German Property Group: Investigating the Dolphin Trust Scandal

New South Law is actively investigating the circumstances surrounding investments made into German Property Group (GPG), more commonly known as Dolphin Trust, with a particular focus on the role of UK banking institutions in handling investor funds.

The Scandal

German Property Group sold loan notes to fund the purchase and renovation of derelict German buildings, attracting more than £1.5 billion globally from investors seeking stable returns. British investors alone are estimated to have lost approximately £320 million when the firm filed for bankruptcy.

Insolvency administrators have since described how GPG "gradually developed into a pyramid scheme," with data collection proving "extremely difficult" due to the absence of proper book-keeping.

The Banking Question

Our investigation centres on a Lloyds Bank account that was allegedly used to receive investor funds. Investors were instructed by Dolphin and financial introducers to send money to what they believed was a German law firm called BK Law, with assurances that funds would be transferred to a secure "escrow" account.

However, evidence suggests the Lloyds account was actually held by a money transmission service called Whites Group — not BK Law. BK Law has informed some investors it never received their money.

"In general, if I write a cheque to person A but person B receives the money, then the receiving bank will be liable for making sure the money is sent back."

Key Concerns

The German Property Group Creditors Association has raised serious concerns about the handling of investor funds:

• Cheques written out to BK Law were cashed despite BK Law not being the account holder
• The receiving bank may bear responsibility for funds that were misdirected
• A majority of British investors who have come forward paid money into a Lloyds account
• Tracking the ultimate destination of funds has proven extremely difficult

What We're Investigating

New South Law is examining the involvement of banking institutions in connection with GPG investments. Our work focuses on:

• The due diligence performed by banks when accepting investor funds
• Whether proper procedures were followed when cashing cheques made out to different payees
• The responsibilities of banks when their facilities are used in investment schemes
• Potential avenues for investor recovery through banking liability

Impact on Investors

The human cost of this scandal is substantial. Many investors placed their entire pensions into what they believed was a secure property investment scheme. They were assured their money would be held safely in escrow, protected from direct access by Dolphin Trust.

The reality has proven devastating. With GPG in liquidation and proper records seemingly non-existent, investors face an uncertain future. The creditors' association has described the situation as "horrific" and called for greater assistance in tracking down lost funds.

Next Steps

We continue to gather evidence and assess the viability of claims against banking institutions and other parties involved in the handling of GPG investments. If you invested in German Property Group or Dolphin Trust and believe your funds were misdirected, we encourage you to contact us.

We are committed to pursuing every legitimate avenue for our clients to recover their investments and hold accountable those who may have facilitated this scandal.