Land banking companies in UK found guilty of unlawful investment sales

James Maynard of Countrywide Land Holdings faces ban and £32m fine to FSA for unauthorised sales to UK consumers

The Financial Services Authority (FSA) found three land banking companies guilty of unlawfully selling plots of land to UK consumers, and imposed a ban and fines of £33m. Photograph: Clive Gee/PA

Jill Insley

guardian.co.uk, Wed 21 Mar 2012 11.55 GMT

Three land banking companies who sold plots of land unlawfully to UK consumers have been ordered to pay a total of £33m to the Financial Services Authority.

The high court ruled that James Kenneth Maynard, Countrywide Land Holdings Limited (Countrywide) and Plateau Development & Land Limited (Plateau) operated collective investment schemes without authorisation.

Maynard, who operated through the trading names Regional Land and Countrywide, has been banned for life from selling for business purposes in the UK, and has been ordered to pay just under £32m to the FSA. A bankruptcy order has also been made against Maynard, who is believed to be living in Northern Cyprus.

Plateau, which is now in liquidation, was instructed to pay £918,975, while the firm's director Wasim Minhas, has been ordered to pay £75,000.

However, the regulator has warned that victims are unlikely to get any of their money back. Although the FSA is trying to trace the funds paid by investors, it not yet identified any assets that would enable more than a small proportion of these payments to be made, and therefore it is unclear how much will ultimately be returned to investors.

Maynard, Countrywide and Plateau sold plots of land across the UK with the promise that investors would make a significant profit when the land obtained planning permission and was sold. Investors were also told by sales staff that Maynard, Countrywide and Plateau would apply for planning permission for the land or that they had corporate buyers lined up to purchase the sites.

In reality there was no intention to seek planning permission or help buyers sell their land and the plots were in locations unlikely to ever gain planning permission, such as areas of outstanding natural beauty.

The Guardian and Observer warned readers about the risks of investing in land banking as far back as 2006.

The FSA first obtained injunctions against Maynard and Countrywide in August 2010 to freeze assets and stop them from selling more land. But the regulator then discovered that Plateau had been set up subsequently to continue the business. It secured a similar injunction against Plateau in December 2010.

The FSA does not regulate the sale of land, but deemed that land banking amounted to a collective investment which does require its authorisation.

Because these schemes were unauthorised, their victims are not protected by the Financial Services Compensation Scheme.

Tracy McDermott, acting director of enforcement and financial crime at the FSA, said: "We have to be realistic about the low probability of securing meaningful compensation for victims of these scams, but this is still an important victory. Proving that a land bank is operating a collective investment scheme – and should therefore be FSA authorised – is very complicated, so every success puts us in a stronger position to tackle other schemes."

McDermott said the decision should send a clear message to other land banks.

"We have also started court actions against others that we believe have been involved in Maynard's scheme.

"Anybody investing in land should always have it independently valued to check its worth. Furthermore, if you are ever sold land as an investment with the promise of fabulous returns, and on the basis that someone else will manage it for you as part of a wider site, you should check the firm is authorised by us."

Anyone who believes that they may have been contacted by a land banking operation or any other unauthorised financial services provider can call the FSA's consumer helpline for guidance: 0845 606 1234. The regulator has produced a video explaining what land banks are which is available on the FSA website.

Sourced from here.

Tougher land fraud deterrence

Sourced from the Malay Mail

The Land and Mines Department is tightening up loose ends to give better protection for genuine land owners from fraudsters.

In an exclusive interview with The Malay Mail recently, the department's senior officials said the changes were part of their proposal to amend the National Land Code (NLC) 1965.

Land and Mines director-general Datuk Azemi Kassim said the Natural Resources and Environment Ministry was eager to see a new set of rules to better protect property owners from unscrupulous syndicates.

"We are aware of land scams in the country. We are now trying to minimise such scams and this can be done with an amended NLC."

He said the department was in the midst of consulting relevant parties before drawing up the final paperwork by year-end.

Upon getting the Cabinet's green light, the department hopes the proposal will be tabled in Parliament by the middle of next year.

Azemi said about 75 per cent of the NLC needed to be amended. Among the proposed changes are the introduction of the Certificate of Correctness as an additional document when transferring land to another person and to implement the biometric system to ensure authenticity of a seller's identity.

The Malay Mail had reported on syndicates obtaining original land titles by forging documents, such as identity cards, letter of undertaking and signatures, and selling the land without property owners' knowledge.

Our probe on fake document-producing syndicates was made following our July 26 expose on a land grab case in Shah Alam involving Datin Murnina Sujak, whose four plots of land in Bukit Jelutong was sold by an impostor without her knowledge.

In the case, a woman named "Elizabeth George" managed to execute the deal using a fake MyKad and driving licence that bore her face but Murnina's personal details.

Land offices need to subscribe to NRD online service

Our investigation led to the admission by Selangor Land Office assistant director Nazrul Shukri Ali that they did not have an infallible method to ensure land titles were granted to rightful owners.

He also admitted thumbprint scanners in the State land offices were offline as their system was not linked with the National Registration Department (NRD). This was clarified by the NRD in our Aug 2 report.

On this, Azemi said thumbprint scanners distributed to the land offices were in working order, just that some of them had not subscribed to the NRD's online service.

"NRD handed us 180 units of scanners which we handed to the states. To have real-time details of the persons intending to transfer land ownership, land offices need to subscribe to the NRD's online service.

"With the introduction of the biometrics system, states will have no choice but to go online."

He said biometrics were already being used at the Federal Territory Land Office and the Temerloh District Office in which RM97,000 was spent to introduce the system in the latter office.

He said the Petaling district office, and two offices in Perak and Kelantan would have the system in place by early November.

"The Perak Land Office held a meeting a few weeks ago and they plan to introduce a similar system at the Kampar and Teluk Intan district offices."

Azemi also stressed land grab scams had been gradually reduced over the years.

"We have had cases where several land officers were involved with syndicates, including in Perak and Selangor. In 2009, a clerk from the FT office was arrested. We have not heard of any other case since."

Meanwhile, Land and Mines Office research and development director Mohd Shukri Ismail said the Certificate of Correctness would ensure lawyers' responsibility when dealing with land and property transfers.

"It will be part of the memorandum of transfer document. We will also conduct checks on the law firm and lawyers dealing with us.

"It is something practised in New Zealand and we feel it is high time to introduce it here. But we would like to know the Bar Council's stand before introducing it."

Also present in our discussion with Azemi and Mohd Shukri in Putrajaya were land management and legislation director Kamaruddin Mohd Taib, computerised land management director Mohamed Kamil Mohamed and computerised land management deputy director Ruhaimi Che Jusoh.

Certificate of Correctness

ACCORDING to the "Registrar-General of Land, Information Paper 2000/01: The certificate of correctness under the Land Transfer Act" by BE Hayes, the Certificate of Correctness was first seen in the New Zealand land system in 1870.

Here, a lawyer (when a lawyer is acting) has to sign a Certificate of Correctness. To give this certificate, the lawyer must be satisfied (among other conditions) with the identity of the person who has signed the instrument.

Hayes had illustrated the Basis of the Practitioner's Certificate of Correctness. (see graph above)

The article "Identity Fraud" published on lawlink.co.nz, stated: "It is important for lawyers to check on the identity of new clients.

Lawyers also have an obligation to check on a client's identity under the Financial Transactions Reporting Act 1996 (which is aimed at detecting money laundering).

In the future, lawyers are therefore more likely to request clients to produce original identification, and may ask for a second document to confirm identification."

Changes to deter land scams

● SUBSCRIPTION to National Registration Department (NRD): State and district land offices are advised to subscribe to the online NRD services to check the details of parties involved in transactions.

● Upgrade computer land registration system to version 2.8.4: Thirty of the 101 land offices in the country use the new system. Among the features include a "push email" feature where, once a land is registered, a copy of the transaction will be emailed to the law firm. There are also better firewalls to avoid hacking.

● Bar codes on original land titles.

● Checks at counter: Experienced land officers will be placed at the counters to vet documents before  proceeding with transfer application.

● Cooperation with police: Police to conduct audit trails if required to help investigations. This will enable cops and the Land and Mines Department to pin point officers involved in the transaction.

● Advertisements: The Land and Mines Department, in collaboration with the National Film Department, have produced and aired several advertisements advising property owners to pay their assessment to encourage them to check their land ownership status.

● Data cleaning: About RM5 million was spent to clean the records and data system for several States including Negri Sembilan, Selangor, Pahang, Kuala Lumpur, Terengganu and Putrajaya.

This was done to ensure records were updated while irrelevant files were deleted from the system.

History of the NLC

THE National Land Code (NLC) 1965 is the highest law related to land matters in Peninsular Malaysia. The NLC does not apply to Sabah, Sarawak and Labuan.

The Acts embedded in the NLC, however, does not and cannot override any prior law or decisions made before the NLC was fully implemented.

Nevertheless, the NLC has come under fi re for failing to protect property owners from losing their properties through land scams.

In the Adorna Properties Sdn Bhd vs Boonsom Boonyanit case in 2001, the Federal Court protected the buyer of such properties, leaving the real owner with little recourse. This decision was overturned by the same court last year, plugging a loophole in the law and now allowing owners who lost their land to fraudsters to redeem their right to their property.

In 2007, the MCA Public Services And Complaints Department recorded 16 cases of land scams with a total worth of RM20 million.

SC urges public not to part with monies to unlicensed investment agents

The Securities Commission Malaysia (SC) urges the public not to part with monies to unlicensed investment agents, even if recommended by family members and friends.

In this regard, the SC wishes to remind the public that Uzir bin Abdul Samad, (IC No : 720824-01-5543) and UAS Bistari Management Sdn Bhd (806034-H) are not licensed by the SC to carry out any regulated activity including soliciting monies from the public for investment in securities.

The public is reminded to be wary of investment schemes promising unrealistically high returns. Where such schemes are purportedly linked to licensed intermediaries, investors are advised to verify the legitimacy of such schemes with the licensed intermediary concerned or with the SC.

We would like to remind the public that persons who are not licensed by the SC are not allowed to collect monies from others for investment in a portfolio of securities on their behalf. The public is also advised not to invest in the market through the trading accounts of others, including family members and friends. Individual trading accounts are for personal use of the account holder and may not be used for any third party trades.

Anyone carrying out such activities without the requisite licenses can be prosecuted under the Capital Markets and Services Act 2007 and upon conviction is liable to a fine not exceeding RM10,000,000 or to imprisonment for a term not exceeding 10 years or both.

Source: BizStar

Four directors plead not guilty to 796 money laundering charges

Source: The Star

KUALA LUMPUR: Three directors and a former director of gold investment scheme company Genneva Sdn Bhd pleaded not guilty Thursday to a total of 796 money laundering charges involving millions of ringgit.

Ng Poh Weng, 60, is facing 263 money laundering charges involving RM185 mil while Marcus Yee Yuen Seng, 58, faces 234 charges involving RM153mil.

Chin Wai Leong, 34, faces 210 charges involving RM212mil while Liew Chee Wah, 56, faces 89 charges involving RM31mil.

The four were alleged to have issued and cashed 364 cheques from illegal proceeds at a bank in Jalan Ampang here, between July 20, 2007 and Dec 6 last year.

According to a Bank Negara senior official, the cheques were used for various offences, including buying gold, payment to investors and remitting cash to their company's branches abroad. The official said RM20mil in cash and RM3mil in gold belonging to the Kuala Lumpur-based company have been frozen.

When the charges were read to the four in dock Thursday, they appeared composed.

DPP Mohd Haziq Razali applied to the court to set bail at RM4mil for each accused, saying the offences were non-bailable and involved a higher transaction.

Pleading for lower bail, lead counsel K.K. Wong, who acted for Ng, Yee and Chin, said his clients were willing to report to the Bank Negara investigating officer once a month pending disposal of the case.

Wong said since Bank Negara had also frozen their personal and company accounts, there was no risk of them fleeing the country.

"The company has business dealings in Singapore, Hong Kong and the Republic of China," he said, adding that if the accused could not post bail, it would result in the "death" of the three companies abroad and affect their 2,000 clients.

Lawyer Keppy Wong, who represented Liew, said his client had resigned from the post last March and has no previous convictions.

He said Liew had co-operated with Bank Negara since investigations started last year.

Sessions Court judge Rozana Ali Yusoff set bail at RM1mil in two sureties for Ng, Yee and Chin and allowed RM800,000 bail for Liew, saying that it was in view of the rampancy of such offences.

She ordered the four to surrender their passports.

The judge also allowed for a joint-trial and set Nov 16 for mention.

"Get-Rich-Quick" Scams in Malaysia

The Central Bank of Malaysia has created a useful FAQ section in their website that will greatly help create awareness of "get-rich-quick" scams that are victimising the Malaysian public:

1. What is a "Get-Rich-Quick" scheme?
   A plan which offers high or unrealistic rates of return for a small investmentwhile at the same time promising that such investment is easy and risk -free.
   
   The following "Get-Rich-Quick" schemes are prohibited under the legislation administered by Bank Negara Malaysia :
   

   Illegal Deposit Taking Activities
   
   Illegal deposit taking is an act of receiving, taking or accepting of deposits (moneys, precious metal, precious stone, any other article etc.) from members of the public that promises a repayment with interest or returns in money or money's worth without a valid licence under the Banking and Financial Institutions Act 1989 (BAFIA).
   

   Illegal Foreign Currency Dealings
   
   The following acts tantamount to illegal foreign currency dealings:

   • Buying or selling of foreign currency by a person who is not an authorized dealer unless such person has obtained the permission of the Controller of Foreign Exchange under the Exchange Control Act 1953 (ECA).
     
     
   • Buying or selling of foreign currency by a resident who is not an authorised dealer, with a person outside Malaysia except if the resident has obtained the permission of the Controller of Foreign Exchange under the ECA.
     
     

CAUTION: Internet Investment Schemes Members of the public are cautioned to be on guard against some investment schemes promoted on the internet as these schemes are not licensed or authorized by Bank Negara Malaysia to accept deposits or deal in foreign currency. Such schemes often come in the guise of attractive investment returns or opportunities involving unrealistic rates of returns withzero to low risk. Investors are reminded that they should only place deposits with institutions licensed or deal in foreign currency with institutions authorised by the Bank. Unlicensed operators may cease operating their business resulting in the investors with no means to recover their investments or seek redress against the persons connected with the scheme.




2. How To Spot The Scams?
   

   Illegal deposit taking scam

   • The person (an individual, a company or an organisation) receives, takes or accepts deposits from members of the public and is not licensed under section 6(4) of the BAFIA;
     
   • The person promises to repay the deposit, with or without interest or returns, over a period of time in the form of money or money's worth, etc.; and
     
   • The person promises to repay the initial deposit upon demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it, with any consideration in money or money's worth (the repayment of initial deposit is sometimes included in the fixed interest or returns promised).
     
     

Warning Signs for Investors • Illegal deposit taking activities have been disguised and camouflaged in various forms to deceive the public to fall victim to the investment scams, by giving valuable goods as part of the promised returns and camouflaging the deposits as loans to the company; • Illegal deposit taking activities appear to be able to provide high or unrealistic rates of interest or return over a short period of time as compared to licensed institutions. However, these schemes will not last long; • The survival of this scheme is dependent upon the recruitment of new depositors, i.e., new funds obtained will be used in paying dividends to the existing depositors. Therefore , the scheme will fail when there is no contribution of funds from new depositors; and • Initially the depositors may be paid their promised returns. However, the operator would eventually abscond with the moneys collected when he feels that the scheme is about to fail, thus leaving the depositors at the losing end.

Illegal foreign currency scam

Foreign currency dealings with a person, other than an authorized dealer, who has not obtained the permission of the Controller of Foreign Exchange under the ECA, often:

• Offer investors or members of the public the opportunity to deal in foreign currencies with a principal company (purported to have a valid licence to trade foreign currencies overseas);
  
• Facilitate the trading of foreign currencies by providing access to the principal company's website and trading facilities via internet;
  
• Recruit fresh graduates as marketing executives and allure them to get their family members to invest;
  
• Instruct the investors to deposit the investment moneys into either the principal company's bank account or a third party bank account; and
  
• Induce the investors to top up their investment ("margin call") or otherwise risk losing their investment.
  
  

Warning Signs For Investors Illegal operators of foreign currency scams will try to entice potential investors with a marketing strategy which promises quick and high returns - • By projecting a professional and reputable image with smart-looking employees, a high-tech office layout and advanced IT facilities where investors are induced to operate their accounts via the internet; • With tools of the trade, e.g., a news screen showing movements in exchange rates, to give the impression that a professional and legitimate business is being conducted; and • A business contract is usually entered into between the investors and the company. Such contracts are usually left unsigned by the company. This means no action can be taken by the investors against the company as there is no binding written contract.




3. How To Protect Yourself From The Scams?
   
   
• Remember the golden rule - if it sounds too good to be true, it's probably a lie;
• Deal only with licensed financial institutions and authorized dealers;
• Check with the relevant authority before investing;
• Don't be pressured or rushed to invest;
• Be extra careful with investments over the internet;
• Be skeptical of any investment opportunity that is not in writing; and
• In case an investment has been made, keep copies of all the investment and communications.
  
  
4. What Should You Do If You Are a Victim of such Scams?
   
   If you have any information pertaining to illegal deposit taking activities or illegal foreign currency dealings or are a victim of such activities or scams you can send details of such information or complaint together with the documents to Bank Negara Malaysia as follows:

Address:

Unit Penyiasatan Khas
Bank Negara Malaysia
Jalan Dato' Onn
50480 Kuala Lumpur
Fax: 03-26987467
E-mail: upkinfo@bnm.gov.my

Bank Negara can also be contacted at the following telephone numbers:

Tel.: 03-2691 5090 / 2698 4163 / 2691 0824 / 2692 6482 / 2694 2143