Developer behind ‘ponzi’ business gets 14-year ban
A developer that secured more than £13m from hundreds of investors has been banned from running any company for 14 years.
Mitchell Mallin, director of Essex and London Properties, secured investments of between £5,000 and £100,000 from individuals, with the promise that funds would be used to refurbish old properties to be sold for a profit.
But the company only ever purchased one property, with the majority of funds siphoned to overseas bank accounts.
A developer that secured more than £13m from hundreds of investors has been banned from running any company for 14 years.
Mitchell Mallin, director of Essex and London Properties, secured investments of between £5,000 and £100,000 from individuals, with the promise that funds would be used to refurbish old properties to be sold for a profit.
But the company only ever purchased one property, with the majority of funds siphoned to overseas bank accounts.
An investigation by the Insolvency Service found that Mallin’s company had used new funds to pay returns to previous investors. More than £4.75m of unverified payments were also made to third parties.
The company was wound up in September 2018, with still £11m owed to creditors.
Mallin has now been banned from acting as a director for 14 years, meaning he cannot be involved in the promotion, formation or management of any company without the permission of the court.
Neil North, chief investigator at the Insolvency Service, said: “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.
“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.”
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