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The Spanish Lawyer Online

Spanish Equity Release Fiasco

Exposing Danske Bank, Rothschild, Nykredit, Sydbank and Others


Posts Tagged ‘Danske Bank’

Danske Bank Luxembourg Agreed to Settle With an 85-year Old British Couple Not Before Extracting an Apology

March 19th, 2012

Klaus “Monster” Pedersen, the same high-flying executive who thought to be above-board to sell his Spanish tax-evading equity release products to old-age pensioners, preferably through Costa-del-Sol financial cowboys, promising them it was a miracle-product (only to later make the advice disappear from the company website), found that further humiliating his victims by extracting an apology was correct, not before taking €300,000 from them.

Humiliator-in-Chief Pedersen had to agree on a settlement after his company was approached by Sharon Bowles, MEP for the victims, but took great offence that the matter had “transpired” because in opaque Luxembourg, where he is based, washing dirty-linen in public was seen as a sacrilege, particularly with tax-evasion being high on the agenda.

Will he be asking for an apology from the largest Danish newspaper, Jyllands-Posten, for stating that they actively promoted tax fraud through Costa-cowboys?

Story originally posted on the ERVA Website.

Stories of Victims

Rothschild’s Equity Release Pitch Not Convincing Enough

November 16th, 2011

When the Equity Release providers chose to roam the Spanish Costas and hired imposter IFAs, they seriously hampered their ability to lend in a massive scale for their scope was, from the outset, limited to the tourist areas. Because having hundreds of millions to lend, perhaps billions, to unsuspecting pensioners who were looking at maitaining their wealth, I would have thought that a full on marketing campaign was de rigeur, via Spanish national television, media outlets etc.

Surely, the following pitch would have made tens of thousands of pensioners to latch on to the Tax-Evading-Equity-Release-Programme:


Dear Spanish Pensioner, this message is for you and if you don’t listen carefully, you may be in trouble: Do you own a property?…Do you not have a mortgage on it?…Do you not realize that your property and family wealth is in danger if you don’t to something?…Because the Spanish Inland Revenue is here to rob you…Take out a mortgage loan on your property, no matter your age or size of your pension, have a guaranteed income AND dodge the Inland Revenue…Or do nothing in terms of IHT planning and make the tax man’s life easier, make them a member of family and allow them to run away with your hard-earned income.” (non-bold text extracted from publicity used by agents employed by Rothschild and Nordea Bank).

One can only imagine the hundreds of millions of Euros these banks, imposter IFAs, Lawyers, Notary Publics and incompetent tax-haven-fund-managers, could have reaped if this ad would have on say, Antena 3, Telecinco, Canal Sur, or perhaps the BBC…and it will stay in our imagination because had this scaremongering message been divulged on Spanish media outlets, live-broadcasted breaking-news showing scores of pinstriped-suited individuals being thrown into police vans would had been almost guaranteed.

Yet still they managed to run off to Luxembourg with a few good number of millions of expat money.


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The Equity Release Lie Exposed

September 11th, 2011

As we know, some of the “Equity Releasers” were utilizing the insurance wrapper to cajole otherwise debt-free property owners to release the largest possible chunk of their wealth and give it to irresponsible banks so that they could mitigate the taxes (Inheritance and Wealth) and with clever “banking”, get a monthly salary, etc. Rothschild, Danske Bank, Landsbanki and Nordea, among others, used the Unit-Linked/Capital Assurance to tell the tale that those funds would be under the radar of the Spanish taxman, as Nordea put it, “Keeping it in the family – efficient tax planning”. But, since as early as 1999, the Spanish Tax Office had already plans for these schemes…when specifically stating that Inheritance Tax would apply in full, by repeating insistently, literally, that:


“ where policy holder and beneficiary are different, the amounts derived from the insurance will be subject to IHT in Spain”


I would also throw in article 18 of the Spanish Inheritance Tax 1999 Regulation which states that, in the event of non-residents for tax purposes (referring to the inheritors), the amounts derived from life insurance contracts will be taxed in Spain where the contracts were signed with Spanish insurance companies or signed in Spain with foreign insurance companies that operated in Spain.

Are these schemes therefore not a deliberate tax-defrauding deception designed to release precious equity that, thereafter and in the best of cases, got lost due to irresponsible management and in the worst, misappropriated?


The following documents are binding enquiries (consultas vinculantes) answered by the tax office proving the above. Please note they are in Spanish:

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The Equity Release Victims Association

August 24th, 2011

Following a couple of articles in the Daily Telegraph and the Olive Press about Euan Armstrong and his plight, it was decided by a number of people affected by this scandal that an association would be created, to be named the “Equity Release Victims Association”.

The purpose of the Association is to draw the attention of the authorities, namely the Bank of Spain, Financial -CNMV- and Insurance regulators –DGS- and finally the Ombudsman, to the predicament suffered by hundreds of until-then-free-from-mortgage-property-owners who had the misfortune of crossing paths with mostly Scandinavian banks and given the size of the swindle it is strongly believed that this could be classed as an issue of public order.

The association wishes to campaign against banks that marketed, offered and sold unregulated Equity Release products in Spain, through a network of agents, to mostly pensioners. The products were sold on false promises and undertakings, these being:

  1. Promises of regulatory compliance of their products in Spain.
  2. Promises of IHT exemptions.
  3. Promises of Wealth Tax exemptions.
  4. Financially self-sustained product, so that the loan would be invested in such a way that the yields would cover the interest cost and leave a surplus, which would be like a salary. Needless to say, this never happened.
  5. Protection for property ownership.

On future posts we will provide further information on this soon-to-be-created association.

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Danske’s Frontispiece Shows Drama

August 3rd, 2011

The frontispiece of Danske Bank’s vividly shows the state in which my client has been left after having a few drinks, and signing a couple of contracts, with Denmark’s biggest financial entity: “en pelotas“, as they say in Spain (stark naked or high and dry, whichever way you want to interpret the photo).



The article, by Sean O’Hare,  is superbly written and sticks to the points of argument: that Danske offered a product to British expats with a view to make money out of it, on the pretext that IHT would be mitigated and pocket-money would be received by the client, for the investment would yield enough to settle the interest and leave a surplus. As far as inheritance tax was concerned, no such luck could have struck the beneficiaries, for they would have been breaking the laws, and as regards to the pocket money, unfortunately he no longer has trousers to bear pockets to garner any cash, like the Greek Adonis of the frontispiece…

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Auction Freezing Order is Registered by Judge in Agreement with Prosecutor in Danske Bank Case

June 23rd, 2011

It’s a definitely difficult time for Danske Bank in Spain. The Judge has agreed that a property on which an Equity Release product was raised should be frozen on account of a criminal investigation into the activities of Danske Bank’s employees, inclusive of Peter Staarup, its CEO. The State Prosecutor has not opposed to the measure and thus, it will be lodged with the land registry with immediate effect.

Interestingly, the Judge also notifies this decision to the Economic Crime Prosecutor for an opinion on the matter.


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Danske Bank’s Dangerous Liaisons

June 19th, 2011

The Financial Services Board (FSB), the financial regulator in the Republic of South Africa, had warned back in 2005 that an arrest warrant had been issued in this country against Norman Edwin Steele, as a result of a criminal investigation including fraud.

Mr. Steele, faced with the prospect of serving time at a Durban prison relocated to the Costa del Sol and went on to work with Graydon & Associates, unregulated IFAs operating in Spain and sold, on behalf of Danske Bank, equity-release schemes to mostly British pensioners on the basis of a crafty stratagem that was supposed to release their inheritors from potential IHT liability (Inheritance Tax).

Well, back in time as far as the 19th of June of 2002, the Jersey Financial Services Commission had warned, through a public statement titled “Arrow International Management Services Limited And Norman Edwin Steele“, that Mr. Norman Edwin Steele has not received authorization to conduct investment business within meaning of Law, and that the Commission has also obtained evidence that demonstrates that the above named persons have been conducting illegal investments business from within South Africa.

It finally states that any person who has had investment dealings with AIMSL (the operating company for Mr Steele) since 1 July 1999 should contact Enforcement.

Danske Bank’s guys on the Costa del Sol should have stayed off the sangria when conducting their due diligence on their appointed representatives because, as a result, they ended up engaging the services of one pseudo-financial advisor on an arrest warrant, who was warned to never operate in Jersey, and a further gentlemen, Mr.Graydon, who together with Steele made tens of thousands of euros from selling tax-evading equity-release under the auspices of Danske Bank (although the former was only confirmed to be an expert in “fiscal and accountancy advice and signatory to Introducer/Referrer agreements with a number of highly regulated international banks that offer loan facilities on Spanish located property which can be used for a number of purposes such as equity release”, Mr. Graydon dixit.)

I wonder if Mr. Steele and Mr. Graydon and, by extension, Danske Bank and all other Equity-Releasers (Nordea, Nykredit/Sydbank, Rothschild, etc.), even realized that by encouraging their clients to sign these products to avoid IHT they were indeed pushing their inheritors to contemplate committing tax fraud in Spain which, when over €120,000 of unpaid tax per year, could trigger a conviction of up to 5 years imprisonment and a fine of up to 6 times that of the sum defrauded.

If we read articles 12 and 13 of the Inheritance Tax Act, it clearly stipulates that charges such as mortgages that don’t entail the reduction of the value of the property are not deductible, even though the debts these mortgages guarantee may be deducted if they are real. But which debt, if the money was supposed to be sitting in an offshore account?

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By the Skin of the Teeth: Property Auction Instigated by Danske Bank Halted

June 11th, 2011

Note: This is a repost of


My client has had a narrow escape: having been notified in early March by the courts that his property was to be auctioned byDanske Bank, at 11:00h of the 8th of June 2011, we managed to obtain from the same court a ruling suspending the auctionexactly…24 hours before (just like that one last call from the Alabama Governor…)

And prior to this, on the 27th of May 2011, that is, just a few days before the auction, we are advised, through the courts (Document in PDF), that, unbeknownst to him, my client did indeed have €126,946.64 with Danske Bank, in some account in Luxembourg, which is what he had been wiring to them, over the years, to attempt to placate them and avoid being kicked out of his retirement home bought with his life-savings. One can only imagine the topnotch service Danske bank provided my client once they had abandoned Spain, not before trying to repossess a few homes in its wake. Danske Bank had all but forgotten about this money until the very end, and they have the cheek to say that the debtor had paid up this sum when, as a matter of fact, it had been blocked for years.

So if it was not enough stress, we added that extra bit to it by, unwillingly, choosing the latest of the possible dates (other than tomorrow) to set aside the sale at public auction instigated by Danske Bank against a 73 year-old retired mariner victim of an equity-release, who had been conned into believing that, by going with the biggest Bank in Denmark and contracting what is effectively a tax-evading financial product on his unencumbered retirement home, he would have a monthly payment coming his way, pretty much all the inheritance tax his daughters would be hit with waived or wiped out and all of it, without risking anything (apart from his home, his health and, potentially, his two beautiful daughters’ freedom, as they would have been eligible for prison sentences to be served at Alhaurin prison, 10 minutes’ drive from the foreclosed home, had they followed Danske Bank’s careful tax planning).

The Judge had no choice but to suspend the auction as, alongside these foreclosure proceedings claiming approximately €845,000 (which is what Danske Bank’s clever and optimized investing has lost, or rather, in my opinion, allegedly misappropriated), a criminal complaint had been lodged in Mijas against CEO Peter Staarup and his sales guys once based on the Costa del Sol, including an unregulated IFA hired by the bank.

These are some the promises made by Danske Bank on its prospectus:

  • Exempt from Spanish Inheritance Taxif the beneficiaries, on the death of the insured, are not residents in Spain, the capital will not be liable to Spanish inheritance tax.
  • Investment Strategy: CAUTIOUS

If this is what the HMRC thinks about tax-avoidance schemes, what would they say about the Danske Bank Tax-Evasion Capital Assurance product?




CNMV responds to an initial info request

June 6th, 2011

The Spanish regulator, the CNMV, has answered a petition on information that was made about 1 month ago. From it, we can conclude that:

  1. Danske Bank´s Capital “Assurance” product did not get clearance to be offered to investors based in Spain. We are waiting for an answer from the Insurance regulator (DGS).
  2. Nykredit Realkredit is regulated in Spain and obtained clearance to offer a product labelled “Euro-denominated perpetual hybrid core capital notes”. Sydbank, with whom investors signed their contracts, is not.
  3. The IFA: no sign of the gentleman although he seems to have clearance to act on behalf of “Caser” Insurance, on an exclusive basis, to offer a number of insurance products. No trace of having authority to sell Danske Bank products. He certainly is not authorized to sell any financial service or product.
  4. Rothschild: Registered with the CNMV but need to be more specific although, since they were selling the Aspect Policy, this will be for the DGS to advise on.


  • Scanned pdf of the response from spanish regulator to initial enquiry here (400 Kb.)

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Court Accepts Criminal Complaint Filed Against Danske Bank CEO

May 24th, 2011

A judge from the Court of First Instance nº 1 in Fuegirola accepts the criminal complaint filed against Danske Bank’s CEO Peter Straarup, plus other four people for deceipt by swindle, missapropriation and deceiptful publicity, we submitted a couple of weeks ago.


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