Ex-pats in Spain sue banks for alleged fraud

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A LAWSUIT has been launched against 10 foreign banks in Spain for alleged fraud, according Spanish daily ABC reports.

The banks, eight of them Scandinavian, allegedly made their retired clients who resided on the Costa del Sol believe that in Spain, if someone dies without a mortgage on their home, the inheritance tax is so high that the heirs would never be able to pay.

Marbella law firm Lawbird is representing more than 25 clients on the Costa del Sol and Alicante area who have taken their case against the banks to the National Court for fraud, misleading advertising, tax fraud amounting to around €50 million and document falsification.

The alleged scam was in operation between 2004 and 2008, and it is estimated that some 800 people could have fallen for it.

Some 17 bank managers and false financial agents will face charges if the case goes ahead.

When the potential victims bought a home, they were contacted by financial advisors who then put them in touch with the banks, which offered to lend them an amount almost identical to the value of their homes and the loan was signed.

The money (up to €250 million from all affected clients) was then sent to Luxembourg, being a tax haven, while the clients were assured that if it was there, their heirs would have no problem inheriting.

The clients would only receive part of the money but thought the rest would be safe until they died.

However, they were later contacted by the bank to inform them that their investment was not producing the financial gains expected and that they would have to cover the losses. After that, their mortgaged houses were due to be repossessed by the banks, although two have been prevented by Malaga courts.

By Jennifer Leighfield
[email protected]

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