Regulation  

Insolvency service shuts down £1.5m land banking scam

Insolvency service shuts down £1.5m land banking scam

The Insolvency Service has shut down a £1.5m land banking scam which falsely claimed to be regulated by the Financial Conduct Authority and that investors could expect short term gains of between 200-400 per cent.

Gilbert Webb Estates Ltd was found to have continued a land banking scheme previously carried on by Complete Building Systems Ltd and other companies, whose affairs have also been brought to an end by the Insolvency Service for ripping off the public.

A warning about the firm published by the FCA in April 2013 stated it believes Gilbert Webb has been providing financial services or products in the UK “without our authorisation”.

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The Insolvency Service said it led investors, including recovering cancer sufferers, to believe the near-worthless plots of land in Cheshunt, Hertfordshire could secure better returns than pension plans, equities or Isas.

The company’s now defunct website claimed that its land brokers were fully conversant with all aspects of land acquisition and development.

It said: “With a strong track record as a commodity and exceptionally high growth potential, analysts agree that strategically placed land should be included in every astute investor’s portfolio.”

The investigation found that the majority of the £1.5m received from investors, being some £959,000, was withdrawn in cash from the company’s account.

Company investigations supervisor Chris Mayhew welcomed the court’s winding up decision, stating that this was “a bare-faced scam” on pensioners who have lost out financially and otherwise.

“Contrary to the company’s claims, the only collective expertise was the skill to part people from their money,” he added.

The investigation also uncovered links with other companies that were previously engaged in selling land to the public at exaggerated prices, including:

• Century Property Group (formerly Century Land Group) which was ordered into liquidation on 4 April 2012;

• Boldacre which was liquidated on 30 May 2012;

• Trinity Associates which was liquidated on 10 April 2013; and

• Hildon Property and Raincode which were liquidated on 10 May 2013.

Carl Ballard and Mark Tull were each disqualified from acting as directors as a result of undertakings given to the Secretary of State in respect of their conduct as directors for a period of 14 years commencing on 10 and 22 July 2014 respectively.

peter.walker@ft.com