The fraud, which was uncovered in 2018, was allegedly led by Carlos 'Charly' García Roldán, whose company promoted phantom housing developments. He faces up to 23 years in prison, having fled Mallorca for Colombia and been arrested in February 2019 in a joint Guardia Civil-Colombian police operation.
A court in Palma is holding a bank liable for negligent control and violation of regulations related to property dealings and money laundering. Specifically, this bank, used by Roldán, "must answer for not having required the promoter to open a special account and the constitution of necessary guarantees". The bank would have known that the payments were being made for housing developments. "It knew about or should have known about the promoter's activity."
Some 220 people were affected by the scam and around 3.3 million euros were paid in the form of deposits. A lawyer representing sixteen of the victims has taken the demand against the bank to the court, this having been based on the Guardia Civil investigation into Casa Lujo (Roldán's company) and reports from the bankruptcy administrator. Other claims are apparently in the pipeline.
All those affected had signed contracts reserving properties The bank did not dispute these, but refused to pay because it understood that they were simple pre-contracts and so it did not have the obligation to apply the guarantees required by building legislation.
Three other people have been accused. Charges against the four are aggravated fraud, belonging to a criminal organisation, punishable insolvency, money laundering and falsification of documents.
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