Landlords scammed out of £6.7m
A guaranteed rent boss has been disqualified as a director for 11 years after scamming £6.7million from investors.
From large fines to property based scams, there’s a lot landlords have to look out for and the latest scam hitting the news saw investors lose millions.
Rent Guarantee Insurance for £299
- ✓ Covered for £2,500 per month
- ✓ Claim up to £25,000
- ✓ Free access to legal advice
Kingsman Property Ltd promised landlords guaranteed rent and offered annual returns of 30% to those investing money into the HMO sector, while 36-year-old Sam Eustace was at the helm of the company.
An investigation by the Insolvency Service found that between October 2016 and March 2019, the company paid out more than £3million to investors. But the investigation revealed that, similar to a Ponzi scheme, this payout was funded by money received from new investors, rather than any actual returns on investments.
In May 2017 the company, which was originally set up in October 2015 as Samuel James Ltd, changed its name to Kingsman Property Ltd. The business was insolvent as early as June 2017, with debts totaling nearly £700,000, according to company accounts.
When it finally went into liquidation in August 2019, the deficit had grown exponentially, and the company owed nearly £5 million.
Landlords left out of pocket
According to Facebook, the Kingsman Property page says it is ‘led by a successful entrepreneur who combines his love of property with financial acumen…who is honest and trustworthy.’
But between November 2017 and June 2019 Eustace paid dividends of nearly £400,000 to himself from the company.
Following his disqualification, Eustace won’t be able to directly, or indirectly, become involved in the formation, management, or promotion of a company without the permission of the court.
Chief investigator at the Insolvency Service, Martin Gitner, said:
Sam Eustace knew he was taking people’s hard-earned savings as part of a scam and has left countless people out of pocket. The Insolvency Service will not hesitate to investigate and use its powers against those who engage in this kind of fraud.
As a landlord, the idea of guaranteed rent is a great one and Mashroom offers fantastic Rent Guarantee Insurance that pays out at the very first missed payment. We can also offer Deposit Replacement to give you more protection than a traditional deposit.
