The Property Block is promoted by Google Ads and promises an implausible 30% return after three years
Has a fraudster who was jailed for four years for a property investment scam resurfaced – at a property investment company?
Investors lost around £3million through Synergy Land Group, run by Samuel Exall from Orpington, Kent.
Victims were sold plots of greenfield sites, being told lies about how Synergy would get planning permission for development and the price would shoot up.
In fact, the small plots were effectively worthless and in 2016 Exall was jailed after admitting conspiracy to commit fraud.
After the trial, Detective Sergeant Marcus McInerney from the City of London Police, said that the 31-year-old and his co-defendants “caused intense misery for their victims” with their “nasty selling techniques”.
Now I’ve come across The Property Block, and its website features a chief operating officer called Sam – no surname is given.
A little bird tells me this is Samuel Exall, who’s out of prison, lost a bit of weight and had a hipster makeover. I’ve emailed “Sam” at The Property Block to ask if he’s the same person but had no reply.
Whether or not it is, I found some more nasty selling tactics at this company, which I came after doing something I would never advise any saver to do – searching online for investments. The first hits were Google Ads, notorious for promoting fraudulent websites, and the first of those was for propertyinvestment.shop.
This purported to be an investment comparison site: “Enter details to receive a tailored selection of investment opportunities that match your requirements”.
So I did just that, without revealing that I was a journalist, and received the message: “We have found 3 investments suitable for you”. But I was put in touch with only one company, The Property Block.
This is not surprising when you realise that a director of The Property Block, Alex Hagan, is also a director of New Creation SEO Ltd, which owns propertyinvestment.shop, and Samuel Exall also works there, according to his LinkedIn page. The Property Block and propertyinvestment.shop also share the same 0207 phone number.
I was then phoned by a sales rep for The Property Block, William Beavers, who said that I could get an impressive return of 7.5% annually on its convertible loan note, or an amazing 30% if I invested for three years. On maturity I could either recoup my capital plus interest or convert it into shares in the company – he said their were plans to float it on the stock exchange.
He explained that the business identified properties in areas with housing shortages, bought options to develop them, applied for planning permission and then sold the options to house builders at huge profits.
“An option contract costs £30,000 per site and the minimum we make from a site is £200,000,” he said.
“We are talking nearly ten times our money per deal.”
He also threw in references to the Financial Conduct Authority, presumably to give this some legitimacy.
“We work with the FCA in terms of the payment side of things, we work with a company called London Court that regulates the payments, so your deposit is 100% protected within the FCA,” he insisted.
I asked London Court about this and director Simon Kiero-Watson said that The Property Block had asked his company to carry out administrative work such as anti-money laundering checks on investors.
“Such services did not include holding or receiving investors’ subscriptions or in any way, shape or form making regulated payments including making interest payments on behalf of The Property Block,” he said.
“Furthermore, if the company in question had made such arrangements with an FCA regulated company it would still not make such an investment ‘100% safe’, we which believe to be a grossly misleading statement.
“I would like to make it clear that London Court had not activated such a facility to provide the AML (anti-money laundering) checks that would allow subscriptions to be received by The Property Block as we were still undertaking our suitable due diligence on the client.
“Needless to say London Court Limited no longer has a business relationship with The Property Block Limited, having given notice of termination with them for any and all administrative services as of today.”
Having referred to the FCA several times, I asked Mr Beavers directly if The Property Block was regulated by the watchdog. He admitted that it was not, saying: “We are a property developer so we fall outside the jurisdiction of the FCA, for the simple fact we are not a financial services company.”
Really?
It is advising members of the public on an investment opportunity and saying it will pay interest and then either repay the capital or let your convert it into shares in the company. Beavers’ opening words to me in our first call were: “You enquired about investment opportunities.”
Sounds a lot like a financial service to me.
Under FCA rules any company promoting this sort of high-risk or non-mainstream investment is supposed to check that potential investors are categorised as sophisticated or high net worth.
Beavers made no attempt to check my income beyond asking what I did for a living, and continued even after I told him I was unemployed after losing a job in catering.
He then declared that I counted as a “self-certified” suitable investor simply because I said that I had once had an ISA.
The FCA warned in September that unregulated firms were “coaching” inexperienced savers to self-certify themselves as sophisticated. The way Beavers skated through this vital topic without properly explaining it seems to be a clear example of what the FCA called “this unscrupulous behaviour”.
“Because we are working with the FCA one thing we do with every new investor is classify them,” Beavers told me, unaware that I work for the Mirror.
“I often find everyone falls into self-certified, which means you’ve had an investment with an unlisted company, which effectively means you’ve had a savings account or an ISA of something of that nature, it’s fair to say you tick that box.
“So you under the eyes of the FCA would be categorised as what’s called a self-certified investor, you’ll see a link in my email because one of the things we do with every new investor, because we are adhering to FCA guidelines, is categorising them as a specific type, whether it’s high net worth or self-certified, usually I find most people go into self-certified because of ISA investment or that sort of thing.”
I then received an email from someone called James Anderson at The Property Block. He’s not a director of this company, but was a director of New Creation SEO Ltd, which owns the supposedly neutral comparison site propertyinvestment.shop
His email began: “Many thanks for completing the self certification process.”
What process? All I’d had was a sales rep skim through the subject in a highly misleading way.
I put it to The Property Block that this made a mockery of the self-certifying procedure that is meant to protect the average saver from inappropriate investments but, like all my other questions, it went unanswered.