UK investors hit by £19 million Brazilian property scam

UK investors hit by £19 million Brazilian property scam

UK investors hit by £19 million Brazilian property scam

It has being revealed that UK real estate investors were tricked into acquiring £10,000 property plots in Brazil only to find the land is worthless. A company by the name of Pantheon Realty Consultants is alleged to have promised the land would be developed as hotels and resorts leading to a 20% per year return for investors. The idea had been for investors to benefit from the ongoing World Cup tournament although it seems that many investors will have a battle to get their money back.

The company is alleged to have operated from a prestigious address in London which seems to have caught the attention of investors. Unfortunately, what you see is not always what you get and if a property deal looks too good to be true then the reality is it probably is.

What next for investors?

The UK investors, who are reported to have been scammed out of £19 million, have appointed solicitors to try and retrieve some of their investment. The company in question was placed into liquidation back in August 2013 and wound up in “the public interest”. Investors hope that at least some of the funds they invested can be clawed back from the individuals associated with the company.

Quote from PropertyForum.com : “Brazil is the leading economy in Latin America although the ongoing growth in the economy has not been as smooth as many had expected. There is massive inequality with regards to finances and cost of living which is impacting the property market. How do you expect real estate in Brazil to perform?”

Reports are also starting to filter through of aggressive marketing techniques, unachievable promises and a lack of title documents which would seem to have set alarm bells ringing for some investors. The idea that these properties would be developed in tandem with the Brazil World Cup, with plots being located in the vicinity of Brazil’s main stadiums, was a very clever and very cunning marketing technique. It seems that some investors were perhaps a little blinded by the forthcoming World Cup with a number of reports in the recent past suggesting there might be a property boom in Brazil.

Spotting the scams

It will be interesting to see if this particular company is able to repay at least part of the funds invested and whether indeed the individuals involved can be brought to court. The simple fact is that if an investment scheme, whether property or any other investment, looks too good to be true then it probably is too good to be true. While there will be times when special situations and high-risk investments can create above average returns, these are very few and far between and do require investors to take potentially excessive risks.

The fact that this particular investment company specialised in Brazil may well muddy the water a little bit with regards to legal redress and court action. However, when you bear in mind that there is potentially £19 million of “missing investment funds” involved, you would not blame furious investors for taking the company and individuals to the highest court in the land.

Conclusion

In some ways this particular scam took advantage of a perfect storm with regards to a buoyant Brazilian property market, the hosting of the World Cup and an array of reports suggesting there might be a property boom in Brazil. Unfortunately a large number of UK investors have now lost around £19 million and are now furiously attempting to at least claw back some of their lost investment through the courts.

Source: http://www.propertyforum.com/property-in-brazil/uk-investors-hit-by-19-million-brazilian-property-scam.html

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