sean murray

Carlauren Group

Carlauren Group 2000 1333 Adam

Carlauren Group sells bedrooms to investors in what it primarily describes as “care facilities” e.g care homes.  An associated Carlauren company then rents those rooms back from investors paying an annual rent e.g 10%.  So…. an investor buys a room for £100,000 and receives £10,000 per year in rental income.  It sounds a pretty good deal to most investors.

Following our letter to investors in which we made a number of negative statements about the investment, Sean Murray and Andrew Jamieson, the key men in the company, have responded.  In the interests of fairness we are publishing below some of our statements and the Carlauren response.  We made a lot of statements so we will publish more in later blogs.

Statement 1:  “The majority of the Carlauren Group companies are heavily in debt. Many of those debts have been secured against the communal areas which investors do not own””.

Carlauren Response:  “Carlauren uses Together Commercial Finance Ltd to initially purchase its properties and immediately settles its lending within weeks of completion by our clients. We can tell you that no Carlauren properties held under Carlauren Group Ltd have any lending whatsoever from Together Commercial Finance Ltd (“TCF”)”.

Our Reply:  We think you are being clever with your wording Mr Murray.  Carlauren Group Ltd does not own the freeholds to any properties so we agree it has not incurred any debts.  However, each property is owned by a separate SPV company and there are more than 20 of them.  Those companies have the debts.  The records of charges filed at Companies House show that in the main the purchase of the properties is financed by TCF exactly as Mr Murray describes.  The records also show that in the main the debt is paid off with money raised from investors, exactly as Mr Murray describes.  There is a good reason for that.  The original debt is against the entire property and some bedrooms have now been sold therefore the debt must be cleared.  However, once the debt is cleared the Carlauren SPV then takes out further debts from TCF.  Each time the security is the property’s communal areas which the Carlauren SPV owns.  Many of these debts have been taken out in 2019.

Statement 2:  “We can prove the investments were mis-sold to investors at inflated prices”..To support this statement we provided details of three randomly selected Carlauren properties.  Let us look at one of them – Rosewell Country Home.  This property was closed when CHF 2 Ltd bought it in March 2017.  It is still closed.  CHF 2 Ltd paid £1.3m.  It sold the bedrooms off to 51 investors for £5.4m.  In January 2019 CHF 2 took out a debt against the communal areas.  The lender was TCF.  Companies House records and Land Registry records show that debt is still outstanding.

Carlauren Response:  “Property hotel value is based on the trading of it, along with the land value.  The valuation consists of a land value and a trading value”.

Our Reply:  Yes, but this property was closed when Carlauren bought it and has remained closed.  There is no trading value.  However, the good news is that until recently 51 investors have been receiving their 10% rentals on the closed property.  That means they have received more than £1m in rentals from a closed, non-trading hotel.  This brings us to Statement 3.

Statement 3:  Investors were paid rentals from their own money and from the money of new investors.  We have seen this many times and on each occasion the investment turned out to be a Ponzi Scheme.

Carlauren Response:  NO COMMENT.

Finally we would like to draw attention to the Carlauren letter of 10th July 2019 in which they state:

“In other news, the company has now started its retail international holiday sales programme beginning with China.  Our loyal partner, Paul Murphy is in transit today to meet with China’s most prestigious holiday outlet supplier…..”

Aaaah…… Paul Murphy the loyal partner.  Some of the people who have been lucky enough to meet Paul Murphy have confirmed that he is the Paul Daniel Murphy in this newspaper report (2nd row on the left).  He was sentenced to 6 years in prison for investment fraud. 

He seems to have the perfect credentials to be a “loyal partner” of Mr Murray and Carlauren Group.

The letter of 15th July 2019 from Sean Murray and Andrew Jamieson is an attempt to scare investors into thinking that an independent administrator is going to charge £350,000 per month for their work. That is just ridiculous. Yet in the same letter after stating “administrators do not work for free” he says that he is considering potentially appointing administrators !

Investors need to be very wary of supporting an administrator appointed by company directors. A Carlauren administrator would be tasked with protecting the company directors and not in finding out where investors’ money has gone.

To view our previous post on Carlauren Group please click HERE

Carlauren Group

Carlauren Group 2000 1333 Adam

Safe Or Scam, in collaboration with a business recovery and insolvency practitioner firm, and a respected UK law firm, has informed investors in Carlauren Group properties of an action designed to protect, preserve and potentially recover their investments.

Carlauren Group has sold individual rooms which it describes as “care studios” in more than 20 properties. The company has raised more than £80 million from ordinary investors with the promise of guaranteed rental levels. Three months ago the rental payments stopped.

Carlauren Group is controlled by one man – Sean Murray.

Even if all the properties were sold investors would not recover their money. The typical Carlauren model was to buy a property for 1X and then sell individual bedrooms to investors for a total of 4X. So a property which cost £1m would have the bedrooms sold off for £4m. It is a shocking model with only one aim in mind.

To make matters worse, Carlauren would then mortgage the communal areas in which they have retained ownership in order to raise more money.

Lenders are not stupid. They would have secured themselves in first position. In many cases, if not all, the refurbishment of properties was carried out by a building company owned by Sean Murray. We suspect that Sean Murray is now a very rich man.

One might have expected that these mortgages on the communal areas would have resulted in the money being used for the property. One would have been wrong. The charges often show that whilst the mortgages were secured against one property, the “borrower” was another entirely separate Carlauren company. In other words, the value in one property was being mortgaged to purchase another property for which Carlauren could then sell off those rooms at grossly inflated prices. It was a regular conveyor belt of properties each generating 4X the purchase value every time by selling overpriced rooms. This is all very indicative of a Ponzi Scheme.

Interesting that there is one “go-to” lender in all of this.

It is impossible that investors will recover their full investment from the sale of the property portfolio. The best outcome for investors is to place the portfolio into administration so that it can be properly managed by professionals whilst a full investigation is undertaken into Sean Murray, his management team and the sales network.

We expect this to result in legal claims against the parties involved. Any investor who considers buying a room in any large property, whether that be a care home or a hotel, needs to stop and reconsider. These are terrible investments which we can almost guarantee will end in failure.

Safe Or Scam is involved in investigating other hotel and care operators.

To read our previous blog entry on Carlauren Group please click HERE.

To read our later blog on Carlauren Group please click HERE.

 

The Care Home Group

The Care Home Group 150 150 Adam

THE CARE HOME GROUP / CARLAUREN GROUP

The Care Home Group Ltd is part of the Carlauren Group Ltd and offers investors the opportunity to purchase individual bedrooms in care homes. The business model is very similar to that of companies which offer hotel rooms to investors, except for the fact that The Care Home Group Ltd offers investors a choice of income options. In our opinion this is a very high risk investment. If the company operating the care home walks away or goes bust, the investor is left with one room in a large building which would be almost impossible to sell. Any prospective purchaser would have to deal with 30, 40, 50 or more separate room owners, often spread around the world with different expectation levels, and this would inevitably result in a much lower sale price for the home. There is a genuine danger that the empty care home would deteriorate without ongoing maintenance which, in most cases, investors would be expected to finance. What is worse with a care room investment compared to a hotel room investment is that a failure of a care home drastically affects the lives of vulnerable people. In a hotel situation the hotel just declines to take any more bookings. In a care home there will be elderly residents faced with uncertainty and having to move to a new home.

When we see “guaranteed buy-back” schemes it always raises a red flag with us. More often than not the company contracted to buy-back the unit does not have the funds to do so. By the time the buy-back is due the company has found a way out of it or has dissolved and doesn’t exist anymore.

If you or I were to buy a house we would be able to obtain an independent valuation on the property. However, room investments invariably have no independent valuation of the room. How can a valuer assess the value of a care room which is wholly dependent upon the quality and longevity of the care home operator ? When an investor buys a room they are not actually buying a property although it is made to look like that. They are buying into the care home business itself because without the business the room is virtually worthless. It seems to us that too many operators make up the valuation based on what they say they will pay in rental e.g if they promise to pay rental of £10,000 then a room in their eyes is worth £100,000. If they promise to pay £8,000 in rental then the room is worth £80,000 and so on. There is no sense in this approach because if the company goes bust and pays NIL in rental then it suggests that the room is worth nothing, which ultimately is not going to be too far from the truth.

Who owns TCHG and Carlauren Group ? When you strip it down to bare bones it is one man – Sean Murray. Mr Murray also owns a private jet business and has more recently moved into establishing a bizarre cryptocurrency based on his own business. In the future, the families of residents in the care home will have to buy his cryptocurrency and pay for care services using this currency. What on earth is going on ? How long will it be before the rental income paid to investors will have to be paid in Mr Murray’s strange cryptocurrency ? So….. in a nutshell, families will pay genuine cash for a cryptocurrency fabricated by Mr Murray. Does this sound normal to you ? It rings alarm bells with us. We are already involved in exposing dodgy cryptocurrencies and trying to recover investors’ money from those kinds of investments. We will be following this new scheme very closely.

We are inviting investors in Carlauren Group, The Care Home Group and indeed any other care home room investment to contact us with details of their investments. We believe the schemes may breach Financial Conduct Authority regulations and may be unlawful. We are looking into these aspects.

If you would like to read about some of the risks involved in owning rooms within a larger premises please take a look at this BLOG.

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