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Insolvency Service swoops on scam 8 April 2013

Six companies that scammed the public into investing in plots of agricultural land have been wound up by the High Court on public interest grounds, following an investigation by The Insolvency Service.

The companies falsely claimed to investors that they would obtain planning permission to dramatically increase the value of this land.

The six companies, all based in the North of England were:

•Green Crest Homes Ltd in Halifax;
•Brand Trader (UK) Ltd (formerly known as Green Crest Homes (UK) Ltd) in Formby, Merseyside;
•Sutton Wells Ltd in Horwich, Lancashire;
•Curved Ball Ltd in Horwich, Lancashire;
JCB Marketing Ltd in Beverley, Yorkshire and
•NSS-Operations Ltd in Horwich, Lancashire.

The companies traded from premises at 70 High St, Newton-Le-Willows, Merseyside, WA12 9SH. Collectively they operated a landbanking scheme selling small plots of land at a site which they described to investors as the ‘Pennine View Project’ in Liversedge, West Yorkshire.

Prospective investors were told that Green Crest Homes Ltd was seeking planning permission for residential development of the land and once they obtained this permission, the value of an average investment of £11,000 could increase by more than ten times, to as much as £120,000.

However, The Insolvency Service investigation found that the companies had made no application for planning permission to develop the land and, even if they had done, it was extremely unlikely that permission would have been granted.

At least 43 plots were sold to investors for around £11,000 each. Green Crest Homes Ltd and Brand Trader (UK) Ltd received the sale proceeds, while Sutton Wells Ltd, Curved Ball Ltd and JCB Marketing Ltd acted as marketing companies for Green Crest Homes Ltd.

Previously the three marketing companies had performed a similar role for another landbanking company CLS & Partners Ltd, which took almost £1 million from investors in exchange for plots of land at Ossett, Wakefield and was shut down in the public interest in May 2012, following an investigation by The Insolvency Service.

The Service’s more recent investigation found that Curved Ball Ltd had received funds from landbanking schemes run by CLS & Partners Ltd, as well as the Pennine View Project and several others. In total, Curved Ball Ltd had received more than £1.8m from the landbanking schemes but all of these funds had been dissipated and the company had been dissolved on the application of its directors. No adequate records were produced to explain where the money had gone.

NSS-Operations Ltd provided administrative services to Green Crest Homes Ltd and CLS & Partners Ltd.

Investigation Supervisor with The Insolvency Service, Colin Cronin, said: “These companies persuaded members of the public to invest thousands of pounds in plots of land that they falsely claimed that they were seeking planning permission for. The companies said this planning permission was highly likely to be obtained and would result in a significant increase in the value of the land. In reality, no steps had been taken to obtain planning permission and there was very little prospect of any being granted.

“The Insolvency Service will take firm action against companies and their directors when the public are deliberately misled in this manner.

“The advice to anyone who is approached to invest in land in this way is to take time to reflect, seek independent advice and research the company in question. If a scheme sounds too good to be true, it usually is.”

 

 

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