Bridging lender target of solicitor & developer fraud

Bridging lender target of solicitor & developer fraud



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A property developer and a legal executive who mis-used bridging finance have been jailed after both admitting eight charges of fraud.

Developer Franco Campagna, 34, began taking out short-term bridging loans on buy-to-let properties he was selling on to his clients after he ran into financial difficulties when the property market collapsed. Campagna purchased properties supposedly on behalf of his clients using funds from Lancashire Mortgage Corporation (LMC). LMC have since been left with a repossession property portfolio which is in the process of being sold off.

His clients then received funding from Birmingham Midshires Mortgages which was designed to pay off this short-term finance. Instead of this, however, Campagna persuaded his friend, conveyancer David Kitching, to use the funds to discharge other loans on properties he had bought.

Kitching, who worked for legal firm Grahame Stowe Bateson, convinced Birmingham Midshires to release the funds by producing false certificates of title for the mortgage company.

The fraud came to light after the company wrote to Kitching’s employers, prompting them to begin an investigation.

According to prosecutor Jonathan Sharpe, the misapplied funds totalled £537,655, the Yorkshire Evening Post reports.

Campagna and Kitching were first introduced in 1998. They worked closely together, with the conveyancer handling between 250 and 300 of the developer’s transactions.

Campagna also introduced some of his buy-to-let clients to the legal executive, who began doing their conveyancing too. However, the developer soon began to instruct Kitching on behalf of these clients when they were buying from him, instead of allowing them to be separately represented.

The misapplied funds have not been found, leaving Kitching’s company facing civil claims of more than £700,000. Graham Stowe, a solicitor in the firm, told the Yorkshire Evening Post: “The firm and his work colleagues are stunned by his conduct, disloyalty and betrayal.”

Campagna, of Armroyd Lane, Elsecar, Barnsley, admitted eight charges of fraud and was jailed for two years and four months. Kitching, of Queens Close, Leeds, also admitted the charges and was jailed for 12 months.

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