The fraud, featured on the BBC’s You’ve Been Scammed programme which ran this morning, began at the start of 2010 when bridging loan firm Masthaven was contacted about a potential £1.5m loan by mortgage adviser Jonathan Flynn.
The broker said that he had two clients from the Middle East who owned a £5m property in Bayswater, London. Flynn said the pair of sheikhs were seeking a £1.5m loan on the property and then provided fake passports and proof of ownership to the lender.
The pair of ‘investors’ were Ahmed Ali, 47, and Shakil Ahmed 36, and the house was actually owned by a family from the Middle East.
The family was not living in the property at the time and had put the house up for sale. The scammers had used the Land Registry to acquire the deeds to the property to find their details.
Masthaven, unaware of the scam, sent a surveyor to the property to confirm its value. The fraudsters were able to gain access to the home by arranging a viewing with the estate agent and pretending that they were representatives of an Arabian princess who required a detailed viewing to see if her furniture would fit into the property.
However the scam soon began to unravel because Masthaven policy dictates that a face-to-face meeting must be held with all clients who wish to take a loan of over £1m. When the lender contacted the borrowers, they quickly changed the loan required to £925,000.
This caught the attention of Andrew Bloom, managing director at Masthaven. He told the programme that such big alterations made him doubtful about the case.
“When we asked then why they needed £1.5m in such a rush they were very flakey with their answers,” he told the programme.
“We contacted them and a day later the loan dropped to £925,000 and that made us suspicious.”
Bloom contacted the City of London police who began to track the case and he decided to recheck the original documents provided. He looked to verify a utility bill by contacting the energy company who were said to have provided it, they said it did not match the address they had on file.
The police became confident that the case represented a fraud, but were unable to track down the criminals as every address provided was false.
But the criminals were caught when a sting operation was launched. This saw a meeting take place with Masthaven and the fake sheikhs to catch the crooks in the act.
Ali and Ahmed were arrested at the scene and later sentenced to 30 months in prison. Mobile phones seized from the pair proved that broker Flynn was the mastermind behind the scheme and he was sentenced to four years and six months behind bars.
Bloom said he was pleased that the criminals were handed lengthy sentences.
“I was delighted that people were given a significant amount of time behind bars. Mortgage fraud is not a victimless crime. It increases the payments of me and every other consumer out there.”
The police later discovered that the passports belonged to a child that had passed away and had been altered to include a different photograph, name and address. A fourth man, Shane Martin, was also implicated in the crime but remains on the run.
A director has admitted that he carried out an extensive property fraud, involving faked emails and a fictional real estate investment and totalling £250,000, The York Press reports.
However, former property firm director Guy Brudenell still denies two further frauds involving potential property investments worth £1 million.
The bankrupt businessman, who racked up debts of £21 million in 2009, admits committing fraud between the 23rd and 25th March 2009 by falsely claiming that a £240,000 investment would be put into property.
Brudenell has also admitted sending fraudulent emails in other people’s names on 23rd March, 2nd April, 15th April and 8th July in the same year.
He also admitted making an article for use in fraud by opening a NatWest bank account in 2009 which was used to hold some of the money involved.
The outstanding charges against Brudenell detail two instances where the North Yorkshire businessman deceived would-be investors into giving him six-figure sums, claiming that the money would be used for property deals.
In November 2008 he allegedly claimed £600,000 from one potential backer and, between December 2008 and January 2009, £400,000 from another.
The charges against Brudenell also maintain that he sent email messages connected to the fraud between January and September 2009.
Brudenell once had commercial interests both in the UK and abroad, including stakes in aviation, hotels, restaurants and property companies, but was declared bankrupt in 2009 after amassing debts of £21 million.
The entrepreneur was previously a director at New Bond Street-based property companies Feversham Developments and the Helmsley Property Trading Company.
His property investment portfolio included shares in two Helmsley luxury hotels, the Feversham Arms and the Black Swan.
Brudenell will now appear before Teesside Crown Court to answer for all outstanding charges against at a date to be determined.
A pair who owned a multi-million property portfolio, including a Hyde Park apartment and tower blocks in Dubai, have had their legal bills – totalling more than £100,000 – paid by the taxpayer because of a controversial government rule, the Evening Standard reported.
Syed Ahmed and Shakeel Ahmad were tried for an elaborate fraud – from which they both made £16 million – and were subsequently found guilty, yet allegedly made “ludicrous” claims of poverty in order to receive legal aid.
The title reported that the pair owned more than 20 properties, in both the UK and the Gulf, and that their other assets included a company valued at £40 million, two further companies with £25 million of profits and a Jersey-based trust fund.
According to the Evening Standard, the property portfolio included: a £2.2 million home in Middlesex, a £4.5 million apartment overlooking Hyde Park, a £1.5 million home in Buckinghamshire, a number of other British homes and two tower blocks in Dubai.
The fraud involved a complex VAT scam and, in one particular instance, Ahmed and Ahmad fraudulently traded computer chips to make £12.6 million in just 18 days.
However, the pair were awarded legal aid – the exact sum of which cannot be disclosed as it is deemed “sensitive personal data” – after they claimed they did not own any assets, instead insisting that they were owned by a network of trusts and other companies.
A controversial rule means that the frozen assets of individuals on trial cannot be used to pay defence bills, intended to ensure that if the accused are convicted the full proceeds of any criminal activity can be confiscated, the title further reported.
Commenting on the pair’s trial, a crown court judge said: “Both defendants are articulate, intelligent and educated. It is clear that they were and are financially sophisticated… they amassed a fortune over a relatively short period of time.
“They are both unscrupulous and deeply mendacious, particularly about their assets. The suggestion advanced by both of them that they are now penniless is frankly ludicrous.
“The truth is that, on any view, there are other hidden assets which they have failed to disclose. I should add that I formed my firm view that they were both complete liars when it came to revealing their assets from my observation of them throughout the confiscation hearing (including during their evidence), quite independently of the fact that they were convicted fraudsters.”
The pair have failed to repay any of their gains and have been given an extra ten-year ‘default’ sentence on top of their seven year jail term issued in 2007.
A fraudulent bank head will be stripped of over £150 million of assets, including a multi-million pound property empire, after evading British courts over one of the country’s biggest ever civil claims, The Independent reported.
Mukhtar Ablyazov, previously head of The JSC BTA Bank and a Kazakh government minister, fled Britain earlier this year after being sentenced to 22 months in prison for refusing to reveal details of his personal wealth as part of an investigation into an alleged £3 billion fraud.
Ablayoz faces forfeiting his £63 million property portfolio, which includes a £17 million property on North London’s Bishops Avenue, as the Kazakh bank attempts to recoup its losses.
The charges brought against Ablyazov by BTA detail alleged fraudulent activity while he served as the bank’s chairman between 2005 and 2009, consisting of nine separate claims totalling £3.1 billion.
Courts have previously heard how Ablayazov supposedly siphoned billions from the bank using fake loans, back-dated documents and offshore accounts.
A number of British banks who previously invested in BTA, including RBS, are set to share any reclaimed funds up to a value of £310 million.
The first of several cases brought against Ablyazov was due to start today in London’s High Court, though the former BTA head has now been barred from contesting proceedings.
The Court of Appeal noted that the fugitive billionaire had shown “contemptuous disregard” for previous legal action and that, despite avoiding custody by leaving the country, was still communicating with his lawyers.
Ablayazov continues to deny any wrongdoing, obtaining that any claims against him are politically motivated following disagreements in his tenure as a government minister in Kazakhstan. He says he now fears for his personal safety.
In a statement a representative from Addleshaw Goddard, the law firm representing Ablyazov, said: “He continues to maintain his right to defend the claims and has applied for permission to appeal the judgment.”
On Tuesday, Lord Justice Rix, one of the appeal court judges, said: “Mr Ablyazov, emboldened perhaps by the wealth at his disposal, which enables him to travel, hide and still instruct lawyers on a prodigious scale, continues to obstruct justice with an attempt at impunity for the consequences of this litigation.”
Pavel Prosyankin, managing director of BTA, said: “The court’s decision against Mr Ablyazov reinforces our belief that bringing these proceedings was the most legitimate, transparent and effective way to recover misappropriated assets and we remain committed to the process.”
A fraudster and his mortgage broker accomplice have been jailed after scamming £344,000 from two well-known high street lenders, the Halifax Courier reports.
Ejaz Ul Hassan, 33, and mortgage broker Nadeem Ghani, 30, used forged wage slips in order to obtain funds to buy four properties, Bradford Crown Court heard last week.
Mr Ul Hassan, who worked as a commission-only salesman for Safestyle UK Ltd, could not obtain a mortgage as he had failed to fully declare his income to the Inland Revenue.
He approached Mr Ghani, a previous colleague at Safestyle, for assistance in obtaining funds to purchase four houses in Halifax and Huddersfield.
Mr Ghani, a mortgage broker for Citri Ltd, helped Mr Ul Hassan to devise a scheme whereby the pair would submit forged wage slips to lenders to ensure that Mr Ul Hassan would obtain a superior mortgage product.
The fraudulent duo also involved Mr Ul Hassan’s sister, Shaista Afzal, in the scam by submitting two applications for two properties in her name.
Both claimed that Ms Afzal worked at a local jewellery shop, though it has since been discovered that she never appeared on the company’s payroll.
The men obtained advances worth £344,000 from Abbey and Nationwide which were then spent on the four properties, worth a total of £425,000 when purchased in 2007, the title reported.
The report further stated that Ul Hassan contributed £81,000 of his own cash.
The plan also meant that Mr Ghani would obtain a more substantial commission for each successful application, earning an estimated £1,200 once all four had been completed.
All three pleaded not guilty, though Mr Ghani later changed his plea on the day of trial and eventually stood as a witness for the prosecution.
Speaking for Mr Ghani’s defence, Adbul Iqbal drew attention to the fact that the offences had taken place five years ago, when his client was a young man, and since this transgression his client had an unblemished record.
Peter Higginson, speaking on behalf of the defence of Mr Ul Hassan, said that his client had never missed a mortgage repayment, and had sufficient income to cover all four debts in the future.
Ms Afzal’s counsel Soheil Khan, on the other hand, defended her client’s character, telling the court last week that the mother-of-three had a “strong work ethic and would never trouble the court again”.
Judge Robert Bartfield QC, addressing Ms Afzal, said: “I am satisfied that you were used, but you knew what you were getting into. There will have to be a prison sentence but, for many reasons, not least that you are a committed mother, it will be suspended.”
Whilst Mr Ghani was sentenced to nine months and Mr Ul Hassan was sentenced to two years in prison, Ms Afzal’s nine month sentence will be suspended for a year.
Detective Constable Ash Nuttal, of the Calderdale PCOA Team, said: “It was a set-up which appeared to be working, until financial irregularities were discovered by West Yorkshire Police. This has been a thorough investigation which has uncovered the fraudulent activities of these three, and today’s sentences should serve as a warning to those who think they can get away with committing fraud.”
A jailed fraudster who applied for 31 mortgages using forged documents has failed in an attempt to challenge an order to hand over more than £9.4 million.
Jean-Pierre Bestel built up a portfolio of 95 properties. He applied for 31 mortgages during 2007 using forged documents and falsely claimed he was earning a six-figure salary.
Bestel, 49, a former business consultant, was sentenced for three years for mortgage fraud back in March last year, reported Kent Online.
He was found to have benefited by £9,427,123 and given six months to pay it or face a further ten years in prison. It was the largest ever confiscation by Kent Police.
Last week, Bestel appeared at Maidstone Crown Court to ask Judge Charles Macdonald QC to re-try the issue of benefit.
The confiscation proceedings were taken against Jean-Pierre Bestel in his absence in July.
Bestel, who said he was staying with a friend, told the judge he suffered from bipolar disorder, which caused “extraordinary behaviour”, and that he was seeing a psychiatrist and his GP every month.
“I am still on medication every day,” he said. “One of the side effects is it destroys your memory. It is something I have to deal with every day.”
Asked if he deliberately failed to attend court in July, he replied: “As God is my witness, I didn’t deliberately miss the hearing.”
Judge Macdonald said Bestel had sent in a letter containing an enormous list of assets.
“However, his asset position remains wholly unclear,” said the judge. “He appears today by privately funded lawyers. He is well dressed. He has several classic cars.”
Gerard Hillman, defending, said friends and family of Bestel had provided the funding for the hearing. He asked for Bestel’s legal aid certificate to remain.
Judge Macdonald said he rejected Bestel’s claim that he was unaware of the confiscation hearing date and found he was “voluntarily absent”.
Macdonald added: “There is absolutely no reason to think if I allowed the matter to be reopened he would provide the necessary cooperation. Practically nothing has still been done.”
In the largest ever confiscation by Kent Police to date, a convicted mortgage fraudster has been ordered to repay over £9 million, according to a report byKent Online.
After pleading guilty to mortgage fraud in September 2010, Jean-Paul Bestel, 49, who owns a portfolio of around 70 properties, was sentenced to three years imprisonment in March 2011.Kent Police, under The Proceeds of Crime Act, have now ordered Bestel, now released from his sentence, to pay £9,427,123 at Maidstone Crown Court after it was found that he benefitted from his criminality by this amount.
Bestel has six months to pay the full sum or he will serve a further ten years in jail, Kent Police confirmed.
Commenting on the case, Detective Inspector Mark Fairhurst, said: “This demonstrates the committed approach of the Kent and Essex Serious Crime Directorate in ensuring criminals do not benefit from the proceeds of their criminality.
“Offenders will be pursued even when released from prison to ensure their assets are taken from them.”
The first ever mortgage broker to be banned and fined by the FSA for mortgage fraud has walked free from court, the release resulting from her depression.
Sadia Nasir attempted to steal more than £100,000 by submitting false loan applications to Halifax bank. Nasir entered her own bank account details on the forms relating to two properties in London and Manchester and also used a fake name for the homeowner supposedly applying for the mortgage, reported London24.
The court heard that further investigation revealed that Nasir, the Director of Sucasa London Ltd, stood to gain £44,000 on one address at 79 Pittman Gardens, Ilford, East London, and £58,907 on the second at 132A Tempus Building, Manchester.
Despite the jury finding Nasir, 30, had committed the scam, following a two-day hearing at the Old Bailey, it was prevented from finding her criminally responsible after she was earlier ruled unfit to plead.
In July 2008, the FSA banned Nasir and fined her £129,000 after finding she had been involved in the numerous fraudulent mortgage applications highlighted above. This was the first time the FSA had both banned and fined a mortgage broker for mortgage fraud.
Nasir was FSA approved and director of a firm called London Mortgage and Financial Services Limited, which traded as House of Finance. It was then named Sucassa.
The FSA had found that Nasir:
* Submitted seven mortgage applications containing false information about her own employment and earnings supported by falsified documents;
* In four instances entered her own bank details on mortgage applications for clients;
* Deliberately withheld sections of an application form from FSA investigators, failed to disclose to the FSA information relating to a County Court Judgment made against her in September 2005 and failed to disclose the true extent of her assets in an authorisation application to the FSA.
Margaret Cole, former Director of Enforcement and Financial Crime at the time and last Managing Director at the FSA, said: “Ms Nasir’s actions were particularly serious and blatant, and she poses an immediate risk to lenders.”
Nasir also was the subject of another record when in July 2009, the FSA secured a bankruptcy order in the High Court against her for non-payment of the £129,000 financial penalty levied on her by the FSA a year previously for mortgage fraud. This was the first time the FSA had taken bankruptcy proceedings for an unpaid financial penalty levied on an Approved Person.
This month, Judge John Bevan QC told jurors detaining Nasir in hospital was “not appropriate because she is being cared for in the community for a long-term, deep depression.”
He added: “The only sentence I can sensibly pass is one of an absolute discharge.
“It is certainly an unusual trial, but it is not a waste of time because there are cases in which there is a genuine issue in which a person who didn’t do it could find themselves in a mental hospital when they haven’t done anything wrong.”
Catherine Farrelly, prosecuting, said she denied playing any part in either of the applications and had no idea where these false documents had come from.
Nasir explained that even if it was a member of her staff, all of the transactions had to be carried out in her name as she was the director of the company and money goes into her personal bank account.
Farrelly stated: “She said at the time in 2007 she had been heavily pregnant and was not in a position to know what was going on.”
Nasir refused to name any of her staff but did accept that two of the addresses used in support of one mortgage application were her home and her mother’s home.
“In essence the prosecution say it was Sadia Nasir who was behind these two frauds,” said Farrelly.
She added: “She was the person who stood to gain and it was very much in her interest for these frauds to be effected.
“It is quite clear it was this defendant who was behind both of these fraudulent applications.”
Nasir, of Gardiner Road, Plaistow, was charged with two counts of fraud by false representation between March 1 and March 7, 2007.
The jury had ruled that she “did the act” on each count.
A former HSBC banker has been jailed after admitting to theft and false accounting charges, which saw him steal money from customers’ accounts and transfer money to struggling businesses failing to repay the loans he had secured for them.
Peter Nudd, 50, reportedly stole money over the course of seven years without detection. A total of 51 businesses were affected, some of whom were kept in the dark after Nudd sent false bank statements.
Nudd was a high-flying commercial manager at HSBC’s offices in Meridian Business Park, Norwich.
He stole £131,000 from one customer’s account and moved £80,000 into the accounts of ailing businesses who were failing to repay the loans he had rubber-stamped.
Nudd allegedly also took nearly £50,000 from the same account to spend on takeaways and Butlins holidays.
Nudd began moving money around the bank’s clients in 2004, and apparently thought he would soon be detected. His false accounting continued until February 2011 when a firm called Enviroserve queried why £18,164 had been taken out of its account in three payments.
HSBC brought in an investigator and discovered Nudd had moved thousands of pounds from wealthy to failing firms who he had approved for loans, but could not pay the bank back.
When questioned, Nudd, who joined the bank in 1980, admitted he had been ‘spinning plates’ by moving the sums around the bank’s clients, the Daily Mail reports.
It is estimated that HSBC’s total losses are around £220,00.
Nudd, of Martham, Norfolk, admitted one charge of theft and three of false accounting and was jailed for two years at Norwich Crown Court on Tuesday.
Nudd also asked for 46 other crimes of false accounting to be dealt with by the court.
According to the Daily Mail, Ross Burrows, defending, told the court: “It does have hallmarks of a Robin Hood story, but I think it is more a case of banking pressures which Mr Nudd found himself put under.”
Mr Burrows said Nudd had been out of his depth after being promoted to commercial manager in 2002 and had contemplated suicide after being caught.
Burrows added: “He just assumed from the outset when he transferred these funds that it would be picked up immediately.”
Nudd had not flaunted the £49,000 he had banked and continued to live in a terraced house and drive a humble Vauxhall Astra.
But Martin Ivory, prosecuting, reportedly branded his behaviour “misguided, very foolish and unnecessary”.
Mr Ivory said: “A lot of the money moved round is either to cover his own incompetence or his own concerns.”
Judge Nicholas Coleman told Nudd: “You were in a position where you assumed a high level of trust.
“We know only too well in this day and age the public expects confidence in those responsible for the management of their financial affairs.”
Despite the deception lasting for seven years, HSBC insisted last night it had “processes in place” to uncover fraud.
A bank spokesman told the Mail: “As soon as any fraudulent activity is identified, we always inform the relevant authorities and in this case the bank has worked closely with Norfolk Police and provided appropriate support.”
The court ordered Nudd to pay a nominal sum of £1 under the Proceeds of Crime Act.
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