Fancy investor dinners, offices around the world, company-branded cars and heaps of glossy brochures celebrating the business model. It was enough to convince thousands of British savers to invest some £320m in a toxic investment that since collapsed.
German Property Group, more commonly known as Dolphin Trust, sold loan notes to fund the purchase and renovation of derelict German buildings. It filed for bankruptcy last July, taking with it millions in investors’ money.
Telegraph Money has since found it deliberately cheated British investors, who bought in on the promise of 15pc returns per year.
Jack Peters, whose name has been changed, lost his life savings after investing more than £1m. Mr Peters, said he feared he would never see his money again and called the investment a “manipulative and elaborate confidence trick”.
He began with a £100,000 investment after flying to Germany to see properties being renovated. Mr Peters received £12,000 in interest that year and all his money back, so he invested again, with £300,000. Each time the loan notes expired, he invested more.
He said: “You really believe you are on to a good thing. If you see the colour of your money, you put more in. It was all so convincing, they picked you up in a company car. You thought you were dealing with a big business. I saw a project that was half-finished and the next time I went out there, it was all done. It all just made sense.”
Mr Peters said his family and friends started to ask where he was getting his money and also invested.
He said: “My mum put her pension into it, my brother put money from the sale of a house and my cousins also invested.”
The investment group hosted lavish dinners in Pall Mall and invited clients to a box at Tottenham Hotspur football matches and golfing days, according to Mr Peters.
Howver, one day in 2019, he and his family stopped receiving interest payments and soon saw reports of suspected wrongdoing. “Last summer, when the company collapsed, we saw a story suggesting it was a scam, but we doubted it because it had been running for so long and was reliable,” he said.
Mr Peters had to tell his loved ones they had lost hundreds of thousands of pounds. He said: “They were so understanding, but it has been hell. These are people who sit around my dinner table and they have lost money because of me. And on top of that, I lost all my life savings. I have lost my family’s generational wealth, my kids’ inheritance.”
Some 2,000 investors want their money back and have joined the German Property Group Creditors Association.
A spokesman said: “This was cleverly designed and engineered to convince the investor it was low risk.
“The glossy brochures showed completed developments and we were told that funds were held by a German law firm before being invested in a project. We were led to believe that the worst-case scenario might be undesired ownership of a building to renovate.”
However, it appears much of the money never arrived in Germany. Peter Mattil, of German law firm Mattil & Kollegen, who has helped investors, said authorities were struggling to track down some £1.5bn invested.
He said the liquidator had uncovered 100 properties with a value of between £200m and £300m, adding: “We don’t know where the rest of the money is; it’s all gone.”
