Two conmen jailed for a total of 20 years for running Britain’s biggest ever mortgage fraud were ordered to pay back more than £30 million
Saghir Afzal, 50, fleeced banks out of £49 million by buying cheap properties, including a cowshed and an abandoned air base, and paid crooked chartered surveyor Ian McGarry, 43, to provide false valuations.
In June 2011 Afzal was jailed for 13 years and McGarry was locked up for seven years.
Today they were ordered to pay back a total of £30,826,013.86 in one of the largest confiscation orders ever made in the UK or spend a further 16 years behind bars.
Scam artists: Saghir Afzal and Ian McGarry have been ordered to pay back £30m or spend even longer in jail
Between 2004 and 2006 companies controlled by Birmingham-based fraudster Afzal and his brother Nisar, 54, bought six commercial properties for just £5,688,125.
McGarry, a director at Dunlop Haywards Lorenz, then provided false valuations in order for the Afzals to deceive lenders into loaning £49,287,000.
The Afzal brothers - who sent £26m to Pakistan - bribed McGarry with lavish overseas holidays in Dubai, an Aston Martin car, cash in brown paper envelopes, and the purchase of three properties in London, valued collectively at more than £1m, to aid the massive scam.
Saghir continues to deny involvement in the scam and refused to take part in proceedings today.
Judge Martin Beddoe said: ‘He informs me that he was wholly unaware of the fraud and he was the dupe of two men.’
He said that as a result he had ‘simply no idea’ where the bulk of the money has gone.
‘By me trying to determine what he now has available to him is really trying to pin the tail on the donkey, for all I know Mr Afzal now, as a result of good investment, has assets worth £60m,’ said the judge.
‘But, on the basis he shared the profit of this fraud [with his brother] I have to conclude that that is unlikely.’
The judge ordered that Saghir pay back £29,276,565.91p within six months or face another ten years in jail.
The court heard Saghir’s Afzal assets are believed to include property in Birmingham, Pakistan, the US, and Spain, and the £26m that was sent to Pakistan
McGarry was told he must pay back £1,549.447.95 within six months or spend another six years behind bars.
The court heard that after his arrest he had attempted to hide large chunks of his criminal earnings.He was gifted two properties in Monument, central London, valued at almost £800,000, and a third property in Barnsbury, north London, worth £326,000, by the Afzals on which he earned around £50,000 in rent.
Judge Beddoe said: ‘He did his best to minimalise his offending.
‘He was determined to hold on to as much of those dishonest gains as he can time and again since this enquiry began.
‘On his first arrest he attempted to move the £86,000 he had hidden in London’s Silver Vaults.
‘Second he quickly sold the Porsche for £58,000 and hid the money by transferring it into a bank account set up for the purpose in his wife’s name.
‘After the restraint order was made he diverted money he made as a surveyor into a company ostensibly under the control of his wife.’
He said McGarry’s benefit was £2,792,401.29, but stated that the realisable assets were just over £1.5m.
Jailing Saghir Afzal and McGarry last summer Judge Beddoe described the fraud as a ‘massive and carefully orchestrated confidence trick’.
Prosecutor Andrew Baillie QC said Nisar Afzal had the ‘productive entrepreneurial role’, while Saghir was involved in the ‘day-to-day management of banking and other financial matters’.
McGarry abused his position to provide the false valuations which persuaded the banks that the sites were a good investment.
One 183-acre site was a former US Airforce base in Fakenham, Norfolk, now known as Tattersett Business Park.
It was purchased for £2.75million before a mortgage of £9.1 million was raised from French bank Sociiti Ginirale through a series of front companies.
The bank ‘relied on the property valuation provided by Mr McGarry’, while the fraudsters also created bogus leases suggesting the site was accruing significant income from commercial tenants.
In reality the site was near derelict and home to several families of gipsies.
The Nationwide Building Society was conned when it lent £26m against a former St Ivel dairy in Johnstown, Carmarthen, Wales; offices known as BIP Popes Lane in Oldbury, West Midlands and the Saltley Industrial Estate in Birmingham.
McGarry helped raise a £6.563m loan on Saltley, which was later repossessed and sold for £650,000.
The value of St Ivel was inflated to £14.25m when it was really worth £750,000, while the £700,000 BIP premises generated a £6.15m mortgage.
The fraudsters also used McGarry’s valuations to obtain £11.5m of loans from Cheshire Building Society for Concentric Works, a 3.5acre site made up of workshop and office units dating back to the 1930s in Aston, Birmingham, and worth nearer £1m.
Mr Baillie said the scam had a ‘very significant impact of the financial health of that building society’.
‘Cheshire had to make provision for a loss of £10m which reduced its profit for 2005 from £11.7m to £1.7,’ he told the court.
Afzal, of Edgbaston, Birmingham, and McGarry, of St Albans, Hertfordshire, admitted two charges of conspiracy to obtain money transfers by deception and four counts of obtaining money transfers by deception.
Nisar Afzal is thought to be in Pakistan and is still wanted by the SFO for his alleged role in the fraud.