Detectives have launched a fraud investigation into a Birmingham financier branded a ‘disgrace’ to his profession and fined nearly £1 million, it was revealed last night.
West Midlands Police has confirmed it is investigating Gurpreet Singh Chadda, who has been banned from working in the financial services industry and fined £945,277 by the Financial Conduct Authority, a record sum for a sole retailer.
Chadda was also reported to the force over claims he deliberately misled vulnerable customers for personal gain, pocketing nearly £700,000 from seven transactions. The FCA said Chadda traded under the company names Red2Black Homes, registered at an address in Soho Hill, Handsworth, and B&L Homes.
The FCA found serious failings in seven ‘sale and rent back’ transactions between June 2009 and February 2010.
A statement from West Midlands Police said: “West Midlands Police Economic Crime Unit is investigating an allegation of fraud by false representation following a referral from the Financial Conduct Authority.
“No arrests have been made as part of the investigation to date and inquiries are still in the very early stages.”
The FCA said Chadda’s widespread failings included:
* Misleading the sellers of properties, who were his customers, by telling them he would be buying their homes when in fact the purchasers were other people;
* Failing to notify the sellers that these purchasers were not authorised or regulated by the FCA, which meant they were not covered by the regulatory protections;
* Helping the purchasers to obtain mortgages in the knowledge that they were giving misleading information to mortgage lenders.
Chadda said he welcomed the intervention and said he would co-operate with officers because they would offer him a ‘fairer trial’ than the FCA.