Buy to Let Investment Fraud Sentencing

House scam bosses are sentenced

Five Gateshead company directors who conned property investors out of almost £80m have been sentenced. John Potts, Peter Gosling, Natalie Laverick, Eric Armstrong and Peter Graham ran Practical Property Portfolio (PPP), which was closed down in 2004. Investors were told their properties would be refurbished and rented out but much of the work was not done. The five admitted fraud charges - four were jailed and one defendant was given a 21-month suspended sentence.

The five had faced a four-month trial charged with conspiracy to defraud between January 2001 and March 2003. However, last month Potts of Silksworth Hall Drive, Sunderland; Gosling, 57, of Rothbury Gardens, Lobley Hill; and Laverick, 28, also of Silksworth Hall Drive, admitted the conspiracy charge.

Graham, 62, of Topcliffe, Sunderland, admitted three counts of fraudulent trading and Armstrong, 55, of Moorside North, Fenham, Newcastle, two fraudulent trading counts. Potts was jailed for five years; Gosling was jailed for three years and both Armstrong and Graham were jailed for two years.

Brazen fraud

Laverick was given a 21-month prison sentence suspended for two years for offering to give evidence against the others. The court heard PPP had been set up in the late 1990s and its offices were based at the Team Valley Trading Estate. The hearing heard that investors were asked to put money into derelict properties, but they were just left unoccupied. Judge Guy Whitburn QC said: "Where did the money go? The nature of what has been termed a pyramid scheme is that it may disappear into a black hole.

"It is abundantly clear - Potts in particular, Gosling to a lesser extent, and the others - led an extraordinary lifestyle.

"It was in particular a brazen fraud."

Courtesy of the BBC

Repossessions on the rise says FSA

Repossessions on the rise says FSA

A total of 46,750 properties in the UK were repossessed during 2008 - an increase of 68% on 2007 figures, according to the financial services authority (FSA).

However, it said banks are taking measures to avoid ejecting homeowners from their properties where possible meaning that many of the repossessed properties will be buy-to-let, abandoned or will have been used for property fraud. The number of properties being taken into possession during Q4 2008 was slightly lower than it had been over the previous quarter, but this was still 60% up on Q4 2007. The regulator’s results also showed a rise in the number of borrowers falling into arrears, up 31% from 2007 to 377,000 at the end of 2008.

Research company Datamonitor in a report today called 'UK Buy-to-let Mortgages 200' said a greater percentage of buy-to-let properties had been taken into possession at the end of the first half last year than properties in the mainstream mortgage market. Roderick Logan, who wrote the report, said: 'This trend is set to continue, as there is less reluctance on the part of lenders to repossess properties if the owner lives elsewhere and owns a whole portfolio of properties. Other factors have also contributed to an increase in repossessions such as relaxed lending policies which enabled property fraud and property owners abandoning their properties. 'As a result, the increase in repossessions is not as bad as the headline figure suggests and can serve to expose activities such as illegal property fraud.'

Courtesy of Propertyweek