Trio sentenced for £4.6 million mortgage fraud

Link to the original Mortgage Strategy article which reads as follows:

Three people, including a former police financial investigator were sentenced yesterday to almost ten years imprisonment in total for defrauding mortgage providers of £4.6m.

Charles Overend, a former police financial investigator, defrauded mortgage providers by hiding discounts he had received on the price of residential properties, tricking the lenders into providing loans that were proportionally much larger than normal for buy to rent houses.

He was assisted by Carrol Thompson and Jonathan Overend, his brother.

Stephen Rowland, reviewing lawyer for the CPS Central Fraud Group, says: “The sheer scale and effectiveness of this fraud were remarkable.

“Charles Overend and his associates bought 32 properties across the country between them, using £4.6m obtained dishonestly through mortgages. Lenders were eager to make the most of the property boom and Overend knew how to exploit them to turn himself into a property millionaire.

“This trio did not have the cash to get heavily involved in property, so they decided deception was the answer.”

Overend received a sentence of five years and six months for the mortgage fraud, plus a consecutive three month sentence for possessing a false identity document. His brother, Jonathan, was sentenced to one year of imprisonment.

Thompson was given a suspended sentence of 150 weeks and 200 hours of unpaid labour.

Rowland explained that the scam relied on Overend securing a substantial discount on the asking price of properties – one example was a discount of £89,900 in total on two properties in Wigan.

He then applied for mortgages for the asking price instead of the price actually agreed. Thompson, who was employed as a clerk for various solicitors’ firms as the fraud went on, assisted Overend by supplying false information to lenders or their agents on the agreed price for the properties.

Mortgages for buy to let properties were readily available at the time as lenders anticipated the interest due would be paid by the rent, but they would only loan up to 85% of the property’s value for its purchase. The undisclosed discounts allowed the defendants to secure loans worth more than 85% of the value of each property. A mortgage for properties in Harrogate was actually worth 107% of the agreed purchase price.

All three defendants pleaded guilty on 7 July 2010 at Southwark Crown Court. Their trial was scheduled to begin on 12 July.

Overend pleaded guilty to six counts of obtaining a money transfer by deception, the mortgage in relation to the purchase of properties in:

Hadleigh, Essex
Ossett, Yorkshire
Standish, Wigan
Chertsey, Surrey
Mayfair Court, Wakefield
Regent House, Harrogate

Thompson admitted three counts of conspiracy to defraud in relation to the purchase of properties in:

Regent House, Harrogate
St Andrews Road, Lytham St Annes
Whipcord Lane, Chester

Overend pleaded guilty to one count of obtaining a money transfer by deception for properties in Regent House, Harrogate.

Overend also pleaded guilty on 24 March 2010 to possession of a false identity document, which was found when he was arrested and his home searched on 11 March 2008.

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