A property company that lured investors to part with almost £20 million with false promises of wealth has been shut down by the courts.
Essex and London Properties encouraged 800 investors to part with between £5,000 and £100,000 each, with lies and forged documents, to join a venture making profits from buying homes.
Investors were told they would pick up a return of between 8 per cent and 12 per cent a year and that the company owned a portfolio of properties that were showing gains in value.
The reality was the company was paying existing investors interest from the money they were collecting to buy property from new investors. The documents proving property ownership were falsified.
Essex and London Properties only bought one home worth £147,000 in Harwich, Essex.
The litany of lies was revealed in London’s High Court, when a judge was asked to wind up the business in the public interest by the government’s Insolvency Service.
David Hill, chief investigator for the Insolvency Service said: “The company persuaded members of the public to part with substantial sums of money to invest in property. Only one property was purchased and the money raised from the public was used to benefit those running the company.
“As so often is the case, if an investment scheme appears to be too good to be true, it probably is. There is an ongoing investigation into those individuals controlling Essex and London Properties Limited by Essex Police, who are liaising with the Crown Prosecution Service with a view to prosecuting a number of suspects.”
The company collapsed in January with more than £11 million of debt.
Much of the missing money either went to people involved in the company or advisers recommending the investment, for which they were paid up to 35 per cent of the investment value.