Cruel trail of property cheats

Cruel trail of property cheats

HUNDREDS of investors have lost millions of pounds after being duped by a string of property companies that promised to make them rich. In the first of a special two-part investigation, Financial Mail unravels the web and examines the companies that conned the public.

Kieran Connolly has done well out of misusing other people’s money. He drives a Jaguar and the house he rents is a grand affair. The Department of Trade & Industry has linked Connolly, 48, to several companies involved in bogus property deals. His wife Elizabeth, 31, has been linked to three companies.

The bungalow next to Connolly’s in the Leicestershire hamlet of John O’Gaunt, near Melton Mowbray, is home to Philip and Tina Waterfall, who have connections with five of the eight companies investigated by the DTI.

In three years, hundreds of investors handed over thousands of pounds in membership fees and deposits, expecting to receive a portfolio of buy-to-let properties. Most ended up with nothing.

Financial Mail this week focuses on the four companies most closely connected to Connolly.

Quicksell

QUICKSELL Estates was founded in 2002 in Peterborough, Cambridgeshire, with Connolly and his wife as its two directors. For £46.94 a month, investors were offered options to buy investment properties. Reservation fees were charged on each deal.

Quicksell advertised for investors and recruited those who attended courses run by Turningpoint Seminars and Portfolios of Distinction. Philip Waterfall, 41, was a founding director of Portfolios. His wife Tina, 38, was company secretary.

Glen Lawrence paid £4,000 to attend a Turningpoint course in 2002. Glen, 53, from Castle Bromwich, West Midlands, is married to Yvonne, who has multiple sclerosis. ‘I wanted a job at home to spend time with her,’ he says.

Glen and Yvonne, 48, paid seven £1,000 deposits on different properties. Glen says: ‘Not one of the deals was completed and we found the developers had not heard of us.’ The Lawrences have not had a penny of their £7,000 back.

In spring 2003, Quicksell was put into liquidation and Connolly was declared bankrupt.

Mansion Investments

CONNOLLY was soon promoting opportunities through Mansion Investments with Ian Jamieson, pictured below, a financial adviser in Newcastle-under-Lyme, Staffordshire.

David and Louise Wilson were among the investors. David, who runs a car repair business, and Louise, 27, a financial controller, wanted to create a letting portfolio. David, 39, from Stoke-on-Trent, Staffordshire, says: ‘Connolly promised to get me £1m worth of property.’ To help the Wilsons raise a £31,725 membership fee, Jamieson arranged a remortgage of their home, releasing £50,000 of equity.

The couple paid £3,160 in deposits to reserve properties in Manchester and Swindon and two in Northern Ireland. But the deals fell through or were delayed. They completed on a flat in Hampshire for £229,000, only to discover that the developer was selling them for £15,000 less.

Mansion Investments was formed in 2002 with engineer Barry Frost, 68, as sole director. In August 2003, Richard Smith took over. Both Smith and Frost were registered as directors from an address in Streatham, south London. This property was sold three months ago and Financial Mail has been unable to trace them.

Sterling Mansion (UK)

CONNOLLY and Jamieson, meanwhile, were expanding through the similar-sounding Mansion Investments-UK), founded in July 2003 with Jamieson as sole director. Customers of Mansion Investments were not told of the switch.

Mansion Investments (UK) and Mansion Investments had virtually identical stationery, shared premises, staff and customers, and marketed the same properties. Yet when investor David Wilson asked for his money back, Jamieson claimed the two firms were not linked.

Mansion Investments (UK) changed its name to Sterling Mansion (UK). It claimed falsely to be regulated by the Financial Services Authority and to be a member of independent financial adviser trade association IFAP.

Jamieson paid himself £200,000 in just 18 months at Sterling Mansion. As a bankrupt, Connolly could not take a big salary, but unconventional payments and ‘loans’ benefited Connolly and his associates.

Sterling Mansion went into liquidation in March. At a meeting, the liquidator stunned creditors by detailing payments such as school fees for Connolly’s children and £40,000 to cover credit card bills. Regular payments were made to Seal Properties, run by Tina Waterfall. These ‘loans’ totalled £651,000. The company completed on only 14 property sales.

SMI (Overseas)

LATE last year, Connolly moved to Sterling Mansion International, trading from Stamford, Lincolnshire. The founding directors were Tina and Philip Waterfall and within weeks the company’s name had changed, first to SMI Limited and then to SMI (Overseas) Ltd. Investors who inquired about Sterling Mansion were sold into SMI. Though his name was not on the paperwork, Connolly was in charge.

A former employee said: ‘Kieran and Liz Connolly did the hiring and approved letters sent out. Tina Waterfall was Kieran’s PA.’

The Waterfalls quit in November, and two months later Tony Nunn emerged as a director. Nunn was connected to Sterling Mansion, arranging international mortgages. He argues that SMI, backed by a mystery company in Belize, should continue trading. But questions have been raised about the company’s deals in Turkey and Spain. The DTI wants the business closed.

Connolly: ‘I’ve not got much to say’

FINANCIAL Mail caught up with Kieran Connolly as he arrived home in his Jaguar saloon. He denies wrongdoing. ‘I’ve not got much to say,’ he told us. ‘I don’t want to go into details until I lay documents before the court that will clear my name.’

Financial Mail hand-delivered a list of questions to Tina and Philip Waterfall and to Tony Nunn at SMI’s offices. They did not respond. Ian Jamieson claimed to be ‘liaising with the DTI’, but refused to discuss his role or answer questions.

The High Court wound up Sterling Mansion and Mansion Investments this month. Three related companies were also wound up. Portfolios of Distinction, Turningpoint Seminars and SMI (Overseas) are contesting winding-up orders. Hearings are due next month.

Source: thisismoney