UK & World News
Judge Finds Fraudsters Guilty Of Land Scams
A High Court judge has ruled that a scam exposed by Sky News, which robbed investors of millions of pounds, was indeed "illegal".
But the victims are unlikely to ever get their money back and the ruling has been described as a "bittersweet victory".
In April last year, a Sky News investigation uncovered evidence that increasing numbers of UK investors were falling victim to land-bank fraud. We exposed the activities of a company called Asset Land Investment (ALI) run by directors David Banner-Eve and Stuart Cohen.
ALI sold plots of land across the UK, with the promise that investors would make a significant profit within two to three years when the land obtained planning permission.
Investors were told by sales staff that Asset Land would apply for the land to be "re-zoned" and that they had property developers lined up to purchase the sites. To date, no planning permission has been obtained for any of the sites.
Following our investigation, the Financial Services Authority became aware of about 1,200 investors paying between £5,000 and £25,000 for each individual plot of land. They took measures to seize the company's assets.
Although the FSA has brought other similar cases to the High Court, this was the first of its kind to be contested by one of the defendants.
Evidence obtained by Sky News was submitted in court, but company director David Banner-Eve denied knowledge of his staff making untrue claims to investors.
However, the Honourable Mr Justice Andrew Smith found that David Banner-Eve had been deliberately dishonest and did know about the sales techniques used by his brokers. He ruled that ALI had been running an illegal land bank by operating a collective investment scheme without FSA authorisation.
Cohen did not attend the trial. It's thought, following his confrontation with Sky News reporters, he may have fled to Panama or Spain.
The FSA is now seeking orders from the High Court for the payment of at least £15m by Banner-Eve, Cohen and the Asset Land companies to return to investors. However, much of this money is unlikely to materialise. The FSA has identified only limited assets that would pay a small proportion of this.
Tracey McDermott, director of enforcement and financial crime at the FSA, said: "While this is an important case from a legal point of view, we are acutely aware that most, if not all, investors will only get a fraction of their money back. This is therefore something of a bittersweet victory."
After the judge's ruling one Investor, Andrew, from Birmingham, told Sky News: "It's a waiting game now to see what we get back. I got married last year and after realising I'd lost £10,000 to this scam had to work six to seven nights a week. We almost had to cancel our wedding.
"But I haven't suffered as much as others. Some have lost up to £150,000."
Andrew says he still gets calls from companies he believes are linked to ALI offering him "investment opportunities". He suspects he and others are still on a list used by fraudsters trying to sell other scams.
In addition to the FSA's case, trading standards is currently conducting a criminal investigation into Asset Land, Cohen and Banner-Eve.