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UK’s first criminal convictions for land banking fraud

December 6, 2012, 4:20 pm

A City of London Police investigation has today led to the UKs first criminal convictions and prison sentences for a land banking fraud.

Omar Eshpari, 33, and Stefan Mitchell, 42, were today (Dec 6) sentenced to seven and six years respectively at Isleworth Crown Court, having been found guilty of five counts of money laundering.

The pair masterminded a three million pound deception, conning the elderly and vulnerable into buying plots of land that were either worthless or massively over-priced.

A string of fraudulent companies were set up and sold land bought cheaply in Halifax, Folkestone and Bromley or plots they did not even own in.

The locations were marketed as being in a prime position for development and would quickly increase in value.

In reality investors were putting their money into plots located on farmland, in the Green Belt, within an Area of Outstanding Natural Beauty or on the sides of hills, with no chance of gaining planning permission let alone building houses.

Some received small returns while others lost everything, with the gang funnelling off the funds into a network of bank accounts.

Over a two-year period over 300 victims fell foul of the gang, with one elderly man who was suffering from terminal cancer losing almost £300,000, and a retired woman being conned out of £373,000.

Eshpari, from Enfield and Mitchell, from St Albans used virtual offices with London addresses, and professionally produced brochures and websites to legitimise their operation.

Cold calling and high pressure sale tactics were put into play to target and then bully people into buying into their scheme.

By late 2009 more and more investors were becoming concerned about the lack of returns from Pemberton International, Eldon International, Willow International, Allied Investment and Abacus Investment and were increasingly asking for their money back.

But following reports from numerous victims and a detailed City of London Police investigation, working closely with agencies including Companies Investigation Branch and the Financial Services Authority a series of arrests were made in October 2009.

DC Dave Parkinson, from the City of London Police, said:

“Eshpari and Mitchell preyed on the vulnerable, exploiting their desire to put their savings in something tangible that would provide them with long-term security. They cared not from whom they stole, but only for what they could take. 

“Plots of land that were good for nothing and worth a fraction of the asking price were marketed as a sound investment with planning permissions in the pipeline and development round the corner. The gang used all the tricks of the trade to give the appearance of legitimacy, picked off their targets over the phone and then disappeared without trace with their savings. 

“A complex and painstaking investigation by the City of London Police has ensured Eshpari and Mitchell have now been made to pay for the deception they created and the damage they caused with their freedom.”

Commander Steve Head added:

“The UK’s first land banking fraud convictions is a landmark moment for all those committed to combating and preventing fraud and sends out a clear message to the criminal community that law enforcement is wise to their new tricks and is taking decisive action.”

Land banking fraud has become increasingly prevalent in recent years, with fraudsters swapping shares in a company for plots of land as a way to entice people into making an investment.

Victims are led to believe the land is ripe for development and can only go up in value.

The reality is that it is worth a fraction of what it is being marketed at, or even nothing at all and the people they have trusted with their savings are in fact highly skilled criminals.

 
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