{"id":94551,"date":"2021-06-09T09:03:09","date_gmt":"2021-06-09T08:03:09","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=94551"},"modified":"2021-06-10T11:47:48","modified_gmt":"2021-06-10T10:47:48","slug":"property-developer-banned","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/property-developer-banned\/94551\/","title":{"rendered":"Rogue developer handed 14 year ban for \u2018ponzi\u2019 property scheme"},"content":{"rendered":"

A property developer in Essex has been banned for 14 years after he promised investors substantial returns but instead operated a \u2018ponzi\u2019 property scheme<\/h2>\n

Mitchell Mallin was director of Essex and London Properties Limited. He targeted investors with the promise that their funds would be used to purchase derelict properties<\/a> in London and Essex before renovating them and selling them for a profit.<\/p>\n

Over 3 years, Essex and London Properties Limited gained more than \u00a313m in investments from investors. Hundreds of people invested in the company providing funds between \u00a35,000 to over \u00a3100,000.<\/p>\n

Only one property, however, was ever purchased for renovation and instead most of the investors\u2019 money was siphoned to overseas bank accounts.<\/p>\n

Insolvency Service investigation<\/h3>\n

The company was wound up in the public interest in September 2018\u00a0following an investigation by the Insolvency Service<\/a>.<\/p>\n

The investigation revealed that Mitchell Mallin\u2019s company had failed to invest the \u00a313m and used the funds provided by new investors to directly pay returns to previous investors.<\/p>\n

More than \u00a34.75m of unverified payments were also made to third parties. At the company\u2019s winding up, creditors were owed more than \u00a311m.<\/p>\n

On 11 March 2021, the secretary of state accepted a disqualification undertaking from Mitchell Mallin after he did not dispute that he caused or allowed Essex and London Properties Limited to trade with a lack of commercial probity.<\/p>\n

\u2018Dishonest and reckless director\u2019<\/h3>\n

Mitchell Mallin has been banned from acting as a director for 14 years which means he cannot, directly or indirectly become involved in the promotion, formation or management of a company.<\/p>\n

Neil North, chief investigator at the Insolvency Service, said: \u201cAs the period of disqualification reflects, obtaining funds from investors and using them in a dishonest manner is a serious matter and contrary to the conduct expected of a company director.<\/p>\n

\u201cCompanies have limited liability, which is a privilege, not a right and we have strong enforcement powers which we will not hesitate to use to remove that privilege from dishonest or reckless directors<\/a>.\u201d<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

A property developer in Essex has been banned for 14 years after he promised investors substantial returns but instead operated a \u2018ponzi\u2019 property scheme.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[304],"tags":[997,276,747],"stakeholder_rel_tag":[],"contributor_rel_tag":[],"class_list":{"0":"post-94551","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-planning-construction-news","7":"tag-development","8":"tag-government","9":"tag-property"},"acf":[],"yoast_head":"\nRogue developer handed 14 year ban for \u2018ponzi\u2019 property scheme<\/title>\n<meta name=\"description\" content=\"A property developer in Essex has been 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