Investments  

Caribbean properties of 'eye-watering low value', court told

Caribbean properties of 'eye-watering low value', court told
David Ames at Prospero House Crown Court. Source: Central News

Investors poured millions of pounds into unbuilt Caribbean properties of "eye-watering low" value, a court has heard.

David Ames, 70, is accused of conning his victims when he was running developer Harlequin Management Services South East Limited (HMSSE).

Prosecutors claim he persuaded them to sign contracts without revealing the true state of affairs at the company, causing a total loss of £226mn.

Ames allegedly encouraged investors to purchase the properties before they were built - then failed to give them anything in return.

Thousands lost their own life savings and pensions between 2006 and 2015, jurors at Prospero House Crown Court have heard.

Michael Slade, a former HMSSE employee who worked in procurement, told Southwark crown court he visited a resort on Saint Vincent and said the ICE Group managing the construction had been pulled off the site and the situation was "quite chaotic".

He said: "When we arrived at the site, it was very much a construction site, there was not much activity there. It was very messy.

A surveyor’s report on the construction proved to be "quite damning". Slade added: "I thought the value of work completed in the surveyor’s report was eye-wateringly low. I was staggered.

"I put it down to a lot of waste and poor management. The site itself had a lot of remedial issues and poor construction. The surveyor’s report was quite damning."

Slade said he asked to see the contract between contractors and developers and was handed a two-page document that simply listed the types of buildings intended to be built.

"There were not real terms around how they were going to be building or the costs. It was not a construction contract."

Investors had already paid a 30 per cent deposit on various ‘units’ or apartments on the Caribbean properties.

Slade said he was concerned that a number of investors could not afford the remaining 70 per cent and mortgages would need to be made available to them.

Despite HMSSE advertising mortgage facilities to investors, Slade said there were none available.

He told the court: "The mortgages were very much going to be necessary for a lot of investors to fund [their purchases].

"In the ordinary course of events the 70 per cent would be due in stage payments linked to the building of the purchased property.

"He [Ames] was going to wrap it all up as a mortgage at the point of completion."

Slade said the idea of mortgage facilities being arranged after the sale of the property was ‘a little bit last minute.

"Anybody who’s ever bought a house knows you arrange your finance before you sign the purchase."

Although a qualified accountant, Slade described how his role at HMSSE was fundamentally to raise finance for the company.

He said: "Dave [David Ames] was fairly adamant it wasn’t an accountant role. I wasn’t responsible for the day-to-day financial operations of HMSSE.’