14-year prison sentence for the person responsible for the Luxury House real estate mega-scam

PalmThe Second Section of the Provincial Court of the Balearic Islands has sentenced the main defendant in the Lujo Casa real estate fraud case to fourteen years and nine months in prison, ordered to pay a fine of six euros per day for 45 months and a fine of 457,872 euros. The Court considers CGR responsible for a continuing offense of aggravated fraud, membership in a criminal organization, fraudulent insolvency, and money laundering. The Court found it proven that they offered future homes en masse without having the land, licenses, financing, guarantees, or a special account, concealing all of this from the buyers. The judges also sentenced his partner, MP, as a co-perpetrator of aggravated fraud, membership in a criminal organization, and co-perpetrator of money laundering, to nine years in prison; a fine of six euros per day for 18 months; and a fine of 64,000 euros. According to the ruling, MP contributed consistently to the client acquisition strategy by providing commercial infrastructure and an appearance of solvency. The court has sentenced JAMP to four years in prison for belonging to a criminal group, aggravated fraud, and money laundering; to pay six euros a day for six months; and to pay a fine of 9,690.83 euros. According to the judges, JAMP, through a technical plan and on-site support due to his professional background in the construction sector, reinforced the project's credibility with buyers and ensured the continuation of trust after the contracts were signed. The court also sentenced BVRA and SRP to nine months in prison for money laundering, plus fines of 30,170.13 euros and 21,970.75 euros respectively, as agreed upon with the prosecution at the start of the trial. Furthermore, the judges acquitted JABC, PLSG, and JCSG of the charges against them. According to the ruling, the convicted parties will have to compensate 115 victims for the full amount of damages caused, ranging from €123,670 to €700, totaling more than two million euros. "Lujo Casa was founded with a clear lack of capital, with a negative net worth as early as 2016, undertaking a very high number of developments, around thirty, whose overall economic volume is completely disproportionate to its own resources and the financing actually available," the judges stated. The Court found a massive fundraising effort from buyers without the necessary legal or economic infrastructure to meet the commitments made and, therefore, "with full knowledge from the outset that the contracts with the buyers would not be fulfilled." According to the ruling, in many cases Lujo Casa did not even own the land where the developments they offered to the victims were located. Nor did they possess "new building permits, nor were there any records of advanced administrative procedures that would substantiate, with any degree of truth, the claims made to buyers regarding the imminent start of construction or the rapid granting of permits."

The judges point out that none of the sums handed over by the victims, which total more than three million euros, were deposited into a separate special account, nor were they secured by a bank guarantee or surety bond, despite the fact that these were off-plan properties intended in many cases as primary residences.

In short, the Court states that the facts constitute a continuing fraud. "Over a prolonged period, the same pattern of conduct was repeated: offering off-plan properties in different developments, with the same advertising and sales pitch and a similar concealment of the projects' unfeasibility, obtaining down payments from a large number of buyers," they emphasize. The Court notes that "the number of victims and the total amount defrauded, which far exceeds three million euros, give the act a significance and relevance that far surpasses that of simple fraud, fulfilling the aggravating circumstance of the notorious severity of the economic damage." The ruling is not final and may be appealed.