Essex London and Properties Limited (ELP), claimed to be a property investment Company has been shut down for mis-using almost £20 million of investors money.
More than 800 people in 18 months invested in the company allegedly purchasing properties to sell for a profit or to generate rental incomes. They also generated false Land Registry documents to trick investors into thinking they had a number of properties that had increased in value. In fact the company had only bought one property. The company was operating a so called 'Ponzi Scheme'.
What is a Ponzi Scheme?
A Ponzi scheme is a fraud where investors are tricked in to paying in to an ‘investment scheme’ and then those new funds are paid out as fake profits to earlier investors. The Ponzi scheme will fraudulently mis-guide investors into believing that profits they receive are coming from product/service sales or gains rather than new investor monies coming in. It is a vicious circle that will eventually collapse as you run out of new investors to cover ‘profits’ promised to existing investors that have been duped. It is so-called and named after Charles Ponzi who became famous for a huge scam in the 1920s.