Business

World Cup land investors seek to recover losses

Victim of scam
Image caption Mike Langley lost all his life savings because of the alleged scam

Hundreds of British investors are looking to take legal action to recover lost money after being convinced to buy land in Brazil, ahead of the World Cup.

Between 2010 and 2013 thousands of investors were contacted by a London-based firm of property brokers, Pantheon Realty Consultants.

They were persuaded to invest in plots of land which, they were told, would rise in value due to the World Cup.

The City of London police have since shut down the company's UK website.

Investors have lost millions of pounds and in many cases their life savings.

Frustrated by low returns on savings in the UK, hundreds were persuaded by Pantheon to invest in plots of land which, it was claimed, were ripe for development and would rise in value due to the World Cup, the Olympics in 2016, and Brazil's rapid economic growth.

Life savings

Hundreds bought plots of land near the World Cup destination of Fortaleza, for which they typically paid £10,000. But at the end of last year, they learned that Pantheon had been wound up by the Insolvency Service after failing to file accounts.

Many have still not received their title deeds. Where they have, the plots turned out to be worth just 200 Brazilian reals - just over £50.

Image copyright Getty Images
Image caption The address given by the company, Pantheon Realty Consultants, was at the Gherkin building

Those who made an initial investment were called repeatedly by sales people keen to sell further plots. The victims range from a widow with cancer in her eighties, who lost more than £70,000, to a 26-year-old who lost £26,000.

The investors believed they were being careful. Pantheon Realty Consultants (not to be confused with other companies called Pantheon) were members of the Association of International Property Professionals (AIPP) - a British trade body aimed at educating and informing people about how to buy property safely abroad. The company had an address at 30 St Mary's Axe, London - also known as the Gherkin building.

Mike Langley, an energy consultant, and a victim of the alleged scam, said: "With an address in the Gherkin I thought, they're a reputable company. If you look at their online web-page - it's [US website] still up now - it's very glossy. It's very professional. And initially the people sounded professional.

"I think it was in May 2013, I was approached by another gentleman who was very aggressive."

He said: "You've got to buy the land now. There's no more plots left - we've sold them all - there's only a few left - you've got to buy it now.'

"Then I was getting calls [with people saying] 'Oh, you can re-mortgage your house. How much mortgage have you got?'

"It all went quiet again and I was chasing and chasing for deeds and documents. And the next minute the liquidator was brought in and shut them down. They got off scot-free.

"When I first found out, I felt sick. And it took me a whole month before I told my wife what happened - to build up the courage to tell her."

Image copyright Getty Images
Image caption Investors were told the plots of land were close to Fortaleza in the north of Brazil

No arrests

The victims reported the matter to the police through the reporting unit Action Fraud. The City of London police shut down the company's UK website .

However, no arrests have been made, and both the City of London police and the Metropolitan police told the BBC they were not investigating the matter.

Mike paid £16,000 - his life savings - and never got his title deeds. When one victim did get his title deeds - the coordinates revealed that, far from being a piece of prime beach front property it was 250 square metres of scrub, more than two kilometres away from the beach - and two and a half hours' drive from Fortaleza.

The directors of Pantheon listed in companies house turn out to be Afghani refugees who were "stooge directors" - paid to be just directors. According to official sources they knew nothing about what was going on in the company.

The parent company of Pantheon, PR Group, is headquartered in St Vincent - making it difficult for authorities in the UK to determine who the real directors are.

Another company, Green Planet Investments Ltd, also used the Gherkin building to give itself an air of respectability. It too was shut down in the public interest at the end of last year. Between the two, separate operations, more than 600 investors have committed more than £19m.

Legal action

The victims are now turning to a lawyer who specialises in recovering money from landbanking schemes like this - Chris Corney of the solicitors Carter Lemon Camerons - to try to get their money back.

He plays down their chances: "If you can actually move in before anyone realises, if you can move in at that stage and say 'here's my freezing order' - hit the money while it's still in the accounts, then perhaps you have a chance of recovering something. It's not absolutely impossible even in the most desperate cases.

"But the fact is that if you set up one of these schemes then you know that it's likely at some point, you'll be rumbled. People who've set these up will have a plan ready for that stage, to make sure that their assets and the funds they've made from their activities, are sent round the world in the banking system."

The AIPP say they terminated Pantheon's membership as soon as they found out - and while they try to vet members with due diligence like checks on directors, in a giant industry like international property they can't stop companies operating as Pantheon did.

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