A Chelmsford property developer has been handed a 14 year ban for abusing £13m investments. 

Mitchell Mallin, 34, was director of Essex and London Properties Limited.

The company targeted investors with the promise their funds would be used to purchase dilapidated properties in London and Essex before renovating them and selling them for a profit.

Over 3 years, Essex and London Properties Limited obtained more than £13 million in investments from investors.

Hundreds of people invested in the company providing funds between £5,000 to more than £100,000.

Only one property, however, was ever purchased for renovation and instead the majority of investors’ money was siphoned to overseas bank accounts.

The company was wound up in the public interest in September 2018 following an investigation by the Insolvency Service.

Read more:

The investigation found that Mallin’s company had failed to invest the £13 million and used the funds provided by new investors to directly pay returns to previous investors.

More than £4.75 million of unverified payments were also made to third parties. At the company’s winding up, creditors were owed more than £11 million.

In March, the Secretary of State accepted a disqualification undertaking from Mallin after he did not dispute he caused or allowed Essex and London Properties Limited to trade with a lack of commercial probity.

Mallin has been banned from acting as a director for 14 years which means he cannot, directly or indirectly, become involved, without the permission of the court, in the promotion, formation or management of a company.

Neil North, chief investigator at the Insolvency Service, said: "As the period of disqualification reflects, obtaining funds from investors and using them in a dishonest manner is a serious matter and contrary to the conduct expected of a company director.

"Companies have limited liability, which is a privilege, not a right and we have strong enforcement powers which we will not hesitate to use to remove that privilege from dishonest or reckless directors."