Ex-Bankia chief to be investigated

More bank corruption… where does it end?

A Spanish court has opened a fraud case against the former chief of state-rescued Bankia, and one-time IMF boss, Rodrigo Rato.

The lawsuit, brought by Union, Progreso y Democracia, a left-wing party, accuses Rato, amongst 33 others – including a former government minister and former Bankia chairman  – of fraud, price-fixing and falsifying accounts. Fernando Andreu, a judge at the National Court in Madrid, agreed to investigate the complaint.

The case will investigate the initial public offering of Bankia SA in July 2011, the restatement of its earnings that showed 2.79 billion euros of losses, and the states takeover and rescue of the bank with the injection of 23.5 billion euros of capital. Spain nationalised the parent company last week after experts appointed by the bank rescue fund said it had a negative value of 13.6 billion euros.

Under Spanish law, the accused could face jail sentences of up to six years but commentators said that while corporate corruption cases grab the headlines in Spain, “they rarely result in convictions.”

“It will be a long-running, complicated case,” said Pedro Schwartz, economics professor at San Pablo University in Madrid.

Bankia Chief Executive Francisco Verdu announced his resignation late yesterday after hearing about the case. Bankia declined to comment on the resignation or any possible replacement for Sr. Verdu.

The decision to proceed with the case was made public Wednesday but can still be appealed, the judge said in his ruling.

The ruling also said that while the facts of the case merit a criminal investigation, it is “not possible to establish in a concrete and definite way the level of responsibility” of each of the parties.

The Bankia group is the result of a merger of seven savings banks, including Caja Madrid and Bancaja. Since the IPO last year the shares of Bankia SA have lost three-quarters of their value.

So it isn’t just UK and US banks that are run by corrupt thieves.

Security deposit demanded from former employment minister

Former minister Antonio Ferández

The former Junta de Andalucía employment minister Antonio Fernández has been ordered to pay a security deposit of 807 million euros against any potential civil liabilities that may result in the event of him being found guilty.

The former minister is part of the scandal which allegedly involves millions of euros of fraud in the town halls concession of financial aid for laid-off employees.

The money paid will only be security against potential liabilities and will not serve as bail – Fernández will remain in prison where he has been remanded since April. Judge Mercedes Alaya believes he played a “principal roll” in the case and has indicted Fernández on charges of bribery, misuse of public funds and document fraud.

Sr Fernández is the first minister-level Junta official to be indicted in the case.

The payment is one of the largest ever requested and even dwarfs a previous deposit of 686 million euros which was demanded from the former director general of employment and social security, Francisco Javier Guerro, who was jailed on similar charges in March. In that case, the judge has also embargoed Sr Guerrero’s assets, including bank accounts.

Corrupt Casares Mayor released on bail

Former mayor Juan Sanchez

Ex-mayor of Casares Juan Sánchez has been released from prison after supporters raised 200,000 euros to bail him out.

The supporters and members of the public managed to raise the money in just three days meaning Sánchez was in custody for less than a fortnight.

Sánchez was arrested at his home in Manilva two weeks ago, along with his wife, in an joint operation between the National Police and Guardia Civil acting for the anti-corruption prosecutor.

In total eleven people have been implicated relating to charges of town planning corruption, fraud, money laundering and involvement with organised crime groups.

Juan Sánchez was mayor of Casares prior to becoming president of the association of town halls of the western Costa del Sol. He stepped down following last years elections and took up another mandate as the councillor for institutional relations and housing in Casares. He has since been suspended from his post.

The operation was codenamed ‘Majestic’ after the property developers that are alleged to be at the heart of the case. Allegedly, as mayor Sr Sánchez allowed the Majestic Group to build a large urbanisation at Casares Costa.

MacAnthony ordered to appear

MacAnthony will face charges

Following the ratification of the case against him in Marbella recently, millionaire football chairman Darragh MacAnthony, 35, has been ordered to appear in court in Spain next month.

The business man has been accused of taking money from home buyers for furniture packages that never arrived. The victims claim up to 600,000 euros was taken.

Over 40 plaintiffs attended court in Marbella in January to ratify the case in front of a judge who has now ordered the former owner of MacAnthony Realty International (MRI) to come to Spain to face the charges.

MacAnthony will not face the judge alone as his former chief executives Michael Liggan and Dominic Pickering are also being called to attend. The defendants could face up to eight years in jail if convicted.

The Peterborough United chairman handed the reigns of his real-estate company to 91 year old Fernando Arespacochaga, from Peru, in 2010. He too will be required to attend the proceedings.

The case will begin on April 25th.

Antonio Flores, from law firm Lawbird acting for the plaintiffs, says there are “many other” former clients of MRI who were affected by the companies business practices and this case covers just one of the irregularities found within the company.

Flores also said that there is another claim, totalling 15 million euros, that is currently being prepared on behalf of 200 MRI customers who claim they lost large deposits paid to the firm.

Community president makes a deal

It’s not only corrupt Spanish officials that home-owners have to beware of these days.

A British man, who was president of the Nerja Residents’ Association, allegedly defrauded its members out of as much as 200,000 euros, and has now made a deal with prosecutors.

The 52 year old was arrested in 2009 after the association denounced him after discrepancies were found in the income and expenditure accounts. He was due to appear in court next week to face two separate charges of aggravated embezzlement.

The prosecutor alleged that the money was taken from owners to carry out work on their properties, but the work was never done. The man also faces a charge of keeping community fees and payments for maintenance which he received from some owners.

The prosecutor was asking for him to receive five years in prison for the embezzlement charge, which he said was aggravated due to the length of time it continued, plus a further four year sentence for the continued fraud.

The residents’ association had also brought a private case against him, in which it demanded five years imprisonment for misappropriation of funds plus five years for fraud, and a further two years for falsification of documents. He has already served 16 months in prison.

It is now reported, however, that he has made a deal with the prosecution to accept a four year prison sentence for a continuing offence of fraud, plus a fine of 151,000 euros. The deal, which was agreed by his legal representative, and the residents’ association of which he was president, also prohibits him from holding any similar position for the same period. He must also pay court costs.

Darragh MacAnthony back in the dock

Darragh MacAnthony faces charges

A court hearing is due to take place in January 2012 which will see property millionaire and chairman of Peterborough FC, Darragh MacAnthony back in court once more. This time he will face 51 expats who accuse him of failing to deliver over half a million euros of furniture.

The victims, from Britain and Ireland, will give evidence against MacAnthony in an investigation that could lead to charges of fraud.

Lawyer Antonio Flores, who’s firm Lawbird is representing the claimants, said “The claimants have been ordered to come to Spain as the judge wants to depose them, together.”

“It is an exceptional request and a special room to fit them all is going to have to be arranged.

“This is bad news for MacAnthony,” the lawyer said, adding “The next step is to see if he wishes to settle.”

The claim was initially filed in June, in Madrid and accuses MacAnthony, 35, of retaining 600,000 euros which his company had received as payment for furniture packages for homes bought in Bulgaria, Turkey and Morocco.

Joining MacAnthony in court are MRI’s former cheif executives Michale Liggan and Dominic Pickering. Together they face charges  for ‘theft by swindle and misappropriation of funds’.

They all deny the charges.

Boiler room fraudsters sentanced

Marbella “boiler-rooms” have been springing up on the coast for many years. The plan is simple: setup an office, fit some phone lines, open the phone directory and start calling. Property, land, cars, stocks and much more have been touted by these criminals but time has been called for seven of these fraudsters.

Yesterday, a court in Ipswich, UK, sentenced staff and directors of Worldwide Bio Refineries to a total of 40 years in prison for their part in an £8m fraud.

The Spanish-based operation targeted investors in the UK using high pressure sales techniques to sell shares in the bio-diesel investment company.

Worldwide Bio Refineries was formed in 2003 by Dennis Potter, from Singapore, and Redmond “Ray” Charles Johnson. Potter received seven years for his part in the fraud. Johnson received three years after pleading guilty and assisting in the investigation. Both received a 12 year ban from acting as company directors.

Marbella based Steven Murphy and Greg Pearson both received six years imprisonment. Paul Murphy and Lee Homan, based in Hertfordshire, received six years and five and a half years respectively.

Londoner Peter Bibby is on the run and was tried and sentenced in his absence to six years imprisonment and a warrant was issued for his arrest.

WBR did have a processing plant in Co. Durham but produced no usable output and the company bank account reportedly contained a mere £20.

The presiding judge said “This was a well planned, sophisticated, and well executed fraud dressed up in the language of legitimate business.  It involved deliberate targeting of a particular group of investors.  The directors actions amount to a breach of trust of the investors. They had a long lasting effect on the victims who lost their savings.”

Viva Estates – promoting good quality?

I found this article on VivaEstates.com today:

http://www.vivaestates.com/blog/2011/09/24/costa-del-sol-real-estate-websites-or-tricks-of-the-trade-1/

It says how much they hate “so-called” real-estate agents who have a nice website but a small or non-existent office. They go on to say how “…you are being conned” by companies who use “…single landing pages that are also there simply to capture a client’s data”

What VivaEstates.com obviously don’t realise is that landing pages are a very good “white hat” way of capturing people’s data for marketing a product. Landing pages have been an essential part of online advertising for many years and I regularly use them myself.

The author, one Chris McCarthy, then goes on to criticise people who utilise Google AdWords to market their sites implying that this is a method used by “Instant” agencies. This is hilarious! Google Adwords should be an integral part of any online marketing campaign for any industry. This is especially true for real-estate in Spain. See for yourself, enter “real-estate spain” into Google and see what you get. I get 258,000,000 results – the competition is tough. Are Viva missing out? Something is obviously not working for them otherwise they would be thanking Google for all the traffic and saying what a good response they get from their email campaigns and landing pages.

A further section of this hilarious article entitled “Don’t stop at the Homepage or Property Search” tells you to find out about the company by reading their “About Us” page.

I agree that there are many agents who will try and rip you off. Some will even take the time to write articles criticising other agents’ methods 😉

I would agree that you need to check out any agent before handing any money over and my suggestions are as follows:

Search in Google for the agents name but add any of the following words:  scam, fraud, complaints, rip-off.

For example search in Google for “Viva Estates complaints” or “Viva Estates fraud” or “Viva Estates scam“. You’ll be amazed what you find considering the article they have just written!

You may also want to visit The Rip-Off Report to see what else these conscientious agents have been up to!

Having never worked at, or dealt with, Viva Estates in any way I am not able to criticise their business practices personally. I am however in a position to comment on their hypercritical article as I have lived in Spain for over 7 years and have worked in real-estate for the whole time. I am fully aware of all the scams and dodgy selling methods that were used by most of the agents on the coast, including Viva Estates, and many complaints were received and many upheld. It was rumoured that the rising number of complaints was one of the reasons that Viva Estates closed down only to re-open re-branded as Your Viva.

Just a shame they weren’t smart enough to change the domain name too as they still use vivaestates.com.

UK pressure group set up for victims of Spanish property fraud

UK residents who have fallen victim to Spanish property fraud have a new source of help due to the creation of a campaign group in the UK.

Similar groups already exist in Spain but this is the first group to be set-up in the UK. The aim of the group is to put pressure on the UK Government and MEPs to take action.

Thousands of Britons are thought to have bought property in Spain and due to unscrupulous dealings, banks, lawyers and the actions of various levels of Spanish government, now find themselves unable to enjoy their properties.

Chris and Angela Beattie set-up The Protection of Property Purchased in Europe (POPPIE). The husband and wife team have first hand experience of the issues that surround buying a Spanish property.

In 2004 they spent €150,000 on an off-plan villa in Andalucia that was supposed to back onto a golf course, hotel and villa complex. After more than 2 years delay in the construction the house was finally built, although the surrounding complex was not.

The developer had not received planning permission to build the properties and as such they remain unconnected to mains water and electricity supply making it impossible to sell the property.

“It is like camping in a house. We can’t sell it and don’t want to spend any more money on it because we don’t know what is going to happen to it.” said Mr Beattie adding “We bought in good faith and paid a lawyer to cary out all the necessary checks yet, like many UK citizens, have been caught up in the minefield of red tape, bureaucracy and arbitrary decisions that plague the Spanish property market.”

The Spanish government is about to begin phase 2 of its European property roadshow and hopes to promote Spain’s 700,000 unsold holiday homes to potential UK buyers.

On Hearing that the Spanish property roadshow is about to return to the UK, MEP Roger Helmer said: “I have approached Europe Minister David Lidington asking him to use his good offices to get this show cancelled, and to make it clear to the Spanish government that they will not be allowed to promote Spanish property in the UK until they can give firm guarantees that property rights will be respected and contracts will be enforceable.”

If you would like to join POPPIE, please email poppie.uk@gmail.com for more information.