Group used fake documents to get loans much larger than the actual value of the properties, pocketing the difference
Six people have been arrested for their involvement in a massive real estate fraud scheme in the Algarve worth around €40 million, Portugal’s judicial police (PJ) have announced. The suspects, four men and two women, were detained during a police operation named “Orange” that took place earlier this week.
The suspects are accused of creating over 20 companies to buy more than 300 properties in the Algarve using fraudulent bank loans. The group allegedly used fake documents to get loans much larger than the actual value of the properties, pocketing the difference.
The six people arrested are suspected of crimes of criminal association, fraud, money laundering and document forgery, PJ police say in a statement to the press.
The arrests followed seven house and two business searches, which led to the confiscation of dozens of properties, 14 vehicles, a boat, IT equipment and many documents.
Providing further insight into the group’s illegal activity, PJ police say the suspects are part of an “organised group” of people of “many nationalities” with links to their home countries. Together, they created an “economic organisation in the real estate sector, funded entirely through fraudulent bank loans” taken out in Portugal.
Their “modus operandi” involved setting up Portuguese companies through which they acquired hundreds of properties, whose “ownership was immediately transferred to third parties through simulated transactions”.
“In the names of these third parties, and using false documents, they obtained housing loans from Portuguese banks in amounts much higher than the initial purchase prices of the properties, appropriating the difference, as well as the proceeds from the subsequent use of the property as tourist and residential accommodation,” the PJ explain.
The Évora DIAP (Évora regional Criminal Investigation and Action Department) said on Wednesday that several search and seizure operations had been carried out in the Algarve the previous day (Tuesday), namely in Albufeira, Carvoeiro (Lagoa), Portimão and Quarteira (Loulé).
The suspects are now awaiting their first court hearing to determine what legal measures will be taken against them.
