Land banking scammers who conned thousands of pounds out of investors have been closed down by the High Court.
The fraudsters claimed the value of farm land would sky rocket on the back of planning permission that was never applied for and unlikely to ever be granted, according to The Insolvency Service.
Around 43 investors paid £11,000 for plots of land after the scammers claimed the value could soar to £120,000 if planning permission was allowed.
After complaints, the Insolvency Service applied to the High Court in London to wind up the companies behind the scheme in the public interest.
The court was told that one of the companies, Curved Ball Ltd, of Horwich, Lancashire, had also received £1 million from investors in another land banking scam closed by the High Court in May 2012.
In total, Curved Ball allegedly received £1.8 million from land banking scams that has never been traced.
The company was closed by the directors and no accounts have ever been submitted to Companies House.
The other companies wound up by the court are:
- 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
- JCB Marketing Ltd in Beverley, Yorkshire
- NSS-Operations Ltd in Horwich, Lancashire
Outside the court, Investigation Supervisor with The Insolvency Service, Colin Cronin, said: “These companies persuaded people 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 little prospect of any being granted.
“Our 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.”
Land banking is an investment scam where agricultural land, often in the green belt, is bought at nominal value and divided into small plots which are sold to investors for a substantial mark-up on the promise of large returns if planning permission is granted.
Typically, the land is either not suitable for development or in an area where planning permission is unlikely to be granted, rendering the plots worth less than the investors paid.
