TROUBLED ALICANTE bank CAM was accused of corruption and fraud during a Spanish court drama involving 1.5 million euros in house deposits it was trusted to safeguard.
It is alleged the bank – Caja de Ahorros del Mediterraneo – failed to comply with Spanish law and issue bank guarantees to people, many of them Brits and retired, buying into a luxury lifestyle development.
Judge Consuelo Romero is expected to deliver a verdict in the coming days, a result eagerly anticipated by victims of other ‘off plan’ homes in the Costa Blanca and across Spain who have lost money because of failures of banks to guarantee funds.
Described by the Spanish press as the “trial of the year” in Hellin, Albacete, the action was brought against CAM and developer Cleyton GES by the Finca Parks Action Group.
The law states deposits must be held in ‘special accounts’ and the money only used for the purpose of building houses – in this case 600 homes in ‘real Spain’, a lifestyle and sports resort at Las Higuericas Finca Parks, a village near Hellin.
Around 70 homes were completed – but have never been occupied – but the action group maintains around 100 purchasers were issued any guarantee, although another 300 people were granted the protection, after paying their deposits between 2004 and 2006.
The case is about recovering the funds from the bank. Construction ended in 2009 when the developer pulled out saying the resort, funded by the bank, was financially unviable.
During the two-day hearing, CAM lawyers argued the bank had no contractual relationship with the purchasers and it was the developer who had mishandled money from the special account.
However, the action group’s legal team said the victims had been “harmed” by the failures of both the bank and Cleyton GES and as the only financial entity involved, CAM “should be condemned” jointly and separately with the developer.
Keith Rule, of the Finca Parks Action Group, said 71 members made the journey to attend court and were “very confident” the judge would order the bank to repay the money at the climax of a battle stretching several “very stressful” years.
“The problem we have and the nightmare it has turned into have nothing to do with the people of Hellin but everything to do with CAM and the developer,” he said.
Keith said the Governor of the Bank of Spain had already described CAM as the “worst of the worst” and added: “We are the victims of corruption within CAM and we have a very strong case.
“The bank says it has no relationship with us but our relationship with Cam is set in Spanish law – the only financial entity of this project and the only one receiving deposits and issuing guarantees.”
He said victims, who had seen “ a dream turn into a nightmare”, had only paid money to CAM. “Money that under Spanish law could only be spent building houses yet there is proof money was used to buy cars and pay company bills and wages.”
And he said the bank had been negligent and failed to show due diligence and failed to monitor the actions of the client, the developer.
“This is why we believe CAM should be made to repay money in full with interest and our legal costs,” said Keith. “We are the innocent victims of this corruption.”
Keith can be contacted via the website www.fincaparcsactiongroup.com and is also the driving force behind the wider lobby group fighting for compliance with Spanish law over all off-plan deposits, www.bankguaranteesinspain.com