Tip-off by NACFB leads to six arrests in fraud inquiry

07 December 2009 | By Natalie Thomas, Natalie Thomas

The National Association of Commercial Finance Brokers’ fraud committee has claimed its first victory after three men were for-mally charged with money laundering and conspiracy to defraud.

The Serious Fraud Office swooped on 19 properties across the UK last week as part of an investi-gation into suspected advance fee fraud and commercial rent fraud, and arrested six suspects.

The searches involved 70 personnel from the SFO and 40 officers from the City of London Police, the Derbyshire Constabulary and the Cheshire Police.

The case relates to a firm opera-ting as Gresham Ltd and Gresham Finance (London) Ltd which offered commercial loans of up to £250m.

Nikki Cann, director at the NACFB, says: “The firm is one that we tipped off the SFO about. This was one of the more serious cases and we have also submitted details of other firms to the SFO.”

Advance fee fraud is where the perpetrator promises services or goods and demands an upfront fee. The victim either never receives the service or has to pay a further fee to get what they have already paid for.

In this case applicants for loans were charged between £5,000 and £50,000 for a due diligence check. Most of the applications came from overseas for commercial projects such as developing resorts and building hotels.

Once an applicant had paid the due diligence fee there was a next-stage payment set at between 1% and 5% of the loan amount.

Out of the six suspects arrested three men appeared at Westminster Magistrates Court on December 3 and were charged with money laundering and conspiracy to defraud. The three remaining suspects were released without charge, with one released on conditional bail.

The men charged are due to appear at a plea hearing at Southwark Crown Court on February 2 2010.

The SFO has pointed out that Gresham Finance is an uncon-nected firm and is not under any investigation.