Seven people have been arrested in Palma for a fraud involving the renting out of apartments, the owners of which had died or which had been seized by banks. They have been charged with different forms of fraud as well as forgery, asset stripping and disobeying judicial authority.
The elaborate plot centred on three apartment buildings in Cala Major. The ringleader was aware that some apartments had in effect been abandoned. They had, for example, belonged to foreigners who had used them as holiday homes and who had died without their being passed on to heirs. Or they were properties for which banks had foreclosed on mortgages.
The same ringleader, a one-time president of the owners' community, had undertaken some renovations at the apartments. This was designed to make potential tenants believe they were legitimate properties. The renting out was to people with limited resources and it had started in 2010. The apartments were small, under 25 square metres, and were designed for short stays rather than permanent occupation. In some instances, they were housing up to six members of the same family.
The police have established that illegal electricity supplies were created and that tenants were often subjected to coercion, which included threats to cut off the electricity. Remarkably perhaps, there were instances when tenants were taken to court, and orders were issued to evict tenants for non-payment of rent as the courts were duped into believing that the leases were legal.
One tenant was able to check the land registry and to prove that the apartment belonged to someone else. In this instance, the court ordered the property to be sealed. Despite this, the order was violated and the apartment let out again.
In addition, the gang sought the ownership of properties. They lodged false claims for non-payment of renovations for apartments where the owners had died. These claims were intended to deceive courts into believing that renovations had been requested but had not been paid for.
The seven people who have been arrested include the ringleader's wife and son. The police estimate that the fraud has been worth at least 200,000 euros, although they suspect that the amount is much higher. The son of the ringleader has a sizeable property portfolio, including houses and commercial premises.