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Property investment director disqualified over £6.7m HMO scam

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  • 05/04/2022
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Property investment director disqualified over £6.7m HMO scam
The director of property investment firm, Kingsman Property, has been disqualified for 11 years after scamming investors out of £6.7m.

Sam Eustace, from London, set up the company in October 2015 before renaming it to Kingsman Property in May 2017. 

The firm promised to give landlords guaranteed rent all year round and the opportunity to receive annual returns of 30 per cent by investing into the house for multiple occupancy (HMO) sector. 

Instead, Kingsman Property operated like a Ponzi scheme, with the £3m paid out to existing investors between October 2016 and March 2019 coming from revenue generated by new investors.

When the firm went into liquidation in August 2019, it had defrauded at least £6.7m from investors. 

However, the firm’s accounts show it had been insolvent from June 2017 when it had debts of almost £700,000. These increased to £5m by the time it went into liquidation. 

Despite the company’s debts, Eustace paid himself dividends of nearly £400,000 between November 2017 and June 2019. 

The Secretary of State for Business, Energy and Industrial Strategy accepted a disqualification undertaking from Eustace after he admitted causing Kingsman Property to trade with a lack of commercial probity, including offering false representations as to returns on investments.  

His ban runs from 24 March 2022 and lasts for 11 years. This prevents him from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court. 

Martin Gitner, chief investigator at The Insolvency Service said: “Sam Eustace knew he was taking people’s hard-earned savings as part of a scam and has left countless people out of pocket. 

“The Insolvency Service will not hesitate to investigate and use its powers against those engage in this kind of fraud.” 

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