Case studies

Claims for victims of fraudulent mortgage broker’s Ponzi scheme

We have been acting for 21 victims of a Ponzi fraud scheme in which a fraudulent mortgage broker arranged that two firms of solicitors acting for the victims pay the balances of the clients’ mortgage loans secured by the fraudulent broker into an account under the broker’s control.

Having fraudulently obtained our clients’ money, the broker falsely suggested he had invested that money abroad at a high rate of interest return and had, from time to time, paid part of that return back. In fact, he was paying money to clients from new capital paid to the fraudster by new 'investors' rather than from interest earned by the fraudster. The broker then dishonestly misappropriated the money and is now in liquidation.

The claims against the former solicitors have been in professional negligence, breach of fiduciary duty and breach of trust. Our clients have sought to recover the sums totalling several million pounds paid away by their solicitors in the fraud together with additional losses they have suffered as a result.

In September 2013, the claims against one firm of solicitors settled at mediation on confidential terms. As a result of our involvement, our clients’ lives have been put back on track and they have been enabled to move on.

There are still seven sets of claims against the second firm ongoing in the High Court in London which are listed for trial in October 2014.

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Penningtons Manches Cooper LLP

Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales with registered number OC311575 and is authorised and regulated by the Solicitors Regulation Authority.

Penningtons Manches Cooper LLP