Fraudulent Agent Avoided Prison Sentence

by Mark Alexander

11:12 AM, 6th September 2016
About 2 years ago

Fraudulent Agent Avoided Prison Sentence

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Fraudulent Agent Avoided Prison Sentence

Fraudulent Agent Avoids Prison Sentence

I have written this article to demonstrate how apathy can cost buy to let landlords a fortune.

The story is an example of how a fraudulent agent avoided a prison sentence. It is based on a real case which Property118 Action Group were involved in.

We cannot divulge names for reasons which will become apparent when you read this article.

As you may be aware, Property118 Action Group helps its lifetime members, who are victims of fraud, to seek redress though private criminal proceedings.

The case

Half a dozen landlords and a few tenants contacted us to advise us of a letter they had received from their letting agency. The letter explained the business has failed and is due to go into receivership and possibly liquidation within three months. Clients were informed that no tenants deposits had been protected and that landlords need to find an alternative agent and seek legal advice. Many of the landlords also provide us with evidence of rent having been paid to the letting agent but that it hadn’t been paid on to them. The Letting Agency didn’t have a client money protection insurance policy.

The victims reported the matter to the Police but were advised this is a civil matter.

Property118 Action Group sought Counsels opinion for the benefit of its lifetime members. That opinion confirmed that a crime has indeed been committed. That crime was “fraud by abuse of position”.

The victims went back to the Police armed with this opinion but were told there are insufficient resources to take on such a complex case. To the victims the case seemed to be very straight forward. They had hard evidence in the form of the letter from the letting agent, Counsels opinion and other documentation. However, the Police didn’t really understand the position and bowed out by using the “resource” argument. Sadly, they are perfectly within their rights to do that.

Hundreds of landlords were affected but of course they didn’t know each other so it was difficult for them to band together to put extra pressure on the Police to take the case on.

Property118 Action Group explained they don’t actually require Police and CPS involvement to organise a private criminal prosecution.

Witness statements would need to be drawn up and a case bundle would need to be presented to magistrates by a specialist criminal barrister. If the magistrates concur there is a case to be heard in the interest of the public then the case would be funded by The Crown. That would absolve the victims of all costs associated with the case, regardless of whether the accused is found innocent or guilty by a Jury. The Crown would even fund the cost of the barrister acting for them.

The catch was that no barrister will agree work speculatively on cases like this. This is because the Police and CPS are at liberty to change their mind at any time and take over the case. They would then appoint a Crown Prosecutor to take over the case.

On this basis, the Barrister starting the private criminal prosecutions wants to be paid up front for all the work necessary to get the case in front of the Magistrates. This creates a catch 22 situation, i.e. who will pay for that?

If there were 15 or more lifetime members of Property118 Action Group affected we could fund this up-front cost from member funds on the basis that we could claim it back from The Crown if Magistrates agree to the case moving to trial. Obviously we would have to be convinced by Counsel that the case had real prospects of resulting in a conviction before spending member funds.

Where there are less than 15 affected members of Property118 who are victims we offer to share the costs pro-rata with our member victims.

That’s what happened in this case because no other victims would come forward.

The Magistrates agreed with Counsel that it was in the interest of the public for a full trial by Jury to take place. They also said that if the Jury arrived at a guilty verdict the personal assets of the Directors of the letting agency would be ceased to pay compensation to the represented victims.

A date for the trial was set and we were all getting excited at publishing the fact that we helped to put a fraudster behind bars and recover funds for our members.

Now for the twist

Just a few days before the date of the trial the administrators of the letting agency business managed to find a buyer.

Miraculously, the price negotiated was equal to the amount of the unprotected deposits plus enough to offer to settle with the Property118 Action Group members. The tenants all got their deposit money back and our members got all the money they were owed plus three times the amount of their unprotected deposits and their legal costs. The arrangement was obviously conditional upon a non-disclosure agreement and the charges being dropped. This resulted in the case falling apart due to there being no witnesses to the crime so the trial was aborted in the interests of the public purse.

But what about all the other landlords you might well ask?

Their apathy was their downfall.

Tenants can still make claims against them for up to three times the level of their unprotected deposits and the chances of them ever recovering the rent that the letting agency owes to them is slim to none.

I am sharing this story to educate as many landlords as possible and to demonstrate how apathy can be very expensive. I encourage everybody who has read this far to share this message far and wide to educate other landlords.

I am also hoping that it will result in a lot more landlords recognising the merits of paying £600 for lifetime membership of Property118 Action Group.

Property118 Action Group Updates

Skipton Building Society Legal Action – strategy released, CLICK HERE for details (includes Amber Homeloans borrowers)

Bank of Ireland Legal Action – Strategy due for release later this month

Section 24 Judicial Review – verbal pleading hearing set for 6th Oct 2016. If a judicial review is granted Property118 Action Group will contribute a five figure sum towards funding it.

Income Tax on Capital Gains – campaign objectives accomplished. CLICK HERE for details.

Rent-to-Rent – little known, fully compliant strategy revealed freely HERE

Sublet Insurance launched – please CLICK HERE for details

To BECOME A MEMBER  please CLICK HERE

Our UK Buy To Let Tax Strategy



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