Buy to let property scam netted £450,000

Buy to let property scam netted £450,000

17:28 PM, 29th February 2012, About 12 years ago 5

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A sham property investment company that conned landlords out of £450,000 has been wound up by the Insolvency Service.

Modo Homes Group lied to investors about selling repossessed properties on behalf of banks and building societies – and demanded fees from landlords to arrange viewings.

After complaints, the Insolvency Service investigated the company and discovered the directors were deliberately misleading investors and had never sold a property.

The High Court heard that the company, based in Liverpool, conned investors by:

    • Demanding reservation fees before releasing property addresses which stopped investors from carrying out due diligence checks to verify the details of the investment offer
    • Failing to tell investors that the fee was non-refundable
    • Failing to provide invoices and receipts, and failed to answer calls and letters from investors
    • Stopping valuers commissioned by investors from visiting properties
    • Marketing properties without permission of the owners
    • Collecting multiple reservation fees for the same property

The company failed to provide any accounting records, which the directors claimed had been mistakenly thrown into a skip by workmen carrying out some work on their home.

The company’s bank records show that it had received £454,737 from would-be investors.

Colin Cronin, of the Insolvency Service, said: “Modo Homes Group raised money from investors on false representations and then made it very difficult for investors to contact the company to progress the property purchase.

“These proceedings show that the Insolvency Service will take firm action against companies and directors which operate in this way.”

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17:13 PM, 1st March 2012, About 12 years ago

So they have been wound up.
What about all the money then.
This will not be recovered; just showing that unforutunately if you indulge in white-collar crime it really does pay!

Mark Alexander - Founder of Property118

20:25 PM, 1st March 2012, About 12 years ago

Hi Paul

Having been a victim of white colar crime I can assure you it did not pay for the criminals that destroyed their own lives and cost many other people a lot of money and to whom they caused much anguish. All of their assets were siezed as proceeds of crime, save for what they had frittered away on wine, women and song and they served time at Her Majestys as was right and proper.

If you want to read the full story as it unfolded over nearly three years it can all be read on a Property tribes thread which I have linked to below. I wasn't even aware of Property Tribes until well over a year had passed since the thread was started so if you want the full story there's a lot of reading. To cut a long story short, three criminals employed by a franhise operating under a company in which I owned a 40% stake were the cause of the collapse of a business and the redundancy of 300 people.

22:14 PM, 1st March 2012, About 12 years ago

Do you think that the same justice will be served on these latest miscreants.
I very much doubt it;  mores the pity.
I just don't believe the police will give this latest situation any consideration.
Much like they don't seem to think that embezzling LA are not committing crime when they run off with deposit and rent monies.
And when tenants refuse to pay rent and trash and steal items from a property.
They consider these civil offences when clearly they are not and they refuse to take any action.
It would be very interesting to see what occurs with this latest situation.
I very much doubt whether they ever have to pay back the monies and the consequential losses they have caused.
Such treatment sends out the wrong message to these people that you can set up a company; rip people off, go out of business and start up under a different name with the same people running things. 
We see these types on that rogue traders programme  all the time.
The outcomes that happened with your situation I very much doubt will occur with this latest one.
Perhaps it would be worthwhile keeping tabs on the people who were involved in this fraud so that we can avoid them and hopefully your site will be able to advise as to who was involved in this company so they can be avoided in future.

Mark Alexander - Founder of Property118

22:32 PM, 1st March 2012, About 12 years ago

The reason these people rarely get brought to justice is that the victims give up on the process. It took us nearly three years to get the outcome we wanted. It was important to us to make this happen as it seriously affected our personal credibility. If was was a case of a few grand then I have to admit, I would probaly have given up after a few months too. However, in our case it was a multi million pound business established with 19 years of hard graft, blood, sweat and tears. try telling 300 people they have no job on Xmas eve and then being accused of being a crap businessman, that's was my motivation.

23:26 PM, 1st March 2012, About 12 years ago

Surely though the police should be prosecuting so that it should not be the victims of the fraud that have to pay for legal action.
They won't bother in this case and so the fraudsters will get away with it.

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