Five individuals who worked for lettings agencies Citiside and Flintons in London face lengthy jail terms after conning unsuspecting victims out of large sums of money.
The rogue letting agents were convicted of a total of 15 offences in November last year following a six-month trial at Southwark Crown Court prosecuted by Tower Hamlets Council.
This followed an investigation and operation by Tower Hamlets’ trading standards officers into rogue letting agents based within the borough. They were involved in numerous illegal and unfair letting practices, including: “bait and switch” advertising of rooms, placing misleading adverts on platforms such as Spareroom, failing to protect or refund tenants’ deposits, and issuing licences to occupy instead of assured shorthold tenancy agreements. This denied tenants their legal rights such as protection from eviction without a court order.
The letting agents particularly targeted workers or students who were new to the UK and therefore, unfamiliar with the rental market.
For years, the rogue letting agents would operate a vicious cycle: ceasing trading once they received complaints under one company and then starting up another company with a new name to continue their illegal practices. Throughout this, the same people were involved, and they mainly operated from the same location at 220 Bow Common Lane.
Prosecutor Richard Heller said yesterday that a web of companies raked in £18m while the fraud was in operation between 2016 and 2021, using at least 18,000 misleading adverts on Spareroom to lure in victims
He detailed to Southwark crown court the impact of the fraud on some of the victims, who had lost money and priceless possessions, as well as their homes, jobs, and emotional wellbeing.
“For many, it was their first experience of renting in London”, he said. “Some were placed in uninhabitable conditions and were rendered homeless.
“They faced spending money on hotels at short notice, renting alternative accommodation, and sleeping on friends’ sofas.”
Prosecutors presented victim impact statements from 29 victims in total, expressing the emotional strain and psychological damage of the fraud. But hundreds of people are said to have fallen victim to the scam, lured in by adverts featuring fake property photos, tricked into signing contracts and handing over deposits before viewing the homes, and then threatened with forcible and illegal evictions
Mohammed Moynul Haque was the “controlling mind” of the fraud, sitting at the head of lettings agent Citiside Properties Ltd until it was shut down following a barrage of complaints. He then set up another agency, Flintons, to carry on conning customers, and was also linked to a third rogue agency, Mayfields.
Haque was found guilty of four counts of fraudulent trading and two breaches of the Consumer Protection from Unfair Trading Regulations 2008. Haque, who had been charged on all eight counts on the indictment, operated several of the companies that were the vehicles for the fraudulent activity. Evidence showed substantial sums of money moving between his personal accounts, the companies, and other companies which he ran or had an interest in.
Haque’s then wife, Fatima Begum, was found guilty of one offence of fraudulent trading. Begum, was the director of Citiside Properties Ltd. and managed both Redbricks Estate Agents Ltd. (trading as Citiside Properties) and Flintons.
Gonzalo Gomez Egea, who was a manager of two of the businesses, was found guilty of two counts of fraudulent trading.
Razaur Rahman Oli and his company, Barrons London Ltd, were convicted of fraudulent trading and an offence under the Consumer Protection from Unfair Trading Regulations 2008 respectively.
Nozir Ahmed and his company, Roomshare Ltd, were convicted of two offences under the Consumer Protection from Unfair Trading Regulations 2008.
Judge Tony Baumgartner is expected to pass sentence on the defendants today.
Background of the case:
In 2017, the council began receiving complaints regarding unfair sales practices about Citiside Properties Ltd., a letting agency. Due to the numerous complaints, Mr. Haque of Citiside created a new company, called Flintons.
In February 2018, Flatsharing Ltd., trading as Flintons, became central to the prosecution case. The activities of its staff generated a large number of complaints by consumers to Action Fraud and the Citizens Advice Consumer Service. Frequent complaints were made to platform operators, like Spareroom, and to the Property Ombudsman. The business also attracted media attention nationwide.
In response, the council raided their offices and seized computers in August 2019. While Flintons ceased trading around February 2020, analysis from the raid revealed further links to other companies, including Barrons London Limited and Roomshare Ltd. (trading as Mayfields).
The trial began on 8 April 2024 and was supported by the National Trading Standards Tri Region Investigations Team. Around 40 complainants provided testimony either in writing, orally, or via videolink from overseas. SpareRoom.co.uk also gave extensive evidence regarding complaints made to them by users of their site about practices such as misleading advertising and failing to return holding deposits and the various efforts they made to address and combat such practices. Along with the oral and written evidence of complainants and officers, the evidence provided played an important part in securing a conviction.
Chanapol, an international student and a complainant in the case, said about the outcome: “I know what this means to all witnesses and this result will save many people who might be victims in the future, especially international students (like me), people in their first jobs, or people who try to find a proper place to stay. During those times, I suffered from poor mental health because I lost money, and I felt stupid, so that’s why I kept fighting for this even though it took many years to win. Thank you so much from the bottom of my heart.”
Ivann Schlosser, a complainant in the case, commented: “Hopefully this case will help improve the letting conditions for this segment of the market, where many vulnerable and young people find themselves coming to East London for studies, work and fun.”
The executive mayor of Tower Hamlets, Lutfur Rahman, remarked: “This verdict sends a clear message to rogue letting agents and landlords that we will not tolerate businesses putting residents at risk and flouting the laws. Letting agents and landlords have responsibilities to ensure the properties they rent are accurately advertised and follow all relevant laws. If they do not, the council will do whatever it takes to bring them to justice.
“I want to extend a sincere thank you to the complainants for bravely telling their stories to the court about how these companies impacted their lives.
“I’m grateful to National Trading Standards for their support, our barristers for their excellent work in prosecuting this case, and our excellent trading standards officers who worked tirelessly to bring this case to a successful conclusion.”
Lord Michael Bichard, Chair, National Trading Standards, said: “International workers and students who were new to the UK and unfamiliar with the rental market were deliberately exploited, leaving many out of pocket and trapped in a vicious cycle of contracts.
“I would like to thank the Trading Standards officers from Tower Hamlets Council and the National Trading Standards Tri Region Investigations Team who worked in partnership to secure these prosecutions, which should send a strong signal to others involved in similar criminal schemes that their underhand activities will not be tolerated.”
Matt Hutchinson, communications director at Spareroom, added: “The rental market has always had issues with rogue landlords, and worse. As the housing crisis deepens, it’s become even more of a problem, so it’s really important to see people being charged and convicted for these offences.
“At SpareRoom we put a huge amount of resource into staff and systems specifically to combat fraud and protect our users from rogue letting agents and landlords. We banned these advertisers from our platform for breaking our terms and conditions and we were pleased to have the opportunity to work closely with Trading Standards to make sure they were prosecuted. Moving home is such a stressful experience anyway, let alone if you’re young and new to the UK. Criminals like these don’t just take people’s money, they rob them of their confidence and their chance to start a new life.”
Read the orginal article: https://propertyindustryeye.com/rogue-letting-agents-face-jail-for-massive-fraud/
