Asset Land persuaded investors to buy individual plots of land for between £7,500 and £24,000 – with the promise that the land would increase in value if it got planning permission or was re-zoned.
In reality, although investors were the legal owners of their individual plots of land, they had little or no control over their investment.
High Court ruling
The FCA won its initial case against Asset Land in the UK High Court in February 2013 while operating as the Financial Services Authority (FSA). At the time, the court found that David Banner-Eve, Start Cohen, Asset Land Investments and Asset L.I. ran an illegal land bank by operating a collective investment scheme (CIS) without authorisation – a decision later upheld by the Court of Appeal in April 2014.
In March 2013, the High Court ordered the scammers to pay £21m back to investors but the order was put on hold pending the Supreme Court’s decision.
The FCA said that Wednesday’s ruling means the fine can now be enforced, although the regulator warned it was “unlikely” that Asset Land and others will have the funds to pay.
The ruling is the latest in a streak of convictions pursued by the FCA against a number of illegal land banks and unauthorised collective investment schemes.
Eight men were charged by the regulator in April 2013 of running a similar illegal land bank using firms Plott, European Property Investments and Stirling Alexander and were found guilty of conning UK investor out of more than £5m.
In February 2014, Benjamin Wilson was sentenced to seven years in prison for defrauding investors out of more than £21m using fictitious investment firm SureInvestment – a Ponzi-style scheme used to fund his extravagant lifestyle.