Spanish Off-Plan Property - Bank Guarantees - LEY 57/68

Spain's Corruption Crisis Reaches the Palace

A series of high-profile cases reveals widespread corruption in Spain

By Carol Matlack

Spain, already suffering a painful fiscal hangover from years of economic excess, now faces another unpleasant morning-after symptom: a wave of corruption cases engulfing city halls, regional governments, and even the royal family.

Transparency International estimates that 1,000 corruption investigations are now under way across the country, most involving charges that public officials took advantage of the economic boom to enrich themselves. In the highest-profile case yet, Inaki Urdangarin, the son-in-law of King Juan Carlos, was stripped of his official duties in December pending an investigation into charges that he skimmed millions of dollars from padded government contracts. Urdangarin, summoned to appear before prosecutors on Feb. 25, has denied wrongdoing.

Fresh allegations seem to be cropping up almost daily. The ex-president of the Balearic Islands went on trial in January on charges including embezzlement and fraud, while police in Andalucia accused that region’s former employment chief with spending $1.2 million in public money on cocaine and other personal purchases. And José Blanco, the longtime Socialist Party No. 2, is under investigation for influence-peddling in the northwestern region of Galicia. Lawyers for all of the accused say the charges are false.

Such reports come at an awkward time for Prime Minister Mariano Rajoy’s new government, which is asking citizens to swallow more than $19 billion in tax increases and spending cuts, while promising a crackdown on tax evasion. Rallies against the planned austerity measures drew tens of thousands of protesters in several cities on Jan. 26.

With an absolute majority in parliament, Rajoy will have no trouble getting those measures enacted, says Alejandro Quiroga, a Spanish political scientist at Newcastle University in Britain. But, Quiroga says, “there will be a price to pay,” with the schedule of planned corruption trials now stretching into 2014. “The contradiction between politicians taking advantage of public money, while asking the public to deal with huge austerity measures, is going to get worse with time.”

A Rapid Slide Into Corruption

As recently as a decade ago, Spain was considered one of the world’s least-corrupt countries. But over the past 7 years, its ranking has slid from 22nd to 31st place on Transparency International’s annual survey of perceptions of corruption worldwide.

Spain became a breeding ground for graft during its 15-year real estate boom, says Manuel Villoria, a political scientist at the Rey Juan Carlos University in Madrid who serves on the executive committee of Transparency’s Spanish affiliate. Antiquated laws gave local officials almost unlimited discretion over land-use planning, he says, and developers willingly forked over bribes to get approvals for construction. In the southern resort city of Marbella, prosecutors have accused a former city planning adviser with amassing a $3.4 fortune, including a palace in Madrid and a stud farm guarded by a tiger. Already convicted of bribery and embezzlement, Roca is now being tried on additional charges, along with more than 80 co-defendants. A person answering the phone at the office of Roca’s lawyer hung up on a reporter seeking comment.

Many of the cases now coming to light involve alleged looting of public agencies that were flush with tax receipts and European Union aid during the boom. Investigators have said that a nonprofit foundation run by Urdangarin, the royal son-in-law, negotiated inflated contracts to organize tourism and sporting events for regional governments in Valencia and on the island of Mallorca. Millions were then funneled from the foundation into private companies owned by Urdangarin and a business partner.

It’s the first time that the country’s popular monarchy has been hit by scandal, and the royal family has moved swiftly to contain the damage. In early December, Queen Sofia flew to Washington, where Urdangarin lives with Princess Cristina and their 4 children; soon after, the palace announced Urdangarin would step aside from official duties, and that the royal household would make its financial accounts available for public inspection.

In still other cases, money skimmed from public coffers was used to finance political party activities, says Ken Dubin, a political scientist at IE Business School and Carlos III University. Even the most humdrum government activities became sources of illicit cash. An audit of a wastewater-treatment agency in Valencia found more than $22 million had disappeared from its accounts; agency executives charged Armani suits and luxury watches to their expense accounts and jetted around the globe, staying in five-star hotels at which they sometimes were accompanied by women described as “Romanian translators.”

Marta Andreasen, a Spanish-trained accountant who previously served as the European Union’s chief financial controller and now is a member of the European Parliament, says neither the EU nor the Spanish government showed much interest in controlling such abuses. “A culture was created, we had all this economic growth, and people sort of thought, ‘Who cares?’ Even honest people tolerated it.”

With Sharon Smyth

Matlack is a Paris correspondent for Bloomberg Businessweek.

Bank of Spain opens investigation into ex-CAM officials

Probe targets early retirement payoffs

El País - Rosa Biot / Santiago Navarro Alicante 9 FEB 2012 - 20:54 CET

The Bank of Spain has opened a disciplinary inquiry into the leadership of the nationalized Caja Mediterráneo (CAM) savings bank.

The measure affects the main former directors of the bank, including ex-president Modesto Crespo and ex-director generals Roberto López Abad and María Dolores Amorós, as well as its board of directors and control committee.

The move comes six months after the government intervened to guarantee CAM’s solvency after the failure of its merger with Cajastur, Caja Cantabria and Caja Extremadura last July. Among the scandalous discoveries administrators have unearthed at CAM since the intervention are multi-million-euro early-retirement payouts to five ex-directors

NOTA DE PRENSA

CASO FINCA PARCS  – 4 DIAS DE JUICIO EN  MAYO DE 2012  EN RELACIÓN CON DEMANDA INTERPUESTA FRENTE A LA PROMOTORA ESPAÑOLA CLEYTON GES SL Y EL BANCO FINANCIADOR DE LA PROMOCIÓN  - CAJA DE AHORROS DEL MEDITERRÁNEO

Para publicación inmediata

CASO FINCA PARCS

●  Faltan garantías bancarias para protección de entregas a cuenta sobre plano por un     

    valor de 1.5 millones de euros

●  La demanda frente a la CAM &  el promotor Cleyton GES SL se interpuso en Febrero

    de 2011

●  La Audiencia Previa de la primera instancia se celebró el pasado 12 de Enero de 2012

●  4  días completes de juicio se han señalado para los próximos 21, 22, 23 & 24 de 

    Mayo de 2012

Un juicio de cuatro días tendrá lugar en el Juzgado de Primera Instancia de Hellín los próximos 21, 22, 23 & 24 May de 2012 en relación a una demanda de 1000 page que se interpuso en este Juzgado en Febrero de 2011 contra el promotor inmobiliario Cleyton GES SL y Caja de Ahorros del Mediterráneo en nombre de 47 miembros del caso y grupo de acción FINCA PARCS.

Estas cuarenta y siete personas pagaron sus cantidades a cuenta en compraventas sobre plano sumando un total de 1.5 millones de Euros en las promoción Las Higuericas Finca Parcs en cuentas que la promotora CLEYTON GES SL tenía abiertas en la CAM. 

Ninguno de los miembros de este grupo recibió la garantía que les correspondía legalmente de acuerdo con la ley española 57/68.

La promoción de interior, cercana al pueblo de Agramón, se encuentra a unos 15 km de Hellín y a 80 km de Albacete y Murcia. A pesar de hacer publicidad sobre la promoción durante un tiempo de unos cinco años como un resort donde practicar internamente deportes y ocio, el promotor abandonó el proyecto en Mayo de 2009 afirmando que se trataba de un proyecto financieramente inviable.  La zona, con 617 parcelas divididas en 5 fases aún continua abandonada con solo 50 propiedades de la fase I finalizadas,  debido a defectos del terreno que no fueron si quiera advertidos por el Ayuntamiento de Hellín cuando emitió las licencias de primera ocupación.

Caja de Ahorros del Mediterráneo, Caja recientemente adquirida por Banco de Sabadell al precio de un euro y descrito por el Gobernador del Banco de España en una rueda de prensa en Septiembre de 2011 como “LO PEOR DE LO PEOR” son los codemandados en el caso.

CAM fue la entidad financiera que aceptó cantidades a cuenta en estas compraventas sobre plano y que fue contratada por el Promotor Cleyton GES SL para la emisión de las correspondientes garantías.

EL GRUPO

EL GRUPO FINCA PARCS fue formado en 2009 por su líder, Keith Rule, y está compuesto de compradores individuales, la mayoría de ellos del Reino Unido, Irlanda y España. Los representantes legales del grupo son María Luisa de Castro, directora de CostaLuz Lawyers y Jaime de Castro, director del bufete de abogados De Castro Gabinete Jurídico, ambas empresas con sede en Algeciras.

AUDIENCIA PREVIA

La Audiencia Previa tuvo lugar en el Juzgado de Primera Instancia de Hellín el pasado 12 de Enero de 2012.

El líder del grupo, Keith Rule, presente en la Audiencia, afirma: 

“La Audiencia duró alrededor de una hora y todas las pruebas que proponíamos en nuestra demanda y que presentamos aquel día fueron admitidas por el Juez. La CAM, haciendo usos de su derecho como demandada en el proceso propuso la asistencia de los 47 reclamantes en persona los días del juicio en Mayo.  Ya que algunos contratos fueron firmados por varias personas, como resultado es posible que alrededor de 60 personas viajen al efecto a España para asistir a este juicio”

JUICIO

Keith continua diciendo, “Es fantástico que el juicio se halla fijado para Mayo, solo cuatro meses después de la Audiencia Previa.  Lo normal en estos casos es  que exista un intervalo de tiempo de 9-12 meses entre la Audiencia Previa y el juicio. Haremos todo lo posible para que todas las demandantes puedan asistir. Será un ejercicio enorme en términos de logística ya que habremos de organizar vuelos, transporte y alojamiento en Hellín para los 60 que somos, nada más que otra de las dificultades por la que el grupo ha pasado desde que sus miembros pagaron sus depósitos hace ya seis años”.

EL PODER DE LA GENTE

No es del todo normal que los 60 demandantes sean llamados personalmente a juicio ya que ya habían otorgado poder a sus representantes legales. La venida de 60 reclamantes a comparecer en juicio en los Juzgados de Hellín para un juicio que durará cuatro días, es algo que de seguro va a captar la atención de los medios de comunicación.

El Juzgado de Hellín es más bien pequeño y quizás necesite instalaciones adicionales para alojar a tan gran número de demandantes a la vez.

Reg Matthews, miembro del grupo comenta: “Tenemos muchas ganas de ir a juicio. Tanto el promotor como el Banco aún siguen poniendo obstáculos en el camino a lo largo de esta gran batalla por la devolución de nuestro dinero, pero no nos cansaremos. Ha sido una larga lucha pero estamos seguros de que la Justicia se hará”

INEXISTENCIA DE AVALES BANCARIOS - GRAN PROBLEMA EN ESPAÑA

La situación en la que se encuentran los miembros del GRUPO FINCA PARCS es parecida a la que experimentan muchos otros compradores sobre plano en España.

500 víctimas de Falta de Avales Bancarios en Compraventas Sobre Plano se han puesto hasta el día de la fecha en contacto con la petición BANK GUARANTEES IN SPAIN cuya website es:  www.bankguaranteesinspain.com

En la actualidad ya existen variados ejemplos de Sentencias de Audiencias Provinciales (Santander, Cantabria, Burgos, Alicante, Murcia), del Tribunal Superior de Justicia de Navarra y de diversos juzgados de primera instancia en la que los jueces han fallado en contra de los Bancos ante la inexistencia de los avales bancarios que la ley establece como irrenunciables para los compradores de acuerdo con lo que establece la LEY 57/1968.

PRESS / MEDIA RELEASE

FINCA PARCS ACTION GROUP – 4 DAY TRIAL IN MAY 2012 FOR LAWSUIT FILED AGAINST SPANISH DEVELOPER – CLEYTON GES SL AND THE FUNDING BANK OF THE DEVELOPMENT - CAJA DE AHORROS DEL MEDITERRÁNEO

FOR IMMEDIATE RELEASE

FINCA PARCS ACTION GROUP

● No legally required Bank Guarantees for Off-Plan deposits totalling 1.5 million Euros
● Lawsuit against CAM Bank & developer Cleyton GES SL filed in February 2011

● First Instance Court Preliminary Hearing held on 12 January 2012
● 4 Day Trial set for 21, 22, 23 & 24 May 2012

SUMMARY

A 4 day trial will take place in the First Instance Court in Hellín on 21 to 24 May 2012 in relation to a 1000 page Lawsuit filed in February 2011 against property developer Cleyton GES SL and Caja de Ahorros del Mediterráneo on behalf of 47 members of the FINCA PARCS ACTION GROUP.

The 47 group members paid their Off-Plan deposits totalling 1.5 million Euros for properties at the Las Higuericas Finca Parcs development to CAM Bank accounts opened by the developer Cleyton GES SL.

None of the group members received the legally required Bank Guarantees in accordance with Spanish Law, LEY 57/1968.

The inland development, close to the village of Agramón, is around 15km from Hellín and 80km from Albacete and Murcia. Despite marketing the development for 5 years as a self contained sports and leisure resort, the developer Cleyton GES SL abandoned the site in May 2009 stating that the project was ‘financially unviable’. The site with 617 plots divided into 5 Phases still remains abandoned with just 50 Phase 1 properties completed, however due to site defects not even these properties were issued with the Licence of First Occupation by the Hellín Town Hall.

Caja de Ahorros del Mediterráneo, the bank recently purchased by Banco Sabadell for One Euro and described by Banco de España Governor, Miguel Angel Fernández Ordoñez at a Press Conference in September 2011 as the ‘WORST OF THE WORST’ are the co-defendants in the case.

CAM, the Bank that accepted the off-plan deposits was also contracted by the developer Cleyton GES SL to issue the corresponding Bank Guarantees.

THE GROUP

FINCA PARCS ACTION GROUP formed by group leader Keith Rule in 2009 consists of individual buyers mainly from the UK, Ireland and Spain. The group is legally represented by María Luisa de Castro, director of CostaLuz Lawyers and Jaime de Castro director of De Castro Gabinete Jurídico both based in Algeciras.

PRELIMINARY HEARING

The Preliminary Hearing took place in the First Instance Court in Hellín on 12 January 2012.

Group Leader, Keith Rule, who was present at the hearing, said:

“The hearing lasted for around one hour and all the evidence contained in our Lawsuit and presented at the Preliminary Hearing was allowed by the Judge. CAM Bank, as is the defendants legal right in such cases, stated that it was their intention to call all 47 claimants to appear in person at the Full Trial in May. As some contracts are in joint names the result is that we will have around 60 individuals travelling to Spain for the trial”.

FULL HEARING

Keith continues, “It is fantastic that the Full Trial is scheduled for May as this is just 4 months after the Preliminary Hearing. It is normal in these cases for a delay of between 9-12 months between the Preliminary and Full Trial. We will do everything possible to ensure all individual claimants are able to attend the Trial. It will be a huge logistical exercise as we will need to organise flights, transport and accommodation in Hellín for the 60 of us, but this is just another hurdle that the group has been subjected to since paying our deposits in good faith 6 years ago”.

PEOPLE POWER

In such cases purchasers who have signed a Power of Attorney with their Lawyer are not normally called in person to attend the trial. The prospect of 60 individual claimants appearing in person at the local court in Hellín for a trial due to be heard over 4 days is sure to increase media interest in the case.

The court in Hellín is relatively small and may need to provide extra facilities to cope with such a large number of claimants all at one time.

Reg Matthews, a member of the group comments, “We are looking forward to having our day in court. The developer and Bank still continue to put obstacles in the way of our fight for the return of our money, but we will not give up. This has been a long battle but we are sure that one day justice will be done”.

FAILURE TO ISSUE BANK GUARANTEES - HUGE PROBLEM IN SPAIN

The situation in which members of the FINCA PARCS ACTION GROUP find themselves is similar to that being experienced by many off-plan purchasers in Spain.

500 victims of Off-Plan Property Bank Guarantee Abuse have so far provided detailed evidence to the Bank Guarantees In Spain Petition which can be found on the BANK GUARANTEES IN SPAIN website at: www.bankguaranteesinspain.com

There are now several instances of Provincial Court Judgments (Santander, Cantabria, Burgos, Alicante, Murcia etc.), the Supreme Court of Navarra and various First Instance Courts in which Judges have ruled on the liability of the Banks according to LEY 57/1968.