Hildesheim real estate boss convicted: 26 million euros fraud!

Hildesheim real estate boss convicted: 26 million euros fraud!

A scandal that has made the financial world sit up and take notice: The former managing director of the German Property Group, Charles Smethurst, was convicted in the regional court in Hildesheim after defrauding investors of a whopping 26 million euros. The verdict, which was announced last Tuesday, speaks of particularly serious fraud in four cases. Smethurst, 65, will be behind bars for six years and 11 months.

What happened? Smethurst was found guilty of failing to inform his investors about the insolvency of the German Property Group, which specialized in buying and renovating listed properties. Despite the apparent insolvency of the company, he continued to take out loans and thus caused his financiers serious financial difficulties. Originally he was faced with 56 offenses, which amounted to a total loss of around 56 million euros. However, as part of an understanding between the prosecution and the defense, this complex was reduced to five charges, of which only four were dealt with.

Confession and consequences

The agreement came after Smethurst made a full confession in which he admitted his mistakes and explained that he wanted to save the life he had built. The offenses that took place between June 2018 and July 2019 were mainly negotiated. The investors who were harmed were mostly from France, while the charges against investors from Singapore were dropped. The insolvency administrator reports 1.3 billion euros in incoming payments, but the whereabouts of around 800 million euros is still unclear.

What is particularly eye-catching is the fact that 8,000 investors have now reported to the insolvency administrator. Estimates put the number at up to 25,000 creditors worldwide. The German Property Group had originally promised returns of up to 15 percent, while properties that it wanted to buy and renovate were mostly allowed to fall into disrepair. The liquidity bottlenecks in the company became excessive and invoices could no longer be paid, which made it clear that it was ready for insolvency by mid-2018 at the latest.

A judgment with far-reaching consequences

The prosecution had called for a prison sentence of seven years and three months, while the defense suggested six years and nine months. Ultimately, the sentence imposed is in the middle of the agreed framework. The court made it clear that the perpetrator not only seriously abused his own financial interests, but also the trust of investors. This ruling sends a clear signal that fraud will not be tolerated in the financial world.

What happens next? The case clearly shows that investors should be more cautious and confidence in the financial world has once again been shaken. The investigation and processing of the fraud are far from over, and the questions surrounding the fate of the missing 800 million euros remain open. The trust in the German Property Group has finally been lost.

For detailed information about the incidents and the verdict, please refer to the reporting by star and NDR referred.