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Buyer-funded developments equal fraud

Paul Hodgson | April 3, 2018

In just one example of a buyer-funded development gone wrong, property company North Point Global sold a set of developments in the city of Liverpool with an estimated worth of £360 million (U.S.$506M) to foreign investors. According to comprehensive reporting by the Guardian newspaper—which is the subject of a legal complaint by Liverpool City Councilor Gary Millar, who has been intimately involved in the scheme—the company has “pulled out of its planned suite of projects across the city and stopped picking up the phone, leaving buyers to believe they are the victims of a ruthless scam.” The properties were marketed to investors in China and Hong Kong with promises of high yields. In one example, a Hong Kong investor was convinced to pay 80 percent of the price of a student accommodation upfront, with promises of 6 percent interest on the deposit, and a guaranteed 9 percent return in rental income. Later, buyers received requests for further funds to complete the building...

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