Lawyers warn on prevalence of property fraud

Eversheds has warned that the lack of liquidity in the market will lead to more property frauds being uncovered. Following the arrest of six people by the Serious Fraud Office (SFO) last week after an investigation into suspected fraud in the commercial property market, Neill Blundell, partner and head of the firm’s fraud group, said: “This type of fraud has emerged following the onset of the recession, as property projects have collapsed through lack of liquidity. “I expect more frauds of this type to be uncovered in the future since it is unlikely that there will be a real improvement in the commercial property market for some time to come. “Lack of liquidity in the market place has led to all types of frauds being discovered. The SFO is now targeting those responsible,” he said. Last week, entrepreneur Edward Davenport appeared alongside solicitor David Martin Layard Horsfall, of Surrey, and company director Martin Peter Reilly, at City of London Magistrates’ Court, following his arrest by the SFO. Six suspects were arrested and 19 properties raided as part of a SFO investigation into a suspected commercial rent and advanced-fee fraud. Two of the suspects were released without charge and the sixth was released on unconditional bail, pending further inquiries, until 12 January. The arrests related to two companies trading as Gresham Ltd and Gresham Finance (London) Ltd, which offered commercial loans of up to £250m.