The Lawbird Tribune

Just when bar and restaurant owners thought things couldn’t get any worse, given the grim financial downturn, you can always rely on the Government to prove them wrong. Mrs Trinidad Jimenez, Spain’s Health Minister, announced yesterday that smoking will be banned in all closed public venues as from the 1st January 2010.

Bar, restaurant, hotel and discotheque owners have only just finished paying off the mandatory expensive reforms to their business premises so as to segregate designated smoking and non-smoking areas in compliance with the newly passed Smoking law (law 28/2005 which came into force on the 1st January 2006). Scarcely three years ahead the Government plans to scrape it off amending this law and banning smoking all together in closed public premises. So basically these refurbishments will now become useless.

On a side note, Spain’s football league are now threatening to go on strike if the tax reform announced by the Government this week is enforced whereby top-football-earners will now be taxed at the highest tax band of 43% instead of a flat income tax rate of 24%. This had garnered Spain widespread criticism throughout Europe on grounds of unfair competition.  Hopefully this will not be the case.

I think some people may be in for a hard time next year if they like watching football or smoking or both.

56 days to go…

raymundo Taxes, Uncategorized ban on smoking, smoking, smoking law

As history’s finest investor, Mr Warren Buffet, once said, “You never know who’s swimming naked until the tide rolls out”. Well the tide has rolled out and investors are panicking withdrawing and liquidating their portfolios in a frantic rush against time to raise funds. It is in such dire times of massive redemption requests when Ponzi schemes are unravelled in all crudity and it becomes all too apparent who was in fact swimming naked. Within the last months we’ve witnessed Madoff’s and this very week Stanford’s Ponzi schemes imploding, sucking in their wake thousands of millions of euros. Are we immune in Spain to such financial ploys? Not so.  

What is a Ponzi Scheme?

This scam involves promising high yields (above the market average) to dazzle gullible investors. These yields are actually paid to existing investors from the funds of newcomers. So a Ponzi scheme needs to continuously lure in a base of new investors to self-perpetuate itself. They normally spread themselves like viruses by word-of-mouth but do not frown advertising themselves in local newspapers. The first recorded case was in the USA in the last quarter of the XIX century although its name is taken from an Italian-American immigrant, Charles Ponzi, who fleeced thousands of investors in Boston in the 1920’s out of 10 million dollars. 

How Long do they Last

Not long, normally only months or a couple of years at most, a noticeable exception would be Madoff’s which lasted remarkably over three decades escaping all detection. As these pyramids need to continuously find a new influx of investors to meet the promised repayments of existing ones they eventually self-implode collapsing like a house of cards as they are unable to keep the rapidly growing pace. Noticeable cases in Spain (aimed exclusively at Spaniards) have been Forum Filatélico and AFINSA both dealing with postage stamps.

I’m too Smart to be Caught in One

No-one is too smart. Judging by Madoff’s and now Stanford’s cases in which the World’s supposedly finest and most sophisticated affluent investors have been caught-up one should not underestimate one’s own greed. These scammers are top salesman and bank on people’s greed to make a living. In fact these Ponzi schemes are not that rare at all in Spain.

If you pick up any weekly English newspaper sold in Spain you will read advertisements that promise you suspiciously two digit yields from exotic and often obscure foreign opportunities. Naturally, these financial advisors are unregulated by Spain’s CNMV (the equivalent of the UK’s FSA) and prey exclusively on foreigners, preferably on their own countrymen to create rapport. The reason that Spaniards are not targeted is that they would quickly raise the alarm of the local authorities so they are careful to only target foreigners, the elder the better, so as to go undetected for as long as possible. Then regularly wind up these boiler rooms and move on to their next scam. As it’s often said, if it sounds too good to be true it often is.

What do I do if I Suspect of One?

You can contact Spain’s CNMV to check the financial advisors that have contacted you are indeed regulated to offer you financial products such as company shares. The CNMV regularly updates in its website such fraudulent companies. If you suspect the yield is too high you may want to take a second professional opinion from an unbiased source such as a chartered financial advisor or a qualified lawyer.

raymundo Uncategorized fraud prevention, madoff, ponzi scheme, pozni scheme, pyramid scheme, scams

More than 48,000 owners will now be able to sleep well at night after majoress Ángeles Muñoz promised to include a new article in the new Master Urban Plan by which purchasers of good faith will be exempt of compensating for the regularisation of their illegal properties. In some cases some neighbours were liable for up to 12,000€.

Following up on our article of 2nd of October 2007 Marbella’s Town Hall will be provisionally approving the new Master Urban Plan (P.G.O.U.).  Marbella’s majoress has declared in a press release that it is a triumph of all to make developers compensate the Town Hall for the irregularities. As per our prior article, the risk there was before was that if a developer was unwilling to pay this compensation it would be up to the new owner, the innocent third party of good faith, who would have the onus of compensating the Town Hall to regularise thier newly purchased home. This will no longer be the case after the inclusion of said article which forces developers to compensate in all cases. The developers will be given a year’s deadline to comply voluntarily after which the Town Hall’s legal representatives will be able to execute the compensations due at developer’s expense. 

The new amended Master Urban Plan includes 6,000 of the 8,500 public appeals that were brought forth. That is 70% of them were accepted including appeals made by more than 350 Community of Owners.

The areas which will now become regularised at the developer’s expense will be: 1,008 dwellings in San Pedro de Alcántara; 3,351 dwellings in Nueva Andalucía; 1,708 in Nagüeles; 1,999 in Marbella; 533 in Río Real and 406 in La Víbora. This regularisation process will involve the developers both granting plots of land of their own as well as purchasing them only to hand them over to the Town Hall so as to restore Marbella’s public areas devised for general use such as future schools or green zones.

The goal of Marbella’s New Master Urban Plan is to create a reliable legal framework that restores confidence back into the real estate market. This will benefit both prospective purchasers and developers.

Notwithstanding there are still 500 inhabited dwellings on which a general consensus must still be attained. Concretely the majoress referred to Banana Beach, Río Real and La Víbora. The remaining 1,500 uninhabited illegal dwellings could find a public use in the future such as Elder Foster Care.

The new amended P.G.O.U. still needs to go again under a second period of public scrutiny should anyone be interested in making additional appeals. Once the Junta de Andalucía gives its final approval the Master Urban Plan will be definitely approved. It is foreseen Marbella will have its new Master Urban Plan approved for spring of 2009.

raymundo Uncategorized Marbella Master Urban Plan, Marbella's PGOU, new urban plan

We are receiving a dozen queries every day asking about the legitimacy of certain offer, generally received by email or over the phone after a cold call. Unfortunately, we cannot analyze case by case, and therefore will provide a set of useful hints which will help you evaluate the legitimacy of the company or individual yourself.

The list below is provided in no particular order:

1. Is the domain name old enough? By means of a Whois search you can find out when the domain name was registered. If it’s only a few weeks old, be suspicious.
2. Are they using mobiles? – If the phones used as contact numbers are mobile numbers instead of land lines, it’s definitely not a good sign. In Spain, mobile numbers start by +34 6..
3. Have you been contacted out of the blue? – If you where cold called, or received an email from someone you don’t know, ask yourself why these people have your contact details.
4. Are you being requested to pay money upfront? This is the single most worrying point if it comes in conjunction of with one or more of the above.
5. Is the offer too good to be true? If the offer sounds too good to be true, it probably is.
6. Is the company properly registered? – Although it’s something positive if they can provide you with company registration details, you shouldn’t give this point too much importance. Fraudsters have been registering companies for decades with the sole purpose of deceiving (e.g. dozens of companies where incorporated by fraudsters to conduct the infamous Timeshare Resale Scam)
7. Is the address for their offices correct? – Not sure why, fraudsters tend to provide you with fake addresses which don’t really exist. Check any of the online street directories and find out if the address provided is correct.
8. Something strange about their names? Funny names such as “Woley Fernandez” or “Barrister Perez Santos ESQ” are names made up by Nigerians conducting 419 advance fee scams (the terms “Barrister” or “ESQ” don’t exist in Spanish law). Also, fraudsters tend to cite fake organisms such as “The Ministry of Finance” or “The Security Company”.
9. What others are saying – Use search engines to find information about the company. Try putting the company in inverted comas, and add terms like “scam” or “fraud”. The company or individual you mention might have already been reported online as fraudsters by other people.

Needless to say, the above list shouldn’t be taken as definitive, nor the absolute legitimacy o illegitimacy of a company established based on one or more of the above points. You can use it, however, to personally evaluate the risk of the transaction.

My recommendation is that you never pay any moneys upfront if you have been contacted out of the blue. However, if you have to, before doing so always suggest the use of an escrow company (chosen by you) to hold the funds until the product or service has been delivered. If they refuse, I recommend that you back off.

Always remember; have a lawyer analyze the transaction before making any up-front payments.

admin Uncategorized 419 nigerian scam, fraud in spain, online scams, spanish scams

Today it has been confirmed that Spain will guarantee all bank deposits up to €100,000. Until today the minimum amount guaranteed by law throughout Europe was €20,000 in case a bank filed for bankruptcy.

In practice, UE members have the freedom to raise the yardstick as they see fit. Such has been the case of the United Kingdom which has raised this week the minimum amount protected from 33,000 to 50,000 GBP in retaliation to Ireland’s unilateral decision of protecting the full amount of their depositors funds. This has created liquidity problems to UK banks which have witnessed massive withdrawals of funds seeking the save haven of Irish banks. Following Ireland’s decision last week, Germany also guaranteed the full amount of private individual’s bank deposits on Monday the 6th October. Many other European countries have followed Germany’s example this week.

In view of the unilateral increases of Ireland and the United Kingdom, the European Union’s Finance Ministers (Ecofin) gathered and decided today to raise the minimum amount protected from €20,000 up to €50,000. All European countries will now be forced to guarantee at least the said amount having the liberty to raise it. Spain only protected €20,000 until early this morning.

Spain’s president, Mr Zapatero, held an urgent meeting yesterday in Madrid with Spain’s six most prominent banks and savings banks promising to raise the minimum protected amount above the UE’s new threshold of €50,000 without specifying any concrete amount.

We welcome these measures, as they should help reduce the sense of panic and bring back confidence in the banking system.

lawbird Uncategorized guarantee of spanish banks, spain banks guarantee, spanish bank deposits