Suffolk fraudster handed suspended sentence for role in £13m 'Ponzi' scheme
- Credit: PA
A Suffolk man has been handed a suspended prison sentence for his role in a £13m 'Ponzi' scheme.
Jeffrey Razaq, 60, of Gunton Cliff, Lowestoft received a twelve-month suspended sentence at Southwark Crown Court on Tuesday, July 26, after being found guilty of conspiracy to commit fraud, conspiracy to launder and acquiring criminal property.
Razaq was part of a group of fraudsters who pocketed over £13 million after running a 'Ponzi' property scheme in Essex, one of the largest of its kind, and defrauded over 800 investors through their company 'Essex and London Properties Ltd'.
In 2015, a dormant property company was purchased and renamed Essex and London Properties Ltd (ELP).
It claimed to buy distressed properties along the new Cross Rail route, now called the Elizabeth Line, running from London to Essex, which would then be refurbished and re-sold at a profit.
In May 2017, Essex Police specialist fraud investigators began investigating ELP after an investor reported that he may have been the victim of fraud.
Investigators found that more than 800 people had already invested within the company.
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Each one had made payments ranging between £5,000 and £140,000.
Once the initial payment had been made, they had then been pressured to purchase increasingly larger stakes in the fraud using a high-pressure sales tactic known as a 'boiler room operation'.
The team running ELP used calculated campaigns to try and convince investors they were legitimate, including: playing a pre-recorded background noise during a cold call to suggest they were calling from a busy office; renting several offices in Kent and London where they would meet with investors to discuss the scheme; and creating a professional brochure using stolen photos of properties from estate agents, which also included 'recommended' solicitor details to suggest they were endorsed by firms.
False Land Registry documents alleging they had purchased properties in Chelmsford, Brentwood and Colchester were also created and records were uploaded on companies registers, which listed existing investors and added a degree of reassurance to those looking to invest.
ELP paid the initial interest of the first wave of investors to keep up appearances, not from returns on their investments but with the money transferred by new investors.
This is known as a Ponzi scheme.
Any remaining money would then be transferred overseas and into the accounts of other companies owned by the shareholders, who also received substantial sums into their own personal bank accounts.
Two of the fraudsters pocketed over £500,000 each and a third pocketed over £250,000.
In reality, ELP only ever purchased a single property in Harwich, for less than 1% of the overall money they collected.
Instead, investors' money was used to pay back those who invested earlier and to fund the lifestyle of those committing the fraud.
Within a month of Essex Police's investigation starting, a restraint order was issued through the courts to freeze ELP's assets.
In November 2018, it was ordered into liquidation by Her Majesty's High Court of Justice.
Mohammed Tanveer, 33, of Coventry Road, Ilford, Essex, who was involved in the running of ELP, was arrested at his home.
He was later charged and pleaded guilty to both conspiracy to commit fraud and conspiracy to launder the proceeds of fraud.
A further six men were charged as part of the investigation.
On Friday, April 22, 2022, after an 11-week trial at Southwark Crown Court and more than 34 hours of deliberations, four of the men were found guilty of conspiracy to commit fraud, conspiracy to launder and acquiring criminal property.
Two men were found not guilty.
On Tuesday, July 26, four of the men were sentenced at the same court.
Florian Pierini, 35, of no fixed abode, was sentenced to five years imprisonment and disqualified as a company director for five years.
Mohammed Tanveer, 33, of Coventry Road, Ilford, Essex, was jailed for five years.
Mohammad Hussain, 31, of Church Close, Kidlington, Oxfordshire, was sentenced to four-and-a-half years imprisonment and was disqualified as a company director for five years.
Jeffrey Razaq, 60, of Gunton Cliff, Lowestoft, Suffolk, received a 12-month suspended sentence for 12 months and ordered to complete 200 hours of unpaid work.
A fifth man is due to be sentenced on Friday, September 2.
Detective Constable Greig Avery, of Essex Police serious economic crime unit, said following the case: “A dedicated team of specialists including the insolvency service and HMRC have been assigned to this case over the past five years and have worked tirelessly to get justice for victims.
“I want to make it clear that these men went to exceptional lengths to add credibility to their enterprise.
“They used every tactic they could think of to pretend it was an established, legitimate company and shamelessly conned hundreds of investors out of millions of pounds.
“On one occasion, they even showed a potential investor around a property they were looking to ‘add to their portfolio’, which of course never happened.
“Funding a lavish lifestyle off of the hard earnings of other people is in my mind, a sickening crime and included an all-expenses paid trip to Dubai and hiring a private yacht.
“This was a sophisticated fraud which financially impacted a large number of victims and I’m incredibly proud that we’ve been able to stop them in their tracks and bring them to justice.”
ELP’s assets have been frozen and a confiscation hearing under the Proceeds of Crime Act will be held in the future.
It was also placed into liquidation as a result of a winding up petition in 2018.