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Two men sentenced after Britain's first Land Banking Fraud convictions

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Two men have been jailed at Isleworth Crown Court on the 6th December 2012 following a £3 million land banking fraud which involved more than 300 victims and took place over a two year period.

Omar Eshpari and Stefan Mitchell have been sentenced to seven and six years respectively following convictions for five counts of money laundering.

The two men fraudulently sold plots located on farmland in the Green Belt, within an Area of Outstanding Natural Beauty or on the sides of hills, which had no chance of obtaining planning permission, despite marketing them as being in prime position for development which would quickly increase in value.

The investigation began following a number of reports from investors about the lack of return from Pemberton International, Eldon International, Willow International, Allied Investment and Abacus Investment and a number of arrests were made in October 2009.

Following the sentencing decision, Commander Steve Head said; ‘The UK’s first land banking fraud convictions is a landmark moment for all those committed to combating and preventing fraud, and sends out a clear message to the criminal community that law enforcement is wise to their new ticks and is taking a decisive action.’

Land banking fraud is a property type fraud and is becoming increasingly prevalent. This is where investors are led to believe they are investing in land that will significantly increase in value. The factors supporting this belief would be for instance plots of land in areas with high house prices, a declared government intention for increased housing or the plot is close to land that has been allocated for development.

The fraud is perpetrated by the reality being far different. The plot would have little or no development potential and it may be unlikely to get planning permission. The land may not even exist or if it does it may not actually belong to the person actually selling it. It is very difficult to try and establish this.

These cases are notoriously difficult and prosecutors seem determined to pursue them aggressively in the current climate. The City of London Police has a particular interest and is dedicating resources to this area. The frauds are often perpetrated on a national scale and the paper trail can be complex.

By Victoria Tague

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