Eight men charged over land banking

17 April 2013

The Financial Conduct Authority (FCA) has charged eight men in relation to a land banking scheme.

The new regulator, which replaced the Financial Services Authority (FSA) on 6 April, has charged the men with "conspiracy to defraud contrary to common law between August 2008 and November 2011 and criminal offences relating to the carrying out of a regulated activity without authorisation or exemption".

The charges are a result of Operation Cotton, which is an ongoing investigation by the regulator into the activity of three land banking companies: Plott UK Limited, European Property Investments (UK) Limited (EPI), and Stirling Alexander Limited. The FCA says these three companies may have taken more than £5 million from UK investors between 2008 and 2011.

The men - Scott Crawley, Daniel Forsyth, Ross Peters, Aaron Petrou, Ricky Mitchie, Dale Walker, Adam Hawkins and Brendan Daley - will attend City of London Magistrates Court on 10 May.

What is land banking?

Land banking is the practice of dividing land into smaller plots to sell to investors, who are led to believe it will become available for development and soar in value. However, the land is usually unlikely to ever be built upon and in some cases does not exist.

The Insolvency Service also works to combat these companies, and has so far stopped 93 of them. Most recently it wound up Trinity Associates Limited, a Somerset-based company selling plots of land as an investment in Bridgewater in Somerset, and in West Cheshunt in Herfordshire. The company has been ordered into liquidation.

Chris Mayhew, company investigations supervision at The Insolvency Service, says: "These cold calling savings raiders can devastate lives and I would urge people to be cautious when contacted out of the blue. As ever, if a scheme sounds too good to be true it usually is."

This article was written for our sister website Money Observer

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