Tower Hamlets (Parliament Politics Magazine) – Court hears of £18m rogue lettings scam in Tower Hamlets, leaving victims homeless, and jobless. This fraud was exposed, with rogue estate agents facing jail.
According to reports, hundreds of people were duped into signing contracts and paying deposits before seeing the homes after being enticed by advertisements with phony property photographs.
They were then threatened with coercive and unlawful evictions.
The “controlling mind” behind the scam was Mohammed Moynul Haque, who oversaw Citiside Properties Ltd., a lettings agency, until it was shut down after many complaints.
He was subsequently connected to a third rogue agency, Mayfields, and founded another, Flintons, to continue defrauding clients.
Students and others who were new to the UK and London were specifically targeted, according to prosecutors at Tower Hamlets Council, because they would not be familiar with the customs of the rental market.
According to prosecutor Richard Heller, the network of businesses made £18 million between 2016 and 2021, luring victims with at least 18,000 deceptive advertisements on Spareroom.co.uk.
He explained to the Southwark Crown Court how the scam affected some of the victims, who lost their houses, jobs, emotional health, and valuable belongings.
“For many, it was their first experience of renting in London”,
he said.
“Some were placed in uninhabitable conditions and were rendered homeless.
They faced spending money on hotels at short notice, renting alternative accommodation, and sleeping on friends’ sofas.”
According to Mr. Heller, the perpetrators of the scam “systematically exploited the vulnerable, subjecting them to dishonesty at every stage of the letting process,” used “ripped from other properties” images for deceptive online advertisements, and told an “array of lies to part them from their money.”
Some victims were denied their legal rights by being given “licences to occupy” rather than assured shorthold tenancy agreements, while others discovered that the actual locations of the properties they were being offered were concealed.
They were also misled about not being able to visit the homes before being coerced into signing up and paying deposits.
“These were acts of false representation committed on a massive scale, committed against hundreds and hundreds of people”,
said Mr Heller.
Gibril Saine, one of the victims, testified in court that he was unable to enroll in a college course as a result of the scam and had to use his overdraft facility to cover the cost of a bed and breakfast.
“Their actions had left me homeless, cheated, out of pocket, on to the cold streets”,
he said.
“I lost out on the college course I’d signed up to since I had no fixed abode to live. A lost year that was having to start from square one. You can’t put a cash value on such a loss.”
When fashion worker Julius Agyei got home, he discovered that his belongings were gone and that his bedroom’s locks had been changed.
“I was working on a few projects with upcoming brands and since I couldn’t shoot the garments, it ruined relationships”,
he said.
“They’ve taken a lot from me, also things that mean so much to me. I lost my best friend in 2016 – there was a picture of me and her framed. It was a gift I received on my 25th birthday. It meant the world to me and it has now been taken.”
Nicolae Cristinel-Stan also fell victim to an unlawful eviction, and recalls the “devastating” day he arrived home to find he had been turfed out.
“We had no prior warning, and we arrived to find our belongings gone and our room emptied”, he said.
“This was an incredibly traumatic experience, as we were left feeling violated and homeless.
We had no idea where to turn for help, and the situation was made worse by the callousness of those involved.”
He added:
“I was pushed around and verbally harassed by the individuals from the agency, I was treated with disrespect and cruelty, and I could not fathom that such actions were allowed to happen.
He added that this situation created a deep sense of insecurity and frustration that continues to affect him today.
After becoming a victim of the scam, Adrian-Cristian Nicolescu, a PhD candidate at University College London, said he had to borrow money from his parents and a friend in Romania.
He said that he had to use all the money that I had and restrict my spending, disrespecting even my strict necessities. He could not obtain my plane ticket, being forced to spend my Christmas in London, alone.
They treated him like a stray dog.
Christina Clarissa Allan told the court she used some of her mother’s inheritance money after the death of her grandmother to pay the deposit, when she was a student and struggling financially.
The guilt this has caused me is unmeasurable. She lost £1,036.66 putting a deposit and paying some rent up front.
Ms Allan said she felt “on top of the world” when starting a new life in London, but dealing with Flintons and ultimately losing her home was crushing.
“The experience put me off living in London and therefore my life’s goal was gone along with my ambition”,
she said.
Yan Liu had just submitted her PhD when she was swindled, and said she was “given a run around” by Egea when she tried to regain a deposit she had paid.
“I gave trust repeatedly to people who did not even bat an eyelid when lying to me and taking financial advantage of me”,
she said.
“Of course I was seen as one of the easy targets too, as I was trusting, and vulnerable.
“I put myself under a lot of financial pressure, and effectively spent all my savings by the time I started working in September 2018. It’s hard to assess the emotional damage from falling victim to a fraud, as I’m a relatively resilient person and I believe in justice. However, it does make me feel insecure in this country where things like this could happen in the open air and for years without being caught.”
Emma Welch found herself living in an ant and mouse-infested property, which led her to lose her job, pile up debts, and have to eventually seek temporary accommodation.
By persistently bothering him with unexpected house calls, “entering my room whenever they felt like it, providing my access code to my room to any person they wanted, and being aggressively rude when I spoke with them on the telephone or went to their offices,” Joseph Cutts claimed Flintons “made my life hell.”
“Several times I have contemplated suicide as I felt like I was drowning with what they was putting on me, accusing me of, making me pay”, he added.
“They continuously lied to me about things which has made me cautious to ever do business with a company again.”
The emotional toll and psychological harm caused by the deception were conveyed by the prosecutors through victim impact statements from a total of 29 victims. However, Mr. Heller stated that hundreds of people are thought to have died.
Following a six-month trial, Haque, 46, was found guilty on four charges of fraudulent trading and two violations of the 2008 Consumer Protection from Unfair Trading Regulations. According to Mr. Heller, he “occupied the most senior position in the hierarchy” and had engaged in both instigating illegal evictions and purchasing phony favorable ratings for Flintons.
The court heard that Haque’s former wife, Fatima Begum, was convicted of fraudulent trading while serving as Citiside’s sole director and office manager.
The jury found 42-year-old Gonzalo Gomez Egea, the general manager of Citiside and Flintons, guilty of two counts of fraudulent trading.
In addition to creating a document called “Surviving SpareRoom,” which was given to new agents to create the appearance that attempts were being taken to eradicate dishonest activities, the court heard that he was involved in deceiving Spareroom.co.uk as complaints began to pour in.
He is a Spanish national, the court heard, and he had kept his family in the dark about the case against him until the guilty verdicts were delivered.
Razaur Rahman Oli was found guilty of fraudulent trading and violating the Consumer Protection from Unfair Trading Regulations of 2008 due to his involvement in the same scam at his lettings agency, Barron’s London Ltd.
The court heard that Barrons is still in business, and Oli has experienced a heart attack and a stroke since the case began.
A fifth defendant, 55-year-old Nozir Ahmed, and his business, Roomshare Ltd., which operates under the name Mayfields, were found guilty of two violations of the 2008 Consumer Protection from Unfair Trading Regulations.
Following concerns regarding Citiside in 2017, the investigation that finally resulted in the prosecution got underway. The next year saw the establishment of Flintons, which also became the subject of complaints to the Property Ombudsman, Citizens Advice, Action Fraud, and Spareroom.co.uk.
In August 2019, Tower Hamlets Council conducted a search on the offices and confiscated laptops that contained data that was crucial to the case. Although Flintons stopped doing business in February 2020, Barrons London Limited and Mayfields were implicated in the scheme and continued to operate.
With assistance from the National Trading Standards Tri Region Investigations Team, the Tower Hamlets Council’s trading standards officers looked into the situation. After six months, the trial was over, and sentencing was scheduled.
The convictions emphasize that such actions will not be accepted and serve as a signal to other rogue agents and landlords. The example emphasizes how crucial it is to safeguard those who are most at risk in the renta
The convictions are “really important” to demonstrate that action was taken, according to communications director Matt Hutchinson, while Spareroom stated that the scam had eroded users’ trust in the platform.
“At SpareRoom we put a huge amount of resources into staff and systems specifically to combat fraud and protect our users from rogue letting agents and landlords.
We banned these advertisers from our platform for breaking our terms and conditions and we were pleased to have the opportunity to work closely with Trading Standards to make sure they were prosecuted.
Moving home is such a stressful experience anyway, let alone if you’re young and new to the UK. Criminals like these don’t just take people’s money, they rob them of their confidence and their chance to start a new life.”
On Tuesday, Judge Tony Baumgartner is anticipated to sentence the defendants.
Defense attorneys have argued that the evaluation should be restricted to the projected £70,000 damages from known victims who testified during the trial, but prosecutors are pressing him to base the assessment on the companies’ whole £18 million sales.
What are the key highlights of this fraud case?
A total of 15 offenses pertaining to fraudulent trading and violations of the 2008 Consumer Protection from Unfair Trading Regulations were found to have been committed by five people and two businesses.
Mohammed Moynul Haque was convicted of two violations of these rules and four charges of fraudulent trading.
In addition to issuing permits to occupy rather than guaranteed shorthold tenancy agreements, the rogue agents participated in “bait and switch” advertising, posted deceptive advertisements on websites such as Spareroom, and neglected to protect or reimburse tenants’ deposits.
Tenants’ legal rights, including the prohibition on being evicted without a court order, were violated by these actions.
The agents deliberately targeted young, vulnerable people who were new to the UK and had little experience with the rental market, such as students and foreign workers. Many victims had mental health problems as a result of this exploitation.