Tag archives for Equity Release

Bankia Employee Had No Knowledge of What He Sold

24th June 2013 by admin under Legal Action     

An employee of a Bankia bank branch has confirmed to the Judge that he had no understanding of the financial product he was selling to a pensioner. What he did tell his client though was that Bankia would soon be topping the lists of the most important banks in Spain: as it happened, it went bust and was bailed out.

Pernille Bering, pictured below, was responsible of signing off the largest ever Equity Release tax-evading product to a Spanish property owner (circa €3 mm) when she worked for Finansbanken. Unlike the Bankia simpleton above, we resist cynicism and continue to believe that she was just not a pretty face sent overseas to charge unencumbered homes owned by pensioners with huge mortgages, but a discernibly intelligent person with a conscience.

Pernille Bering

 

But Pernille let everyone down: desperate to get ahead in her carreer but unwilling to get her hands dirty, she employed a locally based housewife, Maria Tremurici-Falter, to sell to unwarned Costa del Sol pensioners millions of Euros worth of Finansbanken Strategic Asset Allocation Revolving Credit Agreements to purchase investment grade bonds (with a rating not lower than BBB- By Standard & Poor), with a special taste for participations or constributions in non-leveraged hedge funds.

Busy with appointments with her local beauty salon to have her toenails done, Maria could still spare some time to loyally fulfil the Finansbanken Equity Release Sales Programme that consisted on the following:

– Maria would advertise on locals papers on a miraculous way to avoid the horrific consequences of Spanish IHT (thankfully, we now know that the correct word is evade).

– María would explain to panic-stricken pensioners that, with her recipe, they would be alright.

– Pernille would review potential customers’ income documentation (provided she could find any that is) and, the day before signing millions of Euros worth of fraudulent Strategic Asset Allocation at the Notary Office, she would fly down from Denmark for a quick afternoon sum-up meeting with the client at the NH Hotel, or Guadalpin, meetings that generally lasted 45 minutes.

– Next morning, execution-day, the client would be led to the Notary Office to crystalize the fraud.

It is believed that Finansbanken, later called SparLolland and later taken over by Jyske Bank, sold a total of 20 million worth of Equity Release in Spain.

 

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Malaga Appeal Court Orders Danske to Pay Legal Costs

20th June 2013 by admin under Legal Action     

As a result of the decision taken by 3 Magistrates of the Malaga Appeal Court to reject an appeal lodged by Danske Bank International S.A., the lender has been ordered to pay costs.

Danske Bank lawyers were insistent that their representatives were not summoned to Court. Both the Court of First of Instance and the Malaga Appeal Court thought otherwise.

It will now be interesting to find out where did Danske Bank get the brilliant idea of offering mortgages on Spanish property to artificially reduce its value for tax purposes because KPMG says they did not.

Can Klaus “Mønster” Pedersen please shed some light on this conundrum?

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Malaga Appeal Court Rejects Appeal by Danske Bank

17th June 2013 by admin under Legal Action     

The Malaga Appeal Court has rejected a motion filed by Danske Bank lawyers attempting to revoke a decision by the Court of First Instance in Fuengirola that had ordered, some months back, to summon the Danish lender’s managers in their capacity as representatives of the “civilly responsible” party.

The importance of the decision lies with the position of the State Prosecutor Office for, whilst initially they had pressed for the whole Equity Release case to be dismissed (and so had the Fuengirola Judge), in respect to the above appeal their stance can be said to have taken a U-turn when they specifically opposed such appeal.

The bank’s representatives will now have to respond to the questions of the lawyers acting for the Equity Release victim E.A. such as, for example, why did they use the name of K.P.M.G. to convince customers to sign up for the Danske Bank Luxembourg Unit Link/Capital Assurance product when the consultancy mega-firm had never given their blessing to this tax evasion product.

 

 

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The “Audiencia Nacional” Charges Branch Manager for Fraud

6th June 2013 by admin under Legal Action     

For the first time, the National Audience has charged a branch manager criminally for mis-selling banking products.

This is a very near miss for the Nordea Bank S.A. boys whose case was thrown out of Court by the same Judge, Fernando Andreu, because he considered that there was not enough evidence to consider that there was a pre-conceived plan, by Nordea Bank, to cheat customers.

In this other case, the Bankia branch manager of a town in the Alicante area (Alberic) was reluctantly indicted by Fernando Andreu because his superiors in the same Tribunal ordered him to include, as part of a more extensive criminal investigation carried out against the CEOs of this bank, the end users who had been scammed into buying “preferential shares”.

After this gentle kick in the backside, the Magistrate has just requested the bank to provide a copy of the informative prospectus and the promotional literature.

Now that the Magistrate seems “convinced”, would he not want to see a copy of the promotional literature as offered by Nordea Bank Luxembourg S.A., from Luxembourg of course, that devises, encourages, promotes and sells tax evasion products specifically designed to cheat the Spanish Tax system (and which was reported), as well as its customers?

Jesper, we think it’s about time that you report your own bank for tax fraud, before it’s too late…

If you cannot find originals and copies of your own brochures don’t worry, we have plenty.

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Explanation of the Rothschild CreditSelect Series 4

3rd June 2013 by admin under Legal Action     

This email is a summary of the virtues of the Rothschild according to Stephen Dewsnip. The email, for obvious reasons, left out the “downsides” of this unconventional mortgage, a mortgage that according to him allowed the borrower to not be exposed to unnecessary risks..

 

 

From: Dewsnip, Stephen
Sent: 08 November 2006 09:16
To: ”
Subject: RE: Mtgs.
Importance: High

Thank you for your enquiry regarding Rothschild’s Spanish mortgage service, CreditSelect Series 4, and I am now pleased to provide further information for you.

CreditSelect Series 4 is neither complicated nor expensive, and has been designed to enable you to make the funds invested in your Spanish property work harder for you.  It is not a conventional mortgage facility but rather a financial planning tool that creates liquidity for you by providing a loan for investment purposes.  It provides an initial ‘cash-back’ facility, the prospect of an annual income stream, the opportunity to diversify between asset classes, the prospect of long term capital growth through a diversified investment portfolio and, depending on your personal circumstances, tax planning opportunities.  Most importantly, as far as we are concerned, the investments acceptable to us each have a 100% capital guarantee from highly rated, large European banks at the end of 10 years.

CreditSelect Series 4 is available to both residents, whose who live in Spain for longer than 183 days per annum, and non-residents and in keeping with Rothschild’s cautious and conservative approach has been designed to ensure that you are not exposed to unnecessary risks which, when considering that the product involves registering a mortgage over your Spanish home, we regard to be crucially important.  There are no upper age limit restrictions or documentary proof of income required, although we do consider income and asset levels as part of our underwriting process.  It is available where a property is owned by a company, as well as by individuals, and all paperwork and documentation is streamlined and standardised to make the application and completion process as smooth as possible.

In simple terms, it works by arranging a loan secured by a mortgage over your Spanish home with the loan proceeds being invested in a 100% capital guaranteed investment fund that matures after 10 years.  Since the investment fund does not actually pay income throughout its 10 year period, we are happy for interest on the loan to roll-up and at the end of this period, the principal loan amount (ie. excluding any initial cash-back, rolled-up interest, capitalised fees and annual loan drawdowns that we permit to provide an ‘income’ stream) is repaid from the maturing investment.  Of course, the investment funds are designed to return greater sums that the minimum guarantees and the aim is that the maturing investment fund will exceed the total loan balance, including all of the items listed above.  As Rothschild is neither an investment nor tax adviser in this regard, we distribute the product via a network of financial advisers based predominantly in Spain and, should you wish, I would be pleased to provide you with a list of such advisers, with whom we are comfortable in dealing, in order that you can make direct contact.

Like your Spanish property, CreditSelect Series 4 loans are denominated in Euros, as is the investment, thus ensuring that you are not exposed to any unnecessary exchange rate risks.  We lend up to 75% of the property’s current market value which, from the point of view of Spanish inheritance tax planning (something that, regrettably, is often overlooked by not only purchasers but also estate agents, property developers, and even Spanish lawyers and notaries), is considered to be adequate given the tax rate tapering effect, valuation methods acceptable to the Spanish authorities, and the interest roll-up feature of our facility.  Our loans start from €200,000 with effectively no upper maximum, meaning that the product is available to owners of residential property valued at €270,000 or more.

With a CreditSelect Series 4 mortgage, you can take up to 5% of the property’s market value as initial capital or equity release and each year we compare how the investment fund has performed over the previous 12 months to the interest rate charged on the loan and permit an additional loan drawdown representing the surplus investment return, capped at 3% of the investment fund value.  Since this is structured as a loan drawdown rather than as a withdrawal from the investment fund, it is not classified as income and hence is not liable to income tax assessment.  Depending on your personal circumstances, this may also be beneficial to you.

In summary, CreditSelect Series 4 is not designed to be the most aggressive and risky product in the marketplace, in fact quite the opposite – we aim to help our clients in a conservative, cautious and well-structured manner without exposing them to undue risk.

I am enclosing a copy of our term sheet, which sets out the facility’s terms for non-residents in more detail, together with a copy of an article I wrote earlier this year on some of the tax rules in Spain, which you may also find of interest.

I look forward to hearing from you.

Kind regards

 

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“ROTHSCHILD PRESENTS a TAILOR-MADE PRODUCT TO SUIT YOUR NEEDS” goes to COURT

31st May 2013 by admin under Legal Action     

Below is an informative letter sent to Rothschild potential claimants.

 

Dear Sir/Madam,

 

 

We hope this email finds you well.

 

 

The purpose of this email is to confirm that we will be lodging our claim against N.M. ROTHSCHILD & SONS for misleading and illicit advertising with the Courts in Malaga (Juzgados de lo Mercantil) next Friday 7th of June 2013.

 

 

We have experienced some delays due to not having documentary evidence which we consider to be relevant, as well as an unexpected Court filing fee that came into force shortly after our decision to file which meant that the case would have cost an additional 15k Euros to proceed with.

 

 

However, we can now confirm that we are now in a position to proceed as we have gathered a compelling amount of misleading advertising that constitutes the backbone of the case that is being filed with the Courts (to be posted at the ERVA -www.erva.es site over the weekend).

 

 

The referred to advertising was produced by Rothschild and also, by the IFA companies that were selected by Rothschild to sell the product. This advertising is false, untrue and encourages tax evasion by suggesting that Spanish Inheritance Taxes are so onerous that is nothing is done, inheritors of Spanish unencumbered property owners would be prevented from inheriting and the property would be lost to the Spanish State.

 

 

Other fallacious arguments include stating that the Rothschild mortgage is different from a normal mortgage, that the clients “…will not be exposed to unnecessary risks”, that the product “…is designed in such a way that it will potentially produce enough income to service the loan and also, leave a bit of money for the borrower”, that it is a “…responsible product” or “…similar to the Spanish reverse mortgage”, that Rothschild had “…restricted the availability of this product to handful of selected intermediaries” (Hamiltons and Henry Woods), that a “…Mrs. Smith (fictitious person) would have discovered following the death of her husband, to her horror, that IHT in Spain could reach 81.60% in Spain” (when the maximum liability of a spouse is limited to just over 34%) and many more.

 

 

Similarly, deliberate omission of the risks involved in the product are considered to be misleading and therefore, illicit. As an example, Rothschild deliberately concealed the consequence of the very obvious and unavoidable scenario where the investment does not cover the cost of the loan: you lose your home.

 

 

The writ includes several petitions to the Courts: that the advertising is declared illicit, that Rothschild runs at least 4 ads on the Essential Magazine rectifying the misleading publicity (at their cost) and that all contracts signed as a result of such publicity are set aside, restoring customers to their original position prior to signing of the Credit Select mortgage loan, insofar as is practicable.

 

 

Finally, we would like to stress that some IFAs are currently advising against going to Court and are recommending what is called as a “Standstill Agreement”. We would like to advise that such document is a legally useless agreement that does not deal with the fraudulent nature of the CreditSelect loan and is designed to buy time for Rothschild, who prefer to deal with the less belligerent children of their victims as they pass away. In other words, it is a cynical money-making ruse designed at the expense of perpetuating the suffering that N.M. Rothschild & Sons is inflicting on innocent property owners.

 

 

If you have not yet joined this case and you wish to, kindly reply to this email so that we can provide you with the necessary instructions.

 

 

With best regards

Sincerely

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Danske Bank Golfer John Ludskov

4th May 2013 by admin under Stories of Victims     

Danske´s John Lundskov golfing abilities ensured he could get many clients for his fraudulent Spanish Equity Release/Capital Assurance.

One of such clients has just passed away: he was Danish, just like Lundskov, and had sufficient funds to not have to beg, borrow, work or deal with evil bankers. And yet, he was sold the miracle product by Lundskov on grounds that his IHT exposure would be close to 80%.

His partner has now been left with a complicated situation: on the one side, she has documents from Danske Bank saying that this product is great to legally avoid taxes. On the other, Lundskov and Henrik Hjerrild Hansen are now nowhere to be seen when the tax thing is raised. And to make things even more complicated, the Spanish Tax Office has stated that under no circumstance is a loan a valid vehicle to avoid taxes in Spain, if it was not used to buy a home.

We will now formally demand from Danske Bank Luxembourg that they comply with their “tax avoidance” undertakings and foot the bill, as appropriate.

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SLMH and Henry Woods, Equity Release fraud at its best

10th April 2013 by admin under Legal Action     

The Surrenda Link Mortgage Holding fell for the fake tax mitigation scheme that Charles “Charlie” Walton, based in Estepona, came up with. Just how any bank could have been so stupid to believe it is shocking but more worryingly is the fact that trusting customers, conned in the most despicable manner, have to be chasing this bank to obtain a resolution to their plight.

Below is a letter that was sent to SLMH by lawyers acting for a victim:

 

Dear Sirs

As you may be aware, the above customers took out a mortgage with your company between the years 2006 and 2007. The purpose of this mortgage was to reduce the taxable value of their property, with a view to pay a lesser IHT, and to create at the same time an income stream that would enable them to improve their lifestyle, given that they are all pensioners.

It is my understanding that Mr. Charles Walton, from the Premier Group, introduced this scheme in Spain some years back and convinced the SLM Group to provide the loans. This seems clear from the information below:

http://www.ifaonline.co.uk/international-investment/news/1329056/premier-offers-spanish-iht-mitigation

http://www.telegraph.co.uk/expat/4195059/How-to-make-Spanish-property-pay.html

The following also appear to be true:

  1. Both Premier and SLM devised, planned, promoted and sold the product to British pensioners, under the appealing name SITIRS (Spanish Investment Transfer and Income Release Scheme), on the basis of one very clear message: “reduce the value of your property or face paying a very high tax rate”. The fraudulent and misleading advertising for this artifice is undisputed.  
  2. The product was also deceitfully sold as a means to raise cash and provide an income stream, being self-sustainable: pensioners were not required to have an income (SITIRS brochure read “there are no income proof requirements from loan providers”).
  3. SLM was not regulated to provide mortgage loans in Spain, as is required by any entity that wishes to professionally provide such service in Spain. The footer warning note amply inserted in promotional literature is no mitigating factor to the lack of compliance with this non-waiverable requirement. If at all, it shows that in spite of knowing the existence of certain regulatory obligations, SLMH chose to infringe them deliberately.  
  4. SLM instructed unregulated IFA to capture clients in Spain, against mandatory regulatory provisions. Hamiltons Financial Services is one of such agents and was used as a means for SLM and Premier Group to further their business in Spain. We find the allegation that the pseudo- IFA´s were in fact hired by the customer as an excuse that deforms reality and is obviously untrue.  
  5. SLM instructed unregulated property valuers in Spain to capture clients, against mandatory regulatory provisions. Cluttons is one of such examples.

We would like to enter into a constructive dialogue in respect of these products, with a view to terminating the contracts on grounds that they are based on an illicit cause (tax evasion proposition), sold misleadingly as being able to legally reduce IHT taxes (irrespective of whether customers could have had independent advice), sold misleadingly as a means to provide an income for the duration of the term of the loan and utterly inadequate for the customer´s profile.

Should you deem the above proposition acceptable, I am be happy to discuss the procedure to achieve the a settlement on this matter.

Yours faithfully

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Contracts Used to Evade Taxes Declared Void

28th January 2013 by admin under Legal Action, Uncategorized     

Several Spanish Courts are already ahead of the game on using contractual artifices to evade taxes, pretty much what the Equity Release was all about. The chief difference between both setups is that whilst the ones already set aside were mutually agreed on the understanding that it was illegal to do so, on the Equity Release banks lied as to the legality of the matter and misrepresented the truth.

As Nordea put it

We offered you advice which we thought was correct at the time of publication. It was however your prerrogative to go elsewhere to obtain correct advice…(!)

In contrast to Nordea’s clever plan, Madrid-based National Audience said the following about contracts used to avoid Capital Gains Tax:

It is reasonable to presume that the profuse and complex series of contracts carried out by the parties answered to a fiscal strategy and, in reality, had no other purpose than to evade taxes…In summary, the object of each of the contracts agreed to was unconnected from the real economical nature that they are intended for, and were rather used seek tax avoidance, once the contracts were succesfully implemented, on the gains derived from the main agreement.

The Superior Court in Navarra established that:

No juridical contract can enjoy this status if it is intended to attain a tax advantage, because no tax advantage can be transferred between the parties, and thus such contract produces no effect in respect of third parties…what has been confirmed is a surreptitious avoidance of taxes which none of that parties were entited, directly or indirectly, to legally avoid.

And more recently, on the 2nd of February 2012, th Supreme Court in Madrid endorsed all prior judicial opinion on the matter by ratifying that:

We must conclude  by asserting the illicit nature of the object of the contract insofar as the aim pursued by the parties was an illegal and immoral business common to both…exemption and tax advatange…without any of the parties being entitled to it.

If the contracts are not valid, there is no question of them being set aside and damages being awarded…for they never existed.

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BFI Consulting, Swiss Life, Nordea Bank Luxembourg and…Allan Graydon!

19th January 2013 by admin under Legal Action     

SwissChoices is about Swiss Quality. And that is how it will be delivered to SwissChoices clients.

At ERVA, we often visualize Allan Graydon sitting at his kitchen table, in his underpants, thinking about how to drive new business in, and, upon coming up with new brilliant ideas, dialling one of the following numbers:

  • Nordea Bank (Luxembourg) S.A. Jhon Mortensen
  • Peter and Jane, caught up in the Landsbanki scam, asking for €500 to negotiate with infamous Yvette Hamilius.
  • BFI Consulting Frank R. Suess
  • Swiss Life Ivo Furrer
  • Mercadona Calahonda home delivery service.
  • Spririt Hairdressing and Beaty Salon, Nueva Andalucia
  • Norman Steele, long-standing pal and former partner, who fell foul of some national authorities for fraud.
  • Morten Remo Sorensen, current partner fined by the Spanish financial regulator (CNMV) for illegally offering financial investment services on behalf of consumers.

SwissChoicesEquityReleaseBrochure

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