Britons win case against Spanish developers

Fecha Publicación: 
8 Diciembre 2011

A British couple have successfully prosecuted a father and son team who defrauded expats of more than £3.5 million in an off-plan Spanish property scam  

The Telegraph | Noticia

Peter and Benjamin Schmidt were found guilty by an Alicante court of fraud, sentenced to two years in prison and ordered to repay the £50,000 deposit taken from Keith and Marilyn Brown in 2004.

A total of 60 people, mostly British, paid deposits in excess of £50,000 for property sold off-plan via the German father and son company Construciones Monte Puchol S.L.

Within the space of a year the expectant homeowners began to realise that building licenses had not and would not be granted to the Schmidts, who had illegally earmarked 'rustic' land on which to build the 60 properties.

It remains to be seen whether the decision will set a legal precedent and enable remaining victims, not just of the Schmidts, but of all fraudulent developers in Spain, to claw back their losses.

Despite the allegations of fraud and the evidence against the Schmidts, the Browns were required to fund the six-year legal action themselves – something that has left a bad taste in the mouth of Mr Brown, particularly as there is no guarantee that the Schmidts will actually pay back what they owe.

"In the UK, if a fraud is committed the police investigate the case and the Crown Prosecution Service pays the cost of the action," he said. "Here we have had to pay for everything ourselves.

"Many of the other victims of this scam lost everything and were unable to pay legal fees so just had to walk away. From meeting and talking to other people who were involved there has been an immense amount of heartache and distress caused. I wonder why the Spanish authorities do not provide a legal system that is responsive to the need for a quick legal remedy."

Mr Brown said that if it had happened in the UK, UK law would allow an action to sue the conveyancing lawyer directly for not checking the validity of the building licence. Under Spanish law they were unable to take that action.

"It is about time the Spanish authorities and lawmakers woke up to the fact that the delay in getting a fair and just outcome is seriously detrimental to the Spanish economy," he said.

Despite the positive result there is still the possibility of the Browns having to pay legal fees for an appeal hearing in Madrid and further fees for recovering their losses from the Schmidts and/or the lawyers from Javea.

"Our resolve continues to be tested but we intend to continue in our search for justice," said Mr Brown.

The Schmidts have been linked to a number of similarly bogus developments along the southern Spanish coastline during the early 2000 boom years of Spanish development and construction.

When it became clear to investors that their homes would never materialise, the Schmidts attempted to maintain the fraud by offering to transfer investors' interest to their other property developments in Sagra and Benidoleig.

At one stage the Browns were sent a cheque from the Schmidts to cover the airfare to visit one of their alternative developments, only for the cheque to bounce. After that, the Browns decided to instruct a new firm of lawyers to recover their deposit on the original development.

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