NINE people have been arrested on suspicion of a �40million mortgage swindle believed to involve an Ipswich waterfront development.

Colin Adwent

NINE people have been arrested on suspicion of a �40million mortgage swindle believed to involve an Ipswich waterfront development.

The suspects are currently on bail after being quizzed by police following raids on their homes.

The alleged fraud is said to be part of an investigation into crooked mortgage deals, which could ultimately be worth hundreds of millions of pounds.

Sources in Ipswich yesterday said part of the investigation involved Persimmon Homes' Orwell Quay development.

Although the exact amount defrauded has not been revealed, a report by Ipswich Borough Council estimated banks and building societies were left out of pocket by at least �6million.

Up to 70 new-build flats were thought to be involved in the Ipswich fraud. It is believed con artists bulk-purchased Orwell Quay apartments at massive discounts and made huge sums by taking out fake mortgages at over-inflated prices, leaving them to pocket the difference.

Kevan Lim, Labour county councillor for St Helens in Ipswich, has now written to Andrea Hill and James Hehir, the respective chief executives of Suffolk County Council and Ipswich Borough Council, urging them help those renting the properties affected.

In an e-mail to the chief executives, he said: “I understand they (the arrests) involve properties at the Persimmon development at Orwell Quay in my division.

“Whilst a number of properties may have already been repossessed, I am concerned that there may still be individuals in rented property, which have not yet been repossessed.

“I would therefore like to see the county and borough councils provide advice via the media to anyone in Orwell Quay concerned about their position, as to how they can get advice.”

More than 50 City of London Police officers, assisted by Sussex Police, raided six residential properties in Sussex and North London on Monday to make the arrests.

Searches also took place at three business premises. The inquiry centres on a mortgage brokers based near the south coast, which is currently in liquidation.

The raids were part of an investigation into a mortgage fraud affecting mortgages taken out with Bradford and Bingley on more than 500 properties in the south of England between 2005 and 2007.

The eight men and one woman arrested are between 29 and 73 years old and were taken into custody on suspicion of conspiracy to defraud and money laundering.

The inquiry is one of 615 investigations run by City of London officers - the UK's lead force on economic crime - into alleged mortgage fraud. The inquiries are said to involve 10,000 victims and losses run into hundreds of millions of pounds.

Det Supt Bob Wishart, from City of London Police, said: "We know that fraud has the potential to impact on local communities and we are determined not only to work with colleagues across the UK to investigate such frauds but to liaise with other agencies to mitigate that impact on innocent people affected by the criminal greed of others.”