Wednesday, 12 December 2012

"Executives who masterminded £1 trillion deception of young and vulnerable people jailed for land banking fraud"

From The Daily Mail:

The directors of Britain's largest home building companies have become the first in Britain to be jailed for land banking fraud today after being convicted of conspiring with mortgage lenders to trick young and vulnerable people out of up to £1 trillion over the past twenty years.

They masterminded the deception, conning people into buying badly built homes on plots of land that were either worthless or massively over-priced. Investors were promised a stream of future capital gains that failed to materialise.

The Office of Fair Trading is also looking into claims that the companies control up to half a million plots of land with planning permission but are deliberately withholding these from the market in order to ramp up prices.

Following a separate investigation, the Financial Services Authority has set up an enquiry to establish whether senior figures in the City of London were aware of the scheme, as they also stood to benefit if the victims could be persuaded to borrow money secured on the over-priced land.

A source close to the investigation added: "The LIBOR-fixing scandal was nothing compared to this."

The Tory party treasurer confirmed that all donations the party had received from home builders or the financial services sector in the past ten years would be forfeited and paid over to the Electoral Commission, but denied any knowledge of the sleazy practices of their donors. A spokesman from the Serious Fraud Office refused to comment on rumours that several million NIMBYs were about to be charged with aiding and abetting.


The Stigler said...

What's the old saying? You can't con an honest man?

These "victims" were just greedy homeys who thought they were benefitting from inside information about land without planning permission that would soon flip. If you lose £300K investing in a scheme run by a couple of wideboys, where their claims could have been verified with an hour's work you probably never deserved it in the first place.

Well worth reading No One Would Listen about Bernie Madoff - many of the fund managers who invested in him thought he was bent, but that he was operating front-running rather than doing a Ponzi scheme. If he'd been caught front-running, the worst thing is that they'd have got their investment back.

Graeme said...

surely it has been happening ever since builders nstarted offering "low-start" mortgages...and kids ignorant of compound interest signed up, with a parental guarantee...and wiped out their parents' savings. This has been happening since at least 1990.