Things have been going downhill for the notorious Spanish developer Aifos ever since its bosses were arrested and charged for bribery in the ‘Malaya’ police operation into municipal graft in Marbella in July 2006. After 3 years of declining business the company has just been forced to seek protection from its creditors, with 1 billion Euros in debts, and now the public prosecutor is trying to put Aifos president Jesús Ruiz Casado, and his wife, María Teresa Maldonado, behind bars for fraud.
The public prosecutor has taken up a criminal action requested by a group of 14 Aifos clients claiming they have been swindled by the developer. A court in Malaga has agreed to hear the case, in which Aifos is accused of making false promises when selling homes off plan without building licences.
Alleging fraud, the prosecutor is seeking 7 years for both Ruiz Casado and his wife, and fine of 16,200 Euros for breaking consumer protection laws. If the claimants win, Ruiz Casado will also have to return deposits and stage payments ranging from 25,900 to 118,000 Euros, and pay each of the claimants 3,000 Euros in damages.
In recent years angry clients have taken out numerous civil cases against Aifos, in many cases leading to court orders for the company return money to clients who never received the properties they paid for. False promises have been standard practise at Aifos, reports the Spanish daily El Pais, pointing out that Aifos now faces 891 legal actions demanding repayments of money.
The difference this time is that the claimants have managed to get the public prosecutor to accept a criminal case against the owners of Aifos – the first time this has happened.
The claimants say that, between 2001 and 2002, Aifos signed sales contracts for projects in Rincón de la Victoria and Torrox, both in Andalucia, claiming that construction was already underway and that delivery would take place within 20 months. In reality Aifos didn’t even have building licences for the projects, and Ruiz Casado and his wife simply pocketed the 590,000 Euros they took in deposits and stage payments, claims the prosecutor.
As things stand, Aifos has 3,115 sales contracts outstanding, of which only 1,206 are finished properties. In its 11 years of history, Aifos is reported to have built 17,000 homes in Andalucia, Murcia, the Valencian Region, and Catalonia. Aifos specialised in holiday homes at the cheaper end of the spectrum.