Five questioned in North East Property Buyers fraud probe

Jun 13 2009 by Sophie Doughty, The Journal

DETECTIVES probing an alleged property fraud have questioned five people. Three women and two men were arrested at addresses in Newcastle and Washington in connection with allegations against Gateshead-based companies North East Property Buyers and Newcastle Home Loans.

The Journal understands them to include Grace and David Purdie, of Darras Hall, Northumberland, who are each a director of one of the companies, and Grace Purdie’s business partner, Michael Foster, of Houghton-le-Spring.

The women, 24, 46 and 51, and men, 51 and 36, have been questioned on suspicion of money laundering and conspiracy to defraud and released on bail.

All their financial assets have now been frozen.

It is alleged that the two Gateshead-based property firms, which offer people suffering from financial difficulties the chance to stay in their own homes by buying the properties and then renting them back to their former owners, defaulted on mortgages secured on the properties.

And many of the tenants living in some of the 2,000 homes in the companies’ portfolio have already been evicted after mortgage lenders repossessed homes.

The investigation, by Northumbria Police’s economic crime unit, is expected to last many more months.

But Det Chief Insp Jim McAll, said that, if proven, this could be the biggest property fraud the country has ever seen.

“What is alleged is a very serious and complex fraud,” he said. “If proven and if it is on the scale that is alleged it will probably be one of the biggest property frauds in the country. It is certainly the biggest one we have ever dealt with.

“We want to get to the end of the case as quickly as possible, but it is a massive case.”

North East Property Buyers and Newcastle Home Loans are understood to own around 2,000 properties across the North East, Humberside and Lancashire.