A major real estate fraud case has emerged in Germany, with the Hanover public prosecutor’s office filing charges against Charles Smethurst, the founder of German Property Group (GPG). The alleged scam, valued at over €56 million, has left thousands of international investors facing massive financial losses.
Background: The Rise and Fall of German Property Group
Founded in 2008 as Dolphin Capital GmbH, the company underwent several rebrands, becoming Dolphin Trust GmbH in 2014 and finally German Property Group GmbH (GPG) in 2019.
GPG specialized in acquiring and redeveloping listed historical properties across Germany. Investors from the UK, Ireland, South Korea, and other Asian nations were promised high returns and tax benefits, making it an attractive opportunity—until the scheme collapsed.
How the Alleged Fraud Unfolded
Authorities claim that GPG’s business model was unsustainable as early as 2015. Instead of completing property renovations, the company allegedly:
- Used new investors’ money to pay old investors, resembling a Ponzi scheme.
- Allowed many historical properties to decay, despite collecting funds for renovations.
- Continued soliciting investments even after recognizing insolvency in 2018.
Investor Losses and Property Neglect
The fraudulent activities have caused significant damage:
- Thousands of investors—especially from abroad—have suffered major financial losses.
- Historical properties like the Dwasieden Castle ruins (Rügen) and buildings in Bamberg were left in disrepair instead of being restored.
Legal Proceedings and Next Steps
After nearly four years of investigation, authorities have officially charged Charles Smethurst with 27 counts of commercial fraud. The Hildesheim Regional Court will determine the next legal steps.
This case highlights the importance of due diligence in real estate investments and the need for stricter oversight to prevent similar scams in the future.
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