Arrested solicitors struck off after SRA hearing

Dec 17 2009 by Sophie Doughty, The Journal

North East Property Buyers and Newcastle Home Loans became the subject of a major fraud probe earlier this year after police were alerted by the Financial Services Authority. Homes and offices connected to the Gateshead-based companies were searched in March.

It is alleged the two firms, which offered people suffering 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.

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

A total of 14 people have now been arrested and questioned by police in connection with the investigation.

The Journal understands these include Grace and David Purdie, of Darras Hall, who are directors of one of the companies, Grace Purdie’s business partner, Michael Foster, of Houghton-le- Spring, and several employees who worked for the companies. Mr Graham became a solicitor in 2001. He built-up his SFM Legal Services business from a base on Team Valley Trading Estate in Gateshead, and by 2007 it was enjoying sales of £4m and had 60 staff.

But he was suspended in October 2008 amid allegations of dishonesty.

The Journal understands Mr Graham has also been questioned by police over separate fraud allegations unrelated to the North East Property Buyers case.

On November 25, he was arrested on suspicion of fraud by false representation, and released on bail.

His home in Darras Hall and offices in Gateshead were searched following the arrest.