TWO conmen tricked their investors out of more than £3m in a property scam which they then used to fund massive gambling habits.
Andrew Jelley, 37, and Joseph Nunn, 42, conned the money out of 24 investors across the south, £2m of which they then lost through online gambling.
Trading under the name AJ Corporate Services, with offices based at the Old Naval Club in Portsmouth, many investors lost hundreds of thousands with one alone losing £440,000.
They had promised returns of 10 to 15 per cent a year on property schemes, which often saw investors signing over their homes. Investors were told their money would be used to buy properties outright and then let them out to gain the returns.
However, many of the properties bought by Nunn and Jelley were saddled with massive mortgages.
But the first many victims knew about their homes being heavily remortgaged by the pair was when repossession orders arrived.
Seven investors lost their homes, and another is on the verge of losing hers. Amongst the victims were Jelley’s own father and his dad’s partner.
In front of a court at Portsmouth Crown Court, packed with many of the pair’s victims, prosecutor David Reid laid out the extent of the scam.
Jelley, of Broad Street in Old Portsmouth, pleaded guilty to three counts of fraud relating to mortgage applications, and Nunn, of Hastings Road in Corsham, Wiltshire, pleaded guilty to seven similar counts, all between February 2004 and April 2009 when the men were arrested.
Mr Reid said: ‘Money was frittered away and not used in legitimate ways.’
He explained how the scheme relied on a constant stream of new investment to keep paying the interest to existing investors, but once that stream dried up, it collapsed.
He added: ‘There was in every case a relationship of trust which the defendants breached. The majority of the investors were also close to retirement and they were therefore in a much more precarious position.’
Michael Cousens, counsel for Jelley, said his client had no idea of the extent of Nunn’s gambling and the amount of money being siphoned out of the company accounts. Nunn was responsible for £1.74m of the gambling losses, with Jelley responsible for £280,000.
He also sought to blame the collapse of the housing market for many of the fund’s problems.
Speaking after Mr Cousens, Jason Taylor, defending Nunn, said: ‘As you can hear, there’s no honour amongst thieves.
‘Mr Nunn wants to apologise whole-heartedly to the victims. He is completely remorseful to the extent that he has made attempts to take his own life.’
Mr Taylor said the gambling had been Nunn’s ‘desperate actions’ to try and retrieve the losses he realised the fund was making.
Both men were due to be sentenced this morning.