Three sentenced following OFT criminal property fraud investigation

By Bridging Loan Directory 22nd July 2013

Following an OFT investigation and prosecution, three individuals have today been sentenced at Wolverhampton Crown Court for fraudulent property sales generating over £133,000 in illicit profit.

Thomas Francis Kelly was sentenced to six months’ imprisonment suspended for 12 months as well as a Community Supervision order for six months, to include 180 hours of unpaid work. Samantha Jayne Kelly was sentenced to a six-month supervision order and Andrew Stephen Butts was sentenced to a conditional discharge for 12 months.

The OFT was assisted with its criminal investigation and the subsequent successful prosecution by Connells estate agency and West Midlands Police. The OFT investigation was launched after Connells estate agency became aware of suspicious activity in their West Bromwich Office and reported their concerns to the OFT in late 2011.

Thomas Kelly was until June 2011 Branch Partner, managing the Connells’ West Bromwich office, and was convicted of Fraud Act 2006 offences in connection with a series of purchases of three repossessed homes which Connells was marketing. His wife Samantha Kelly assisted him in each of these frauds.

The third defendant, Andrew Butts, also worked as an estate agent in the Connells’s West Bromwich office and was convicted of a similar fraud in relation to another repossessed house.

Between April 2009 and May 2011, Thomas Kelly arranged for his wife to buy three repossessed houses, which were being marketed by his employer Connells. In each case, he did so without having declared his personal interest to the seller, enabling him and his wife to make a secret profit at the expense of his clients.

To disguise the fraud Thomas Kelly registered them on Connells’ internal systems under his wife’s name. He also hid the fact that she was the purchaser of these properties by overriding Connells’ internal audit processes, and by forging the signatures of other staff. Thomas and Samantha Kelly then arranged for a quick sale of the three houses, making a total profit of £98,550.

Following a tip off, the OFT investigated a further fraud and established that Andrew Butts acted as the estate agent for another repossessed home, which was bought by his brother-in-law in March 2010. Andrew Butts’ relationship with the purchaser was not declared to the seller. Following some minor cosmetic work, this property was sold four months later, in July 2010, making a profit of £34,500.

Another consequence of the fraud included an innocent Connells’ employee being arrested because his signature had been forged and his identity impersonated by Thomas Kelly trying to disguise his personal involvement in the house purchases.

Sentencing the individuals, Judge Dudley today said:

‘The bedrock principle of the estate agent profession is a safeguard that there should not be a conflict of interest and you have all breached that.’

Stephen Blake, OFT Head of Criminal Enforcement, said:

‘It’s vital the public can have confidence in the house buying market and that sellers can have confidence that the people entrusted to sell what will often be their most valuable asset will act in their best interests. The conduct of the convicted individuals in this case is particularly invidious, given that the properties in question had been repossessed. These prosecutions are a testament to how seriously the OFT takes this issue. Today’s sentences should stand as a deterrent to any other estate agent who may be tempted to engage in this kind of deception in the future.’

Elizabeth Brown, Divisional Managing Director for Connells, said:

‘We do not tolerate any wrongdoing from staff and are very pleased with the outcome of this case. After alerting the OFT to the fraudulent activity, Connells fully supported and assisted with the investigation. Although these are isolated incidents, we will always carry out an investigation should malpractice be suspected and will report anyone found behaving against industry codes of conduct or Connells own robust compliance policies to the appropriate authorities.’