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Childcare home scam nets £11 million before administrators called in
| Published: | 4 Jan at 6 PM |
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Pensioners in the UK and in Spain have lost some £11 million after a fraudulent care home business went bust.
Gravity Child Care was supposedly set up to provide 50 care homes for children suffering from behavioural difficulties and mental illnesses, taking its profits from payments made by local councils to businesses which provide such services. Investors, mostly UK-based pensioners and retirees living overseas, were promised 15 per cent interest on their investments, plus the knowledge their savings were being used for a good cause.
Investors were repeatedly told growth on their money was at an impressive rate, but by 2015 statements were being delayed amidst concern as to what was really happening. In December last year, administrators were finally called in and found investors’ funds had vanished into thin air. It seems the company only bought two properties worth a total of £600,000, and only opened one facility for just 10 children. A source reported a paper trail leading overseas, saying the cash was sent to Dubai and possibly also to Sri Lanka.
Funds had been raised by doorstep marketing and advertisements, with the scam being described as ‘an exciting service offering residential care for children’. Potential returns on investments of between 11 and 21 per cent were offered. The majority of victims were either retired or near the end of their working lives and had small pension pots. The company had advertised in a Spanish magazine aimed at expats, potentially pulling in British expat retirees as well as pensioners living in the UK. According to the administrators, it has debts of over £14 million and only 30 investors to date have received their money back.
Gravity Child Care was supposedly set up to provide 50 care homes for children suffering from behavioural difficulties and mental illnesses, taking its profits from payments made by local councils to businesses which provide such services. Investors, mostly UK-based pensioners and retirees living overseas, were promised 15 per cent interest on their investments, plus the knowledge their savings were being used for a good cause.
Investors were repeatedly told growth on their money was at an impressive rate, but by 2015 statements were being delayed amidst concern as to what was really happening. In December last year, administrators were finally called in and found investors’ funds had vanished into thin air. It seems the company only bought two properties worth a total of £600,000, and only opened one facility for just 10 children. A source reported a paper trail leading overseas, saying the cash was sent to Dubai and possibly also to Sri Lanka.
Funds had been raised by doorstep marketing and advertisements, with the scam being described as ‘an exciting service offering residential care for children’. Potential returns on investments of between 11 and 21 per cent were offered. The majority of victims were either retired or near the end of their working lives and had small pension pots. The company had advertised in a Spanish magazine aimed at expats, potentially pulling in British expat retirees as well as pensioners living in the UK. According to the administrators, it has debts of over £14 million and only 30 investors to date have received their money back.
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