Ecohouse, a fake Brazilian public housing development, used to be the most popular overseas property project among Singapore investors back in 2012. Two years later, after it closed its office at Suntec City, more than 800 Singapore victims found that the project was a scam. They lost a total of over S$50 million.
Last month, the UK police decided that there was no case for the British Ecohouse victims because “it does not meet the Action Fraud threshold for investigation” (Mirror, November 5, 2020). Meanwhile, Anthony Armstrong, the mastermind behind the Ecohouse scam, was finally arrested in the UAE. The Brazilian government was requesting for his extradition to Brazil.
Below is an article from a daily newspaper published in the Brazilian state of Rio Grande do Norte titled “MPF pede extradigao de Anthony Armstrong para o Brasil” (Tribuna do Norte, November 4, 2020). I have translated the full article from Portuguese to English with the help of google translate.
P.S. Special thanks to Andrew Batt for notifying us the development of the ordeal which will most likely not be covered by the local media here.
MPF asks Anthony to extradite Armstrong to Brazil
Published 2020-11-04
Luiz Henrique Gomes
News reporter
After the arrest of the former president of Alecrim Futebol Clube, Englishman Anthony Armstrong, in the UAE last week, the Federal Public Ministry (MPF) wants his extradition to Brazil. The extradition process was authorized by Federal Justice on October 29, but the request has not yet been formalized because the MPF needs to translate the documents necessary for extradition into Arabic. Anthony Armstrong is accused of embezzling at least R$75 million from almost two thousand investors in two years.
The entrepreneur was charged by the Federal Public Ministry together with seven other people – among them, stepdaughter Gabriela de Oliveira – in this year for committing 214 financial crimes, including money laundering and misrepresentation. With the lodging of complaints, the MPF said the businessman and stepdaughter, both were partners in a company, asked for the preventive arrest of investments abroad and then diverted them to four other companies and use them to their advantage.
According to Federal Justice, both were placed on Interpol’s wanted list after the complaint. However, before being arrested, Gabriela de Oliveira obtained a habeas corpus that annulled the request for preventive detention. On the 27th, after seven months on the run, Armstrong was arrested in the United Arab Emirates, where he was living. Federal Justice did not detail the circumstances of the arrest.
In addition to the businessman and stepdaughter, six other people were charged by the MPF. Five of them were accountants at Ecohouse Brasil, a company that captured international investments, and another is an employee of Caixa Economica Federal.
According to the complaint, the scheme took place by raising funds from international investors for Ecohouse Brasil, a civil construction company. To get the funds, they claimed that the company built houses under the federal government’s Minha Casa, Minha Vida program, and promised a 20% profit in 12 months on the capital invested. The profit would come from the sale of houses after construction.
Ecohouse managed to raise funds from 1,500 investors that moved R$75 million in two years, according to MPF. However, the company never built the houses and never even had an agreement with Caixa Economica Federal to participate in the Minha Casa, Minha Vida program. The money was diverted to four companies – Alecrim FC, a restaurant, a security company that had Ecohouse as its only customer, and another company to front Ecohouse.
In order to deceive international investors, the businessmen had a false statement that attested the company’s service provision for the Minha Casa, Minha Vida program. The statement was signed by an employee of Caixa Economica Federal (Brazil’s government-owned financial institution), charged by the MPF for misrepresentation. However, Caixa Economica Federal informed the MPF that the company never had an agreement to participate in the housing program.
According to the complaint, the alleged agreement with Caixa was available to researchers on the company’s website and provided assurance that it was a credible company. According to the testimony of a lawyer responsible for representing 400 investors, Anthony Armstrong “announced that working in the group was authorized by the Brazilian Government to popular housing program called ‘Minha Casa Minha Vida’.
The fraud also took place through false certificates made by the company’s accountants who said that the works were proceeding normally after visits to construction sites. Investors were taken to these sites to attest to the veracity of the investments, but, according to testimonies from employees of these works were never completed.
Labor rights
Anthony Armstrong’s arrest rekindles the hope of dozens of former workers at the companies he maintained in Rio Grande do Norte. Most of them ended up without a job right after the deployment of Operação Godfather and many, or almost all, were not entitled to any labor benefits. Ecohouse Brasil, for example, did not make FGTS deposits for servers.
“You didn’t pay my INSS, nor FGTS. Besides owing me three months of salaries. And look, I was one of the least affected. I remember there were people who asked for food from the company because they didn’t have a salary for a while, the refrigerator was empty and they were saying that next month they would pay,” said one of the former employees of Ecohouse Brasil who asked to keep his identity confidential. Alone for this former worker, Armstrong owed R$16,000 at the time of closing the company in Natal.
With the arrest of the businessman, they believe that Justice will block assets and valuables in bank accounts, in addition to auctions that, perhaps, are still in Armstrong’s name to pay off labor debts.
Get a free preview of my new book Behind The Scenes of The Property Market: Finding The Truths and Exposing The Lies of A Not-So-Transparent Industry. Available now at Kinokuniya and major Popular bookstores.
All his marketing scams – Louie Pinto, Aaron Sim, Wendy Kwek, etc.. all still around
This is a big loophole. Singapore investors buying overseas properties are not protected by the laws and not under the governance of MAS. Buyers are doing so at their own risks.
Thank you very much PS for bringing this latest news on the EcoHouse saga, which for those affected in Singapore will hopefully bring some consolation if not an overdue closure to finally see justice being done. It must have been a real nightmare for those who lost heavily to these conmen all these while.
However, your reader such as myself, could not help seeing this posting as purely a news reporting event, as due to the translation, a stating of the facts of the events unfolding.
Still a few things do not add up – if 800 Singaporeans are indeed affected, is it possible that these 800 made a large portion ( more than half ) of the 1,500 people being conned worldwide?
As the amount mentioned in the news involved R$ 75 mn ( which at current exchange rate of R$ 1 = S$ 0.26) is only about SGD 20 million, how is it that your post mentioned SGD 50 mn are being lost by fellow Singaporeans alone?
Perhaps a more thorough investigation and /or analysis would be able to shed more light on these discrepancies.
Meanwhile, while reporting on the article has its purpose, a more useful insight on how to AVOID such scams would certainly be welcomed by your readers to serve as valuable lessons.
As such allow me to contribute the following 4 step guide or TEST which could be useful for your readers thinking of investing:
1. Does the investment involve a scheme by promoters who are not authorized or approved by or registered with the financial authorities such such as MAS?
2. Does the investment require placing funds with “unknown” and “unverifiable” private parties or entities whose credit worthiness and trustworthiness cannot be properly ascertained?
3. Does the investment provide no liquidity or exit process other than through the same mechanism being promoted by the owners, directors and servants of the firm taking in your funds in the first instant?
4. Does the investment allow for high and/or multiple commission structure payable to multiple middlemen with or without the necessary qualifications or accreditation?
If the answer to any of the above is YES, such investment schemes and proposals should be avoided at all costs as these become too risky for the average investor.
Under the above guide, the promised rate of return, while can serve as a red flag, would be less relevant and would not be the main factor in determining the riskiness of the investment proposals since scammers always know that they can use high potential returns to attract your interests in the first place.
Similarly, potential investors should not be distracted by the modus operandi of the investment scheme or proposal as the intention of scammers is to answer all your doubts professionally and gain your confidence. This is why schemes ranging from gold bars, to ostrich farming to land banking schemes and aqua farming have been successfully used by conmen to gain the trust of unsuspecting investors and easy access to their wallets.
It is only when more and more investors are aware of the above and become better educated that such con jobs will become no longer viable. Hopefully this happens well before they are caught in a painful lesson such as the EcoHouse saga provides.
07.Dec 2020
Thank you for your comments and your interest in the Ecohouse case.
From your remarks, I bet you haven’t read my 1st book “No B.S. Guide to Property Investment” and my new book “Behind The Scenes of The Property Market”. Both books use Ecohouse as an example when I am talking about property investment scams.
If you are interested to find out more about the Ecohouse saga in Singapore, google for past PropertyGuru articles. Andrew Batt has been covering Ecohouse during his days as editor at PropertyGuru. He was also the one who alerted me of this latest news.
As the target audience of this quoted article is Brazilians, obviously it focuses on settling claims from creditors in their country rather than helping victims in foreign countries. Why do they care how much money Singaporeans has been cheated by this conman? Even our local media is not reporting anything about Ecohouse anymore as if it is a gone case. These days we only see property articles in the media that promise advertising dollars from industry stakeholders. Even if our local media care to cover Ecohouse, overseas property investment is not governed by Singapore laws and our police cannot do much to help the victims.
I am pretty sure that you are not a loyal follower of my blog either. Over the years, I have reluctantly changed the theme of my blog from sharing ideas with like-minded value investors in properties to warning inexperienced homebuyers and investors from falling into the traps in the property market. An example of such posts is “Useful tips to unmask the wolves’ sheep clothing”
https://www.propertysoul.com/2017/06/07/unmask-the-wolves-sheep-clothing/
I am aware of the fact that I have been repeating myself too many times. Well, I have done my part in my blog, FB page, youtube channel and my books. There is only so much that I can do. But there is a sucker born every minute, and a fool born after that. As some followers told me, some fools have to make their mistake before they learn their lesson.
The Ecohouse fraud was also perpetrated in the UK. Around 850 investors were defrauded with the assistance of Sanders Solicitors who acted as escrow agents for 2½ years. The Solicitors Regulation Authority (SRA) attempted to bury the fraud because it didn’t want to pay compensation to victims and risk bankrupting its compensation scheme. In the UK, claims fall back to the SRA when insurers legitimately refuse to indemnify claims because solicitors have engaged in fraud, money laundering, or when all partners in a small practice have acted dishonestly.
*** SRA Cover Up Fraud ***
https://corruptionuk.org/solicitors-regulation-authority-in-33m-cover-up/
The SRA did not even allege dishonesty against the solicitors who laundered client funds without any due diligence checks to Ecohouse when development land was not owned by the company and nothing had been built.
The SRA did not intervene against the fraud either, despite floods of complaints from Sanders Ecohouse clients – the SRA just let it continue for almost another year.
The Metropolitan Police in London have not made any arrests against ANY of the crooked solicitors after 6+ years of investigation, despite irrefutable evidence of fraud and money laundering. Since nothing had been built, it means that the solicitors released client funds using fake certificates against phantom developments – it confirms that escrow draw downs were illicit.
The Ecohouse Director and former Tory Councillor, Charles Fraser Macnamara, was subject to a 2nd disciplinary hearing before the Solicitors Disciplinary Tribunal in Sprkng 2019. The SRA were forced to bring a 2nd tribunal because CFM made an admission of dishonesty, and for all intents and purposes, money laundering, to the Insolvency Service.
Despite irrefutable evidence of CFM laundering client funds through 3 companies that he operated, the Met Police have taken no action against him in almost 2 years. One of the companies, Malta Star Mergers & Acquisitions is listed in the paradise papers.
*** CFM SDT Notes Prove Money Laundering ***
https://drive.google.com/file/d/1zn_KyFIoPfDzLOkRGkE2cyc9DpTQR8GD/view?usp=sharing
The fraud is being covered up in the UK. It leaves one wondering how many officials profited from it? Why are these solicitor scum being protected by the authorities and the Government? The authorities are all bent because they are protecting fraudulent solicitors and their brazenly corrupt regulator, the SRA.
Incidentally, Ecohouse does meet the UK threshold for Police to investigate – they just don’t act on the evidence. There has been a 6+ year investigation.
The former investigator was planning to make arrests in October 2017, but then abruptly and unexpectedly left the investigation. The Met Police never offered accountability for why no arrests took place. Someone in higher authority (I suspect meddling Government) put the kibosh on the planned arrests.
The UK is fast turning into a banana republic and fraud haven where fraudulent solicitors can get away with defrauding hundreds of clients. I blame their feckless and ineffectual regulator, which is running a protection racket for bent solicitors as opposed to a legitimate regulatory system.
Even though the SRA were found out for cheating victims of fraud out of justice, they denied them compensation against the serious act of fraud and money laundering. None of Sanders solicitors were struck off. The justice system in the UK stinks, yet the totally skewed Establishment will swear its the best in the world. The Establishment is suffering from all the usual delusions of grandeur.
Note tgat under Singapore law, anyone marketing foreign properties must be licensed under the Estate Agents Act.