A SCAM involving fake mortgages on scores of plush Waterfront flats in Ipswich has left banks and building societies a massive £6million out of pocket, it emerged today.

A SCAM involving fake mortgages on scores of plush Waterfront flats in Ipswich has left banks and building societies a massive £6million out of pocket, it emerged today.

As revealed exclusively in The Evening Star back in August 2006, Persimmon Homes' Orwell Quay development became the target of con artists looking to cash in on the town's property boom.

It has now sensationally emerged that deals on a staggering 70 properties bought by two suspect firms have been investigated.

Police were today unable to comment on the status of the probe although the discovery of a similar scam in Thamesmead, South London, worth an estimated £40million, has led to 11 arrests.

A spokesman for Persimmon, the developers behind Orwell Quay as well as the targeted development in Thamesmead, said the firm has been helping authorities with their enquiries.

The spokesman said: “At Orwell Quay, we sold approximately 70 properties to two investment companies, which we believe are currently being investigated.

“We have received requests for information from those investigating certain purchases at Orwell Quay and have assisted and continue to assist with those enquiries.

“In all cases those seeking our help have confirmed that we are in no way implicated in any ongoing investigations.”

The spokesman said there is no known link between the scam at Orwell Quay and the one in Thamesmead.

Criminals can make hundreds of thousands by bulk buying new build apartments at massive discount while taking out fake mortgages at over-inflated prices and pocketing the difference.

They can also make money selling to genuine buyers at over the odds prices - a practice that can leave innocent homebuyers tens of thousands out of pocket when they realise the true worth of the property.

It is unclear how much money crooks made out of the Orwell Quay fraud although a report by Ipswich Borough Council estimates banks and building societies were left £6million out of pocket as a result of one suspect group of people buying up to 31 flats.

These scammers also tried to con the council out of around £50,000 in fake housing benefit claims on the properties.

This attempt was spotted by an eagle-eyed benefit assessor after a series of dubious national insurance numbers were noticed on applications.

A specialist council fraud officer was assigned to the case and uncovered the “complex and lucrative” fraud.

A report on the incident said: “It [the fraud] involved a group of individuals purchasing a number of residential units within Ipswich with mortgages obtained from banks and building societies under false pretences.

“The intention was then to 'let' the properties to bogus benefit claimants and reap the rewards from their criminal activities.

“Police are still currently dealing with the investigation but as Ipswich Borough Council have not suffered any financial loss it is unlikely that any further action will be taken against the alleged offenders.”

Have you been a unwitting victim of the scammers? What do you think? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN or e-mail eveningstarletters@eveningstar.co.uk

The transformation of Ipswich Waterfront from run-down docks to billion-pound property hot spot began in earnest in 1999 when developers Bellway began construction of luxury apartments.

Others soon followed suit and Ipswich residents have witnessed the progress as the skyline has steadily changed with old silos and warehouses coming down to be replaced by prestige homes.

The development at the centre of the mortgage swindle scandal - Orwell Quay - is one of the major landmark developments on the waterfront featuring a total of 354 apartments and townhouses.

Today's revelations indicate as many as one in five of those properties were fraudulently purchased.