Gilbert Webb Estates Limited, a firm operating a land banking scheme that preyed on vulnerable members of the public, has been ordered into compulsory liquidation via winding up petition by the High Court following an Insolvency Service investigation.
The company, which was liquidated in the public interest, had been marketing residential-sized plots of undeveloped land at a site in Chestnut, Hertfordshire. This was a continuation of a scheme previously run by Complete Building Systems Ltd, which was also wound up in the High Court for mis-selling undeveloped land to the public and raising £3.3million in the process.
Gilbert Webb Estate is just one of a number of similar land banking companies whose affairs have been investigated by the Insolvency Service and brought to an end for ripping-off unsuspecting members of the public.
Misleading investors and making false claims
The Insolvency Service’s investigation revealed that targeted investors were duped into buying near-worthless plots of land with claims that they could expect short term gains of 200-400 percent. The company also explained that an investment in their land was more secure than ISAs, equities and pensions plans.
To add credibility to its investments, the company also told prospective investors that it was regulated by the Financial Conduct Authority (FCA). However, this could not have been further from the truth. In fact, in April 2013, the FCA published a warning about the firm, stating that it was providing financial services or products in the UK “without our authorisation”.
The investigation found that £959,000 of the £1.5million received from investors, which included recovering cancer sufferers and pensioners, was withdrawn in cash from the company’s account.
Fraudulent website claims
Gilbert Webb’s assertion that it was regulated by the FCA was the first of a litany of fraudulent claims to be made on the firm’s now defunct website. The website claimed that its land brokers were fully conversant with all aspects of land acquisition and development.
It said: “At Gilbert Webb Estates Ltd, we have gathered together over 100 years of collective experience in property acquisition, development and building together with our surveyors, architects and solicitors.
“We adhere to the same principals (sic) used by major developers and construction companies. The one golden rule is location, location, location.
“Our land brokers are fully conversant with all aspects of land acquisition and development. We identify and after much deliberation purchase sites that hit our exacting selection criteria.
“With a strong track record as a commodity with exceptionally high growth potential, analysts agree that strategically placed land should be included in every astute investor’s portfolio.”
Rotten companies that devastate lives
Commenting on the court’s decision to wind up Gilbert Webb, Chris Mayhew from the Insolvency Service, said: “This was a bare-faced scam aimed at pensioners who have lost out financially and otherwise, unlike those behind the insolvent company who peddled near worthless plots of land to the public for investment.
“Contrary to the company’s claims, the only collective expertise was the skill to part people from their money. The Insolvency Service has strong enforcement powers and we will not hesitate to use them to take action against rotten companies whose activities, as here, can devastate lives.”
Carl Ballard and Mark Tull have each been disqualified from acting as directors for their part in the £1.5million land banking scam. As a result of an undertaking given to the Secretary of State, the two directors will be banned for a period of 14 years, commencing on 10 and 22 July 2014 respectively.