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The Spanish Lawyer Online

Antonio Flores’ Blog

Thoughts about laws and regulations which affect foreigners in Spain


Archive for June, 2012

The Depiction of a Fraud: Proyectos Antele/Costa Palatinum Fiasco

June 18th, 2012

There comes a time in the Spanish off-plan property development fiasco when the robberies, theft, misappropriation, fraud, call it what you may, stop being a surprise…it merely becomes a matter of measuring the size of the outrage.

€4,500,000 is the size of the outrage in this case, which is the combined sum paid by loyal off-plan property customers, through a local law firm, to finance a development that was to be built by Proyectos Antele/Costa Palatinum, in Murcia. In the end, the story repeats itself: nothing gets built, the monies disappear through a network of group of companies and when asked, the developer claims that the market has hit him hard.

And there is the statement of the account of Proyectos Antele/Costa Palatinum to show the trail of the fast disappearing monies.

From a legal point of view, the matter unfolded as follows:

  • The sole director of this company received four and a half million from trusting buyers, mostly from the United Kingdom, took out a mortgage loan to buy the land (€13,000,000).
  • For reasons unknown to us, even though it seems that he probably ran out of money, the development is halted indefinitely.
  • Faced with a deluge of claims, the developer chose to do one of two: either file for voluntary receivership or offer alternative properties. He chose option number two, a development in none other than Hugo Chavez´s Venezuela (not difficult to guess how that went down…).
  • Caja Murcia, the lender and the guaranteeing savings banks, in an action of unsurprising lack of solidarity and neglecting of contractual and social obligations, tries to wriggle out of responsibility; and all of it, in spite of having provided a bank guarantee in 2007 which they “unilaterally cancelled” in 2008 and now renege on, and having paid back, at least, on one occasion.
  • Having the matter been submitted to criminal courts, as evidence of criminal activity was mounting, we requested the developer to give a statement, which he did, but to state that an unprecedented crisis had hit him so hard that he was unable to develop this project. As for the monies, his answer was that he had used it all to… move earth around the building site (all he could prove he did). And unworthy-of-customers-trust Caja Murcia, after confessing to have refunded at least 1 deposit, -by mistake- according to their words, said they were really never underwriting this development.
  • The Judge, seemingly more comfortable dealing with purse snatchers, shoplifters and other instances of public nuisance, was hopelessly out of her depth and consequently resolved that justice was best served through the civil courts. According to her, intent to defraud had not been proven, even though the Supreme Court in Spain states that intent in a misappropriation case exists where someone diverts monies knowingly.
  • The State Prosecutor, presumably not dissimilar to the sort that makes the headlines in Spain because of attaining this post of utmost responsibility at the silly age of 25, supported the shelving of the case on grounds that no evidence of fraud was produced: €4,500,000 of stolen monies seemed not a purse big enough for him…all of it in two lines.
  • The acting conveyance lawyers have washed their hands of this hold-up.
  • The criminal matter has now been referred to the Appeal Court. A separate civil case against Caja Murcia is now under way.


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