A fraudster property developer who promised investors comfy returns but instead used a £13m ‘ponzi’ property scheme has been slapped with a 14-year ban.
While transferring funds abroad, Chelmsford-based Mitchell Mallin targeted investors with the promise to do up dilapidated properties in the capital and Essex before selling them for a profit.
“As the period of disqualification reflects, obtaining funds from investors and using them in a dishonest manner is a serious matter and contrary to the conduct expected of a company director,” chief investigator at the Insolvency Service, which led Mallin’s investigation, Neil North said.
“Companies have limited liability, which is a privilege, not a right and we have strong enforcement powers which we will not hesitate to use to remove that privilege from dishonest or reckless directors.”
The 34-year-old was director of Essex and London Properties Limited, which over three years raked in more than £13m in funds from fooled investors.
Only one property was ever purchased for renovation, the government’s Insolvency Service found, while most of the investors’ cash was siphoned into foreign bank accounts.
Hundreds of people invested in the company, offering funds between £5,000 to over £100,000.
Mallin’s 14-year ban means he now cannot be involved, directly or indirectly, in the directing, management, promotion or formation of any company.
The Insolvency Service began investigating the rogue property developer in 2018, which discovered the uninvested £13m alongside over £4.75m of unverified payments made to third parties.
While winding up Essex and London Properties, creditors were owed more than £11m.