Essex

Fraud inquiry after Essex firm collapses

Investigators have begun a fraud inquiry after the collapse of company which helped British soldiers serving abroad to get on the property ladder in the UK.

More than 300 troops, including some fighting in Afghanistan, have each lost thousands of pounds after Blue Forces Property Ltd went into liquidation with debts of more than £1m.

Essex Police told the BBC it had "received a complaint of fraud and theft against Blue Forces Property Ltd".

"The report was made by members of the Armed Forces. We are currently working with the insolvency practitioners to establish whether any criminal offences have taken place," said an Essex Police spokesman.

Army wife Carol Ingram, from Hertfordshire, said her family has lost £2,000, but she knew others who were missing up to £15,000.

"We have all been left in the lurch. Blue Forces said the whole property purchase would be stress-free, but it has been anything but stress-free," she said.

"We built up money to cover repairs and ground rent and as a bit of a nest egg.

Image caption The property firm Blue Forces owned homes in Colchester

"As far as we were concerned, Blue Forces were holding our money in a client account which we thought was protected, and you get that awful knot in the bottom of your stomach thinking 'we have lost that money'."

Liquidators said they were co-operating with the police investigation but are still trying to find out why there is a gap of more than £1m in the accounts.

Blue Forces Property, run by director Paul Smith, was set up eight years ago on Colchester Garrison property rented from the MoD.

It was exclusively for the forces and was even given a military phone number so soldiers on tours of duty abroad could get in touch more easily.

'Right old mess'

It helped soldiers to get a mortgage on buy-to-let flats, and handled all the lettings, rental and insurances.

Liquidator Nick O'Reilly said some soldiers appeared to have had their mortgages paid using money from other clients' rents.

"It is a right old mess at the moment and we are trying to get to the bottom of what happened," he said.

"We think there are somewhere between 300 and 320 soldiers involved. It is an enormously worrying time for a lot of them.

"There are some payments we have seen which we require further information about in terms of where the money has gone."

Paul Smith, who lives near Manningtree, was unavailable for comment. His wife told the BBC he was away on business.

A creditors committee meets next week to decide whether to distribute remaining assets of £200,000. The shortfall is expected to be around £1.1m.

Colchester MP Bob Russell said the Government had a moral obligation to reimburse the victims.

However, the Ministry of Defence said Blue Forces was a private company so it would not be reimbursing soldiers.

More on this story