Broker denies £3.5m mortgage fraud

A broker has denied carrying out £3.5 million worth of fraudulent mortgages, despite being charged of deceiving 51 different victims.

David Reid of Washington Mortgage Centre has admitted his wrongdoing in the complicated mortgage case, but heavily disputes the £3.5 million figure attributed to his crimes.

David Reid was charged in December with 23 offences of obtaining a money transfer by deception, involving 51 different victims.

Reid’s legal team will now draft in experts to assess over 7,000 pages of documents connected with the case.

A police investigation into financial irregularities at the company revealed a host of unlawful activity, resulting in its closure back in January of this year.

The investigation was launched after a number of customers reported they were unable to access money invested through the centre.

Wealthy businessman David Reid, 49, was arrested earlier this year whilst also being suspended from his membership at the Durham North West Labour Party.

Reid was not asked to enter a plea to the charges, which span a period of more than 10 years, but his barrister Jamie Adams said he will admit wrongdoing.

Speaking on the case, Jamie Adams, Reid’s Barrister, said: “This is a complex fraud involving, at the moment, the prosecution say, something like a fraud to the tune of £3.5million of monies taken from investors and employed in a so-called Ponzi scheme.

“This will, in due course, be a guilty plea, it is a question of the extent of it all.

“It is one of those cases where it is vital for the defence to have an opinion from a forensic accountant.

“There are detailed records of all the transactions which have led to these charges.

“They need to be looked at and gone through.”

In conjunction with the investigation, officers raided Mr Reid’s home, a large detached house at St John’s Mews in the village of Burnhope, County Durham, and an office linked to the Washington Mortgage Centre, in Washington.

A 41-year-old woman was also arrested as part of the investigations on suspicion of laundering money; however she was later released with no charge.

Speaking on the arrest of Mr Reid prior to the charge, DCI Christina Barrett said: "We know that a lot of people are very concerned about their dealings with this business, often involving large sums of money.

"We have received a number of allegations of financial irregularity relating to investments made through the Washington Mortgage Centre over a number of years.

"I would like to appeal for anyone who has been involved financially with the Washington Mortgage Centre and who has any concerns to contact one of our officers on the 101 non-emergency number.”

Investors who claim they are victims of the suspected fraud contacted the Sunderland Echo claiming they have lost hundreds of thousands of pounds through the company.

A number of these investors have been supporting each other as the case progresses and are continuing efforts to get their money back.

One man, who asked not to be identified, told the Sunderland Echo: “We lost money when we went to remortgage a property. We were told the money had been put into an off-shore account.

“Then all of a sudden, we could not get in touch with anyone at the company for love nor money that was when we called the police.”

Other suspected victims claimed they lost inheritance money and cash they had put away for their children.

The complex financial investigation had been on-going since this January , but officers are understood to be investigating alleged financial irregularities stretching back a number of years.

One investor said: “I think the complaints started last summer and slowly built up over the next few months. It was then the investigations began.”

Reid, from Durham, has also been charged with participating in fraudulent business, stretching back to January 2007.

Judge James Goss QC adjourned the case until December 23.

He said: “I understand you do not deny you have committed a significant number of offences but I can understand the material has to be scrutinised to identify precisely what offences you have committed and the extent of them.”