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Two solicitors charged in £50m mortgage fraud

Two solicitors have today appeared at City of London Magistrates Court after being charged with offences in connection with a series of high value commercial mortgage frauds.

Mark Knights of Cheshire and Kamran Malik of Birmingham are charged with three counts of obtaining a money transfer by deception contrary to section 15A (1) Theft Act 1968.

The proceedings are to be transferred to Southwark Crown Court.

These proceedings relate to the same investigation where six individuals were charged in connection with the same offences in December 2009.

The investigation was referred to the Serious Fraud Office in March 2006 by West Midlands Police following a complaint from the Cheshire Building Society.

It is alleged that the defendants participated in a series of frauds whereby they dishonestly obtained loans from banks or building societies that were secured on six commercial investment properties.

Each property was transferred between companies controlled by one of the defendants and his associates at highly inflated prices in a series of back to back transactions. On the basis of the grossly inflated prices, fraudulent valuations and forged leases, the defendants applied for and obtained mortgage advances totalling nearly £50m. 

The mortgages were quickly defaulted on and the lenders suffered significant losses.

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  • Salil Chaudhari 21st February 2010 at 10:57 pm

    Maybe the Cheshire relied on valuations and accounts produced by professionals which later turned out to be fraudulent.I doubt if this would ever be repeated as more more stringent checks are now done on affordability and income.

  • Martin Jackso 19th February 2010 at 1:49 pm

    Brilliant post Glen!

  • Martin Jackson 19th February 2010 at 8:48 am

    suprise, suprise!

  • Glen McKeown 18th February 2010 at 9:35 pm

    Prima facie this is a case of fraud, and rightly brought to court to ensure that the evidence supports the allegation. Fraud has been with us for centuries, is deemed a serious breach of the law, so there is a defined and open process for dealing with it, with the defendants provided with significant rights with which to defend their position.
    These people would have been in worse trouble if they had merely contravened FSA regulations. They would have been subject to a Kangaroo Court, with the FSA being prosecutor, judge and sentencer. The defendants would have few options to defend themselves at first instance, and would automatically have been found guilty.
    The conclusion – transgressing FSA regulations is such a heinous crime that it warrants the suspension of civil liberties.
    Since the US are having problems shutting down Guantanamo, perhaps the FSA should apply to rent its facilities.

  • Martin Tapper 18th February 2010 at 9:32 pm

    Yes, we should all be vigilant against fraud and maybe the Cheshire may not have been adequately vigilant. It doesn’t detract that this was a noxious fraud and these guys deserve serious sanctions for what is a criminal act which degrades our whole industry.

  • Steve 18th February 2010 at 6:36 pm

    Pen pushers or never being out in the field is no excuse. These people deserve everything they get! Hopefully a nice long stretch.

  • Frank Jurga 18th February 2010 at 5:32 pm

    Should we really have that much sympathy. If it was my own money that I was lending, on large deals like that, I’d take the day off and go and have a look at the site myself and not trust ANYONE else. These lenders sometimes have pen pushers that make these decisions and people that have never been out in the field and people that can’t even check with Companies House to see if accounts are genuine. I wonder if these lenders even asked to see that personal bank statements for any of the applicants to see if that reality mirrored their supposed status.