Ian McGarry, a former chartered surveyor and director at Dunlop Haywards Lorenz, from Hertfordshire, and Saghir Ahmed Afzal, from Birmingham, were sentenced today at Southwark Crown Court to seven and 13 years’ imprisonment respectively.
In sentencing, Judge Beddoe said Afzal had headed up with his brother a “massive and carefully orchestrated confidence trick” over two years, conning Cheshire Building Society, Bank of Ireland, Société Générale and the Nationwide Building Society out of £50m.
Very little of the money has been recovered and Judge Beddoe said that the value of the fraud meant that the case was off the scale in terms of the sentencing guidelines for fraud cases.
He described McGarry as “vital” to the fraud, which could not have been orchestrated without him, and branded his involvement as motivated by “rampant greed”.
The long running investigation began in 2006 when an anonymous tip off brought it to the attention of the West Midlands Police. Due to the scale and complexity of the case, it was referred to the Serious Fraud Office (SFO).
Afzal and McGarry were charged along with six former solicitors in 2009, with Afzal and McGarry pleading guilty to all six charges against them prior to the trial beginning in January 2011.
Afzal and McGarry both pleaded guilty to two counts of conspiracy to obtain money transfers by deception and four counts of obtaining a money transfer by deception.
The fraud involved McGarry providing Afzal and his brother Nisar Ahmed Afzal with false valuations based on fictitious leases, which were used to support fraudulent mortgage applications on six commercial properties.
The false valuations enabled the Afzals to deceive lenders to loan £50m on properties worth £5.6m, equivalent to an LTV ratio of 866%.
In one case, McGarry valued a property at £19m that had been purchased for £1m, representing an overvaluation of 1800%.
In another instance, he produced three difference valuations of the same property on the same day, for three separate financial institutions.
The lengthy sentences were handed down for the fact Saghir Afzal personally benefited from the fraud and sent more than £26m to Pakistan, where it remains under the control of his brother.
For his part in the fraud, McGarry accepted bribes from the Afzal brothers totalling more than £1m, including luxury overseas holidays in Dubai, an Aston Martin car, cash in brown paper envelopes and the purchase of three properties in London.
The evidence before the court was that there was a close partnership between the Afzal brothers such that their roles in the fraud could not be distinguished.
Nisir Afzal is believed to be in Pakistan and is still wanted by the SFO for his role in the fraud.
The brothers were previously prosecuted for fraud by the SFO in 1996.
Of the six solicitors also tried for conducting the property transactions on behalf of the Afzals and McGarry, three were acquitted of the charges against them.
However, the jury were unable to reach a verdict in respect of the other three. Following the verdict, the SFO decided it was “not in the public interest” to seek a retrial of the remaining three defendents.
Richard Alderman, SFO director, said: “I am very pleased with the result; the principle defendants have received hefty sentences which reflect the seriousness of the offences.”
