prevalent in recent years, with fraudsters swapping shares in a company for plots of land as a way to entice people into making an investment.