Two men have become the first in Britain to be jailed for land banking fraud today after conning elderly and vulnerable people out of £3million.

 They conned people into buying plots of land that were either worthless or massively over-priced.

A string of fraudulent companies were set up and sold land bought cheaply across England or plots they did not even own.

The locations were marketed as being in a prime position for development and would quickly increase in value.

In reality, investors were putting their money into plots located on farmland, in the Green Belt, within an Area of Outstanding Natural Beauty or on the sides of hills, with no chance of gaining planning permission let alone building houses.

Some received small returns while others lost everything, with the duo funnelling off the funds into a network of bank accounts.

Read more: http://www.dailymail.co.uk/news/article-2244190/Two-men-Britain-jailed-land-banking-fraud-3m-deception.html

Source  Stat Counter   (but not the iSheep)

http://www.ambd.gov.bn/index.php/component/content/article/16-news/164-press-release-jardin-smith-international-b-sdn-bhd

The Autoriti Monetari Brunei Darussalam (AMBD) has issued a notice for the cessation of business activities to Jardin Smith International (B) Sdn Bhd. The notice is an immediate shutdown order with the view that the company is conducting business activities in contravention of Section 6(1) of the Mutual Funds Order, 2001, establishing or offering to the public or trading, managing or administering mutual funds without the necessary licences, an offence punishable with a fine not exceeding $200,000.00 or imprisonment for a term not exceeding 2 years or both.

Persons providing financial services or products in Brunei Darussalam are required to be appropriately licensed and regulated by AMBD to carry out activities regulated under the relevant legislations administered by AMBD.

The public is advised to deal only with persons that are regulated by AMBD. AMBD’s regulatory framework aims to safeguard the interests of investors by ensuring that only competent and qualified persons may provide financial services. Members of the public who choose to deal with unlicensed and unregulated persons offering financial services or products may potentially be depriving themselves of the protection afforded under the legislations administered by AMBD

Following the arrest of five people suspected of land banking scams the UK Daily Telegraph reports

The Financial Services Authority (FSA) has warned investors to be wary of property developers selling plots of land with the promises of riches to come.

This week, the FSA has arrested five individuals suspected of involvement in land banking by way of an unauthorised collective investment scheme.

Jonathan Phelan, the FSA’s head of unauthorised business, said: “The number of land-banking schemes being reported to us has been rising as more people discover they have invested in a plot of land in a greenbelt, nature conservation, agricultural, brownfield or other protected areas.

“Most of the money placed with these companies disappears and to make matters worse, as the firms are not authorised by the FSA, such investments are not covered by the Financial Services Compensation Scheme. As land banks often snare new investors by cold calling them, the lesson remains: if you are called out of the blue with the offer of land that is ‘guaranteed to rocket in price’ – be very suspicious indeed.”

Investors have lost an estimated £200m after investing in plots of land that turned out to be worthless.

More here :-http://www.telegraph.co.uk/finance/personalfinance/investing/8896678/Warning-to-investors-as-land-banking-scams-top-200m.html

Profitable Group was advertising estimated 250% returns within  3 years in  October 2008 on national TV in Singapore.  It is November 2011 which is 3 years and one month  and where are those returns  now we wonder ?   Some clues in the links below.  But it is fair to say a few searches on the Internet would have uncovered the problems with this investment.

Summary of Concorde Village site from 2007

Profitable Plots Concorde Village What do they know request from April 2009

Profitable Plots Prediction by UK Guardian June 2009

Concorde Village is absolutely not a scam say Profitable Group   Hounslow Chronicle August 2009

Green Belt housing scheme promoted by footballers leaves investors in the red.”Ad offering an estimated return of 250 per cent in three years, was aired for a short period in 2006… such advertising has long since been withdrawn !!”

UK Daily Telegraph Article from 2010

Profitable Plots were we right or what ?UK Guardian 2011

http://blogs.mirror.co.uk/investigations/2011/11/landbanking-the-sales-pitch.html

UK Landbanking: the sales pitch

http://www.dailymail.co.uk/news/article-2052932/Warning-landbanking-scams-investors-sold-worthless-plots-number-cases-double-years.html

Britons have been told to beware of  ‘landbanking’ scams after figures released today showed that they had doubled in just two years.

The details released by the Insolvency Service found that the scams, which see investors  sold worthless plots of land, had gone  up from 15 in 2009 to 30 this year.

The figures also showed that 67 per cent of  victims were aged over 50 and above, while 44 per cent were aged over 60.

Company investigations, which is the part of the Insolvency Service tasked with tackling poor company practice, said that since March 2007 it had wound up 50 landbanking companies which had cost their  victims £30m. It is estimated that losses from all
landbanking scams now exceed £200 million.

Landbanking companies buy a piece of land and
subdivide it into smaller plots, which they sell on to individual investors at
an inflated price.

However much of the land the companies sell  is protected from development without
planning permission under a blanket order known as an Article 4 Direction. In some cases, companies have been shown to  produce false land registration certificates and investors end up not owning the  land.

It can be very difficult to differentiate between a real land banking scheme and an investment scam.   UK Consumer watchdog Which? said: “We believe the
land banking model can never work.”

‘Dividing land into individually-owned plots  makes it less likely to be built upon, as no developer would want to deal with  hundreds of separate owners.

‘If the land investment company offers to  manage the land on investors’ behalf, it would constitute a collective  investment scheme which would require FSA registration. ‘Most land banking firms do not have this,  leaving investors with little protection if the company goes  bust.’

Jonathan Phelan, the head of unauthorised business at the Financial Services Authority warned consumers to be wary of cold calls offering the sale of land.

He said: ‘Most of the money placed with these companies disappears and to make matters worse, as the firms are not authorised  by the FSA, such investments are not covered by the Financial Services Compensation Scheme. 

‘As land banks often snare new investors by cold calling them, the lesson remains: if you are called out of the blue with  the offer of land that is “guaranteed to rocket in price” – be very suspicious indeed.’

Read more: http://www.dailymail.co.uk/news/article-2052932/Warning-landbanking-scams-investors-sold-worthless-plots-number-cases-double-years.html#ixzz1dDmixEVZ

http://www.bis.gov.uk/insolvency/Companies/What-is-landbanking/landbanking-case-study

This is the case study of someone who fell victim to a landbanking scam.

“I am a fool when it comes to investment. I could make money during the long periods of stock market growth, up to 2007, but not now: when the market can go down 3.5% in a day, and up again the next, stags take their profits and grasshoppers get crushed.

My father is 86. He too enjoyed the market’s growth, and began to think that those returns were his by right. I suspect he resents the fact that the market is not going up now as it did in 2005, with share values driven by demand for shares rather than by earnings potential of the companies. It perplexes him: life was so good then, why is it not as good now? And so he was caught by the landbanking scam.

The scam is all the more beguiling because it is based upon truth. If an investor can buy land in an area with potential, as demand increases there, the value of the investment goes up. And land increases in value when planning permission is granted. The Government consults on planning reform, and the potential effects of this are unclear to the casual reader of newspapers. The scam is so truthful that it might even be played without telling a direct lie: we have land without planning permission, we offer it to you for £16,000, we will apply for planning permission and pursue our application as energetically as we may through the appeal process if necessary. If planning permission is granted the plot is worth £32,000.

There is no lie here. The fraudster might even admit that there is a risk that permission may not be granted, but refer to the need for housing and the government’s warm words about building more. The sucker might think, but why should this man offer me a return of 100% in a few months? If there are such returns to be made, why does he not take them for himself? And my father, with less energy than he had at 80, a shorter concentration span, and a desire to leave more money to his descendants, did not think that.

The problem is that there is no reasonable chance of planning permission. The planning officer I spoke to said that while “green belt is not a technical planning term” (gosh, thank you for that interesting information) the plot my father had bought was “outside the development envelope”. As a new local plan had just been adopted, there was no chance of house building there in the next fifty years. Another planning officer told me, sounding genuinely distressed, that her planning authority had been aware of the scam for more than a year, and was shocked that the company was still in operation and making sales in Summer 2011.

I spoke to the fraudster briefly myself before I was aware of the problem. He sounded cultured and professional. I suspect he has a background in genuine investment advice. My father said he had an answer for every question. He found him persuasive.

My father’s repeated, anguished question is, “But how could he lie like that?” Well, there are sociopaths about, and perhaps a more normal human being could suppress the normal human revulsion at lying because of the potential gains.”

There is a post here promoting Jardin Smith. I often  respond to these posts but amazingly my responses get held for review while the pro JSI posts get posted.
So from this point forward I will respond here and link to the original article of concern.

Points made in article:-

Check out UK-based raw land investment options by Jardin Smith International. Jardin Smith International is a land investment company that buys greenbelt land in the UK, cuts it up into small plots and sells it to investors.

So far so good. An actual  line of truth .

Now, here’s the catch – UK land that lies in greenbelt area cannot be used for residential purposes unless and until the government rezones it (marks it okay for residential purposes). In normal circumstances, this factor may put people off. However, Jardin Smith retains 25% of the land as its own investment so that people buying the land are reassured that it will perform some acts that will help get the land rezoned.

Note the linking between  a negative fact and an incorrect positive opinion. Standard Land Banking behaviour. . JSI may or may not hold 25% of the land. A fact is they make margins of up to 10,000% on the land they sell so they can throw the 25% away if they want and still make a huge profit. They have not got any land re-zoned to date and the one site they made a speculative attempt on was roundly and completely rejected

One thing that I like about the company is that they were candid enough to inform me that the rezoning permission would take 5 to 10 years. So, if you are looking to make a quick buck, this is not it. This is the kind of honest and blunt advice that is appreciated. Once the permission comes in, the land price spirals and can go up to 10 times the purchase price! 10 times appreciation in 10 years makes for a return of 100% per year!

Not true. Or to put it another way complete bullshit. Greenbelt land cannot be developed without a change in local policy. At least two of the local authority areas where JSI hold land have made public statements that they will not look at developing any greenbelt land for a minimum of 20 years. Others say they have no plans to change policy in the forseeable future. Fact:  If the land cannot be developed  and you decide to sell on the  open market you  will most likely lose 90%-100% of your investment.

The reps at Jardin Smith convinced me that with cities getting crowded and houses getting cramped in UK cities, people were looking to move to the outskirts. They showed me statistics related to affordable housing leaving me with no doubt that the government is not doing enough to create more affordable homes and that sooner or later, the government will start marking greenbelt land as fit for residential use. Jardin was of the opinion that the 2012 Olympics will give a boost to the UK real estate market.

  What does the 2012 olympics have to do with the UK real estate market ?  80% of the UK is undeveloped. To avoid urban sprawl there are greenbelt protection policies. This is what keeps house prices high in cities . If those policies were relaxed and people can build anywhere then house prices will collapse. If the land cant be developed you lose. If the government gets rid of greenbelt policy you lose because now the builders can build anywhere.

Their land price statistics also convinced me about the investment potential. They wanted a 10% upfront (credit card swipe would have worked) and I was happy to know that UOB cardholders could pay the balance in interest-free 12 month installments. Well, though I am convinced about the investment potential and the people, I am yet to decide. Can someone help? Thanks.

My opinion is you are working for JSI. My opinion this is a lousy investment. My opinion you will lose most or all of your money if you hold this investment. 

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My unapproved  response below

Some UK land can be developed. Just not the land being offered by companies like Profitable Plots and Jardin Smith in Singapore. This is protected or green belt land. Greenbelt land has a very low value in the UK. It can only be used for agriculture or recreation. If it could be developed local UK developers would snap it up and hold it. Local UK residents know this, or can check with the local authority very easily. So these companies buy this land cheaply and sell in places like Singapore at very high profit by suggesting that it may be suitable for development in the near future. If you are checking on investment sites or blogs  you are not doing your dutiful checking. Check with the UK FSA, UK Land Registry, UK Local Authority or the UK police and press. The UK has launched a prosecution this year against a large land banking company offering green belt land under misleading circumstances. Hopefully the same thing will happen in Singapore soon.