The landbanking scam part 2

by Tony Levene on 10 February 2011  |  26 comments
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Following on from last week's blog post, Tony Levene reveals more about the scam that promises you big returns for investing in plots of land...

Last week I told you how Yorkshire lovemoney.com fan Billy McNaught handed over £60,000 to landbanker Commercial Land which promised him a speedy fortune when the tracts of farmland it sold him received planning permission for housing.

Then I recounted how Mr McNaught paid a further £100,000 to landbanker Property Partnership, based in Bishopgate, City of London. It said its land would make him a fortune.

Mr McNaught is taking Stephen Cleeve, owner of Commercial Land, whose promises have failed to deliver, to court. He is now penniless.

But his lack of cash did not stop Property Partnership from new demands including an audacious “pay £400,000” for a “Platinum Account” - something he had never heard of.

I now have a transcript of two phone calls to Mr McNaught by Property Partnership's Michael Baxter, who describes himself as “Director of the Floor”. Here are edited highlights from Mr Baxter's first call in December. There are some inconsistencies.

Baxter: William McNaught, you are the talk of the office. Sonny Morgan, the super broker that is, broker of the year last year, he has not stopped talking about you. He said you're obviously expecting quite a large return and that you are suing someone else as well. Is that Stephen Cleeve?

McNaught: Yes. Do you know him?

Baxter: I've no idea who he is. I've heard of him just because he's doing something with regard to land which was a bit of a rip-off. …...I wouldn't touch them with a bargepole. If I'd have known, you'd never have dealt with them. I wouldn't have let you. But either way, Mr Morgan has been able today to upgrade you to a Platinum Account.

McNaught: What?

Baxter: Funny thing is that every single broker here with a senior status has been allowed to choose one of their clients for a Platinum Account and Mr Morgan has chosen you. I've chosen an old friend and it's all moving forward. It seems you are quite under the market value for platinum – it's supposed to be £400,000 but he's been able to give you one for only £100,000. OK?

McNaught: What does it mean, sir?

Baxter: It means for another £100,000 you get the best account with the company. Now I don't know what liquid funds are like for you...

McNaught: None.

Baxter: It's the only way out. We're going to have to get you one. Land is a phenomenal investment. Royal Tunbridge Wells in the next 20 years, it's going to do so well.

McNaught: I won't be alive then. I'm nearly 75 and I'm still having to work.

Baxter: This level of account will literally be a godsend to you. When you get to this stage, it's not speculative, it's all very good. How long will it take you to get £100,000?

McNaught: What are you talking about. You already have £100,000 of mine. You're joking.

Baxter: No. I'm not joking at all. You're just going to have to keep with your account at the moment then. We need you to have the status of the platinum.....

Sonny Morgan was going to get you out of the market. But I think you upset him at some point so he was not able to. I think you were rude to him. Which is why he was trying to get you to platinum level. It was there for the taking but you were rude. £100,000 is the minimum but there's a chance to get it a bit lower. Maybe I could ask Mr Morgan. He's just been voted broker of the year.

Later

Baxter: If you are rude, people won't necessarily help you. Don't you dare try to give me a day to give you your money back. Without Sonny you would have no land.

McNaught: Without Sonny, I'd still have some money.

Baxter: You are obviously in the wrong investment. I'll upgrade you. I may be able to do this for 5, 10, 30, 100 grand.

McNaught: I'm already in contact with national newspapers.

Baxter: Well done, well done. What do you want? A medal?

McNaught: No. My money back.

In the second call in January, Baxter again tries to get £100,000. He also discusses 10 and 20% “fully refundable” deposits but does not say what they are for. He hints at a “Qatari” trade as the Qatars “are buying everything”. He ends up saying: “Don't waste my time. I'm in charge here. I can't help you without a deposit.”

Mr McNaught, who admits he was deceived by both landbankers, has now complained to the police.

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