The Serious Fraud Office (SFO) has been called in to investigate Harlequin Property, a UK-based overseas property sales agent that is not regulated by the Financial Services Authority (FSA), according to reports.
Up to 3,000 Britons have poured up to £250m of their savings into the scheme run by Essex-based Harlequin Property, which has promised to build 6,000 luxury villas in St Lucia, St Vincent, Barbados and the Dominican Republic, but has so far only constructed 300, according to the Mail on Sunday.
Arnhim Eustace, opposition leader in St Vincent, has now said that he understands the SFO has been called in to investigate the matter.
Two building companies and seven individuals contacted him to say they were owed money by Harlequin.
He told the Mail: "I appealed to Harlequin to pay them, but with no result."
David Ames, 61, who runs the company with wife Carol, also 61, and son Daniel, 35, from a business park in Basildon, strongly denies misleading investors.
He told the Mail he has been duped by contractors which are now the subject of legal action and that all the projects will eventually be completed.
The SFO said it could "neither confirm nor deny" whether it is investigating Harlequin.
IFAonline has previously reported that Harlequin Property is having problems issuing payments due under the terms of its agreement to investors who re-mortgaged their homes in the UK to invest in the scheme's Caribbean properties.
The Financial Services Authority (FSA) has also issued an alert to financial advisers about investing clients' money in Caribbean property through Harlequin Property.
In the alert, the FSA highlights that it has seen an increasing number of self-invested personal pension (SIPP) schemes whose underlying investment is in an overseas property purchased through Harlequin.
The FSA warns advisers to ensure they give "careful consideration" to the particular features of an investment through the company.
In order to make sure a recommendation to invest in an overseas property investment is suitable for their customers, the FSA expects advisers to have undertaken thorough due diligence on the various developments being sold through Harlequin to fully satisfy themselves that it is a suitable investment, taking into account all relevant factors.
This should involve consideration of how building work is progressing on the various sites and any factors involved in reported delays to completion.
Advisers must also establish precisely how their clients' funds will be used during the construction phase and the terms of their purchase agreements, and make a full assessment of all publicly available information about the overseas property investments through Harlequin and on all the parties associated with these investments.
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