£8m property investment scam revealed after firm goes into administration

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Investors lost more than £8 million in a care home property scheme after being duped by plans to build and convert 80 apartments near Bishop Auckland in County Durham.

CHF 9 Limited had traded as a vehicle to secure investment to build apartments and studios in a Grade II listed building and surrounding land, but it went into administration in December 2019.

The company’s insolvency triggered an investigation which discovered that CHF 9 bought the building and land for £850,000 but had been turned down for planning permission. The local council suggested 10-15 studios would be more appropriate.

Director Sean Murray (pictured, inset) continued to seek investment for the project, but further enquiries revealed that none of this money was paid into CHF 9’s bank account. Instead, more than £3.3 million was paid to a connected company and a further £2.8 million was paid to the company’s solicitors before £1 million was paid out of CHF 9’s accounts.

Murray has now been banned for 10 years after he did not dispute that he entered into 51 contracts with investors for care studios without planning permission, using the receipts to help fund a lavish lifestyle including travel by private charter plan and multiple luxury cars, the Evening Standard recently revealed.

Robert Clarke, chief investigator for the Insolvency Service, says it found that most of the investors wouldn’t have invested if they had known that CHF 9 didn’t have planning permission to build the care apartments.

“Sean Murray has rightfully been removed from the corporate arena for a significant amount of time,” he adds.

“This should serve as a stark warning for potential investors to do your due diligence, as well as making clear to directors involved in investment schemes that we have the powers to disqualify you from running limited companies.”

Read about other recent property investment scams.

View Full Article: £8m property investment scam revealed after firm goes into administration

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