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Law firm, Matthew & Matthew are under investigation for failing to identify the warning signs of an alleged fraudulent Ponzi Scheme operated by businessman Sean Murray. Murray operated his alleged Ponzi Scheme under a care home investment scheme in which there has been a multi-million-pound loss.

Murray founded the Carlauren Group in 2016, which consisted of 50 companies and acquired hotels, which he said was to be converted into care homes. From 2017-18, investors, many of whom were elderly, paid approximately £70,000-£100,000 for rooms in properties that were to be converted into care homes. The Carlauren Group promised fixed monthly returns from the time of the investment. The scheme also offered a guaranteed buyback of 110% of the price after five years. The monthly returns would be paid to the earlier investors, using money invested by the later investors.

In reality, these terms were wholly implausible as the properties had not even been converted yet. Many of the properties to be converted remained in a dilapidated state, and tradesmen were not paid. Carlauren Group collapsed in December 2023 and administrators were appointed.

The Serious Fraud Office is investigating the scheme, with a total of £75 million being lost by investors.

Sean Murray had previously approached another law firm, who refused to act for him as he was unable to prove that his scheme was a regulated investment scheme. There is currently a professional negligence claim against Matthew & Matthew, with the investors pursuing the firm for their lost money. Liquidators are also seeking to recover the investment money, as well as the 10% buyback and rental income promised.

The alleged fraud operated by Carlauren Group is just one example of dubious investment schemes which have come to light in recent years. Increasingly, there have been cases of investors losing significant sums of money into developments which are never built or fit for purpose.

The SRA provides guidance for solicitors to be specifically wary of property investment schemes, in particular property schemes which offer investment into care homes and holiday homes. These types of schemes often attract investors who will be inclined to invest their life savings or pension into these schemes, which have highly attractive terms. As a professional advisor, a solicitor has the positive duty to ensure that any investment scheme is a legitimate, credible scheme which can deliver on the terms it has offered investors, and not merely falsely luring investors into parting with their money.

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If you are victim of a scheme such as this, where you have invested into a scheme which has gone into liquidation or offered terms which never came to fruition, you could be eligible to pursue a professional negligence against your professional advisor, such as the solicitors or investment brokers involved in the conveyancing process.

At Specters Solicitors we specialise in pursuing professional negligence claims. We have already recovered millions of pounds for investors in similar failed investment schemes, in scenarios where buyers did not receive reasonable advice. If you believe you have been a victim of a fraudulent scheme, please contact 020 7251 9900 to learn more about how we can assist you.