A special investigation by Richard Osley reveals a scam which has made
conmen rich by sub-letting council flats that should have gone to needy families

SWINDLERS are netting thousands of pounds by illegally renting out council homes in a scam which is clogging up the waiting list for accommodation.

Camden Council has recovered 45 properties in the last 12 months from the hands of swindlers but a council insider confirmed: “We do not how big the problem is.” The New Journal can reveal that fraudsters who have obtained council tenancies are then renting the flats out in a lucrative sub-letting sideline.

Meanwhile homeless families are stuck in bed and breakfast accommodation while they wait for homes to become available.
The council insider said: “Some of the fraud is very well hidden and difficult to prove. It might be that two tenants move in together and instead of giving up one of the properties they begin sub-letting it out.
“People are shrewd and they know there is a lot of money to be made.”
Average council rent for a three-bedroomed flat is about £77 a week. But on the private market such a flat could fetch £200 a week.
Some of the council’s most coveted properties in Holborn are a particular lure for the swindlers but sources have confirmed the problem is prevalent across the borough.

Scams have been uncovered in Gospel Oak, Camden Town and King’s Cross.

Other cheats have been found living in private accommodation, or in homes outside the borough. Investigators revealed that the hunt for rogue tenants has led them across the country and as far afield as Spain.

In the latest swindle, tenants who suspect Camden is investigating their operations are trying to escape penalties by seizing properties through their right-to-buy options.

“If we lose them like that then we will never get them back,” a council source said.

Camden has hit back by bringing a string of rogue landlords to court and has successfully obtained rent arrears and possession orders on their homes. A highly-placed source said: “I’ve worked out that we have saved the council over a million pounds. We have to stop more resources being lost.”

Speaking to the New Journal, Malcolm Jackson, from Camden’s illegal occupancy team, said: “What motivates me is the time people spend on the waiting list for homes because of somebody else’s greed. To keep a family in a bed and breakfast costs £15,000 a year and they shouldn’t be there.”

Mr Jackson – known as The Rottweiler among colleagues because of his door-to-door inquiries – added: “We’ve had one tenant who was living in Kingston-on-Thames. Another was living in Lincolnshire. We took one man to court and he was living in Spain. They come up with all sorts of excuses.”

He added: “Sometimes the tenants who are renting the flats don’t know they are renting out council homes because the actual tenants will come and collect the rent so regularly.
“At the moment they can be advertised in letting agencies because there is no law at present to say an agency must be shown proof of ownership.”

The team of investigators trawls family records for clues hidden in scores of birth and marriage certificates and school records.
“They are now hoping that neighbours of suspected illegal occupants will ring a hotline set up to gather intelligence on where the racket has spread to,” added Mr Jackson

“It is not a case of grassing them up. All tenants know how long they waited on the waiting list. In a good week we will get ten to 15 calls. Every call is investigated.”

Tip-offs also come from the district housing office and the police, although anti-social behaviour and criminal activity are not always indications that the property is a rogue let.

“In a lot of cases they don’t want to draw attention to themselves. They can be model tenants. In some cases we know that a flat is being sub-let but we can’t prove it. We can only bring a case to court once we think we have enough evidence to convince the judge,” Mr Jackson said. It is understood that swindlers are hoping to cash in on flats on the Maiden Lane Estate in King’s Cross because rents are expected to become more lucrative when the redevelopment of the area is completed
Mr Jackson said: “There was one case where a tenant tried to buy the flat he was subletting on the Maiden Lane estate for £75,000. They think it will be a potential goldmine when the rail link is finished.”

The New Journal revealed in April how a fraudster renting out a two-bedroom flat in Holborn had been ordered to repay £5,928 in rent arrears by justices at Clerkenwell County Court. Investigators proved the tenant had been living in Southwark with his wife and daughter.
In another case a rogue landlord in King’s Cross who rented out a council flat to two students at the London School of Economics raked in more than £4,000 a month. The money was untaxed and the offender was also claiming benefits.

Investigators also recall a Mr Big who was collecting rent from up to six flats in Gospel Oak.

A fraudbuster, who did not wish to be named, said: “He used to drive around in a Mercedes collecting all the rent from the flats but it was difficult for us to get the evidence at first.”

After tip-offs, the unit later snared the swindler and recovered the properties. Mr Big escaped justice by fleeing to Eastern Europe. Further court cases are in the pipeline but Camden is now hoping tougher penalties will be handed out to sub-let racketeers.

Mr Jackson said: “We are talking with our legal team to see whether we can press criminal charges under the Theft Act and the Illegal Attempts Act. This could then lead to a prison sentence.”