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Ghost homes: 200 buyers lose €3million in Majorca's biggest real estate scam

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Ghost homes: 200 buyers lose €3million in Majorca's biggest real estate scam
Photos: AFP
10:14 CEST+02:00
Scores of budding homeowners on Spain's biggest Balearic island have been defrauded out of their life savings after putting forward money for apartments that were never built or never existed.

On paper, real estate group Mallorca Investments offered clients the chance to buy apartments through local developer Lujo Casa for a price below the market average.

Budding homeowners would then give an advance of at least 10 percent of the property price to the developer in order to supposedly tie down one of the apartments before it was built. 

The new proprietors would even check that the plans were presented at city councils on the island, which would often instigate a request for a higher percentage from the developer, El País reported. 

Some people put forward as much as €200,000 to own a luxury home in a coastal neighbourhood of Palma, Majorca's capital. 

Photo: Andres Nieto Porras/Flickr

However as time passed construction work on the commissioned apartment buildings never seemed to get off the ground.

When the buyers demanded explanations from developer Lujo Casa, whose offices were shared with Mallorca Investments, no proper explanation was given.

"When we went months later to ask for explanations, the real estate agency had changed address and there was no employee from the building company either,” one of the buyers who put down first €23,500 euros and then €70,500 euros when the plans were presented at a town hall, told the Spanish daily. 

“When we managed to contact them the real estate agency would ignore us or tell us they had no new information and that they had also been cheated. 

“Nobody at the developer's answered our e-mails either”.

This nonchalant and evasive reaction was part of the modus operandi of the property group, which according to Spanish Civil Guard sources could be behind the biggest real estate scam in the history of Spain's Balearic Islands. 

Photo: AFP

Following numerous official complaints from 50 of the disgruntled buyers – young, old, local and foreign – a covert investigation was carried out by Spanish authorities which led them to understand how the estate agency and the developer were operating together and how they were run by the same businessman. 

A quick check online confirmed that the suspected scammer, an Italian man, was continuously sharing pictures on his social media accounts of his ostentatious jetsetter lifestyle, travelling business class to Dubai, popping bottles of the most expensive champagne and driving lavish sports cars through Mallorca. 

The man, called M.P. by Spain's Civil Guard, has been arrested and is awaiting trial for numerous counts of fraud.

But for the 200 people who put money forward for the ‘ghost homes', many of whom sacrificed their life savings, there is little indication as to whether they'll ever see their money or their properties materialize.
 

 
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