Essex and London Properties shut down by the High Court for operating a Ponzi scheme

Essex and London Properties Limited, which apparently offered 8% per year for three year bonds and 12% for one year bonds (I have been unable to verify whether this was correct or whether the Financial Times has swapped the two coupons around, which would make more sense), has been liquidated by the High Court.

The Insolvency Service has characterised the company as a Ponzi scheme, on the basis that when the records of its escrow payment providers were analysed, they indicated that new investors’ money was being used to pay existing investors’ interest payments, instead of interest payments coming from property returns.

Essex and London Properties claimed to buy properties to sell them on for a profit or rent out. In reality, only one house was ever purchased, using less than 1% of investors’ money. A statement of affairs filed by the administrator in January 2018 states that this house worth £155,000 and cash of £350,000 was all that was left of £20 million invested. (The statement of affairs listed creditors of £11 million; the recent FT article says £20 million.)

The FT article says that ELP incorporated in 2005. While technically correct, the scheme in reality began in 2015. The people behind ELP acquired an existing dormant company called Merlin Radio Limited and renamed it to Essex and London Properties Limited, giving the company a false appearance of longevity to anyone who looked at the Companies House record and did not probe deeply enough.

According to the Insolvency Service, Essex Police are investigating a number of suspects involved in the scheme.

How do I get my money back from Essex and London Properties?

If you invested in Essex and London Properties, you should be on your guard against anyone contacting you and telling you that they can recover your money. It is highly likely that you will be targeted by fraud recovery fraud, and the FT reports that investors have already been targeted. If anyone asks you to pay “legal fees” or “liquidation fees” to release your money it is almost certainly a scam.

The figures identified by the administrator in January 2018 suggest that investors have lost nearly all or all of their money, unless they were advised to invest by an FCA-regulated adviser, or held the investment in a SIPP without regulated advice.

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