Second solicitor arrested in fraud probe

Nov 7 2009 by Sophie Doughty, The Journal

A SOLICITOR is today at the centre of a probe into what could be the country’s biggest ever property probe.

Malcolm Graham was yesterday arrested by detectives investigating the North East Property Buyers scandal, The Journal understands.

The 33-year-old, who ran SFM Legal Services from an office in the same block as the buy-to-let company, now at the centre of a major fraud probe, had already been suspended from practising law by the Solicitors Regulation Authority (SRA).

And the solicitor has now been questioned by officers from Northumbria Police’s Economic Crime Unit, in connection with investigation.

The Journal can now reveal that a solicitor arrested at her home in Whickham, Gateshead, on Thursday, in connection with the same investigation is Mr Graham’s former business partner, Wendy Gurr, 32.

The solicitors are suspected of being involved in a significant number of North East Property Buyers’ 2,000 mortgage applications under scrutiny. Both have been questioned and released on bail.

Det Sgt Phil Loveday, of the Economic Crime Unit, said: “Over the period we are looking at there were at least 2,000 mortgage applications and we suspect the people we have arrested appear to have been involved in a significant proportion of them.”

North East Property Buyers and Newcastle Home Loans became the subjects of a major fraud probe earlier this year after police were alerted by the Financial Service Authority (FSA).

Homes and offices connected to the Gateshead-based companies were searched in March and thousands of documents seized.

It is alleged the two firms, which offered 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 houses.

Tenants living in some of the 2,000 homes in the company’s portfolio have already been evicted after mortgage lenders repossessed properties.