Hammonds Madrid, the CCS FraudNet member for ||Spain||, has reported the latest developments in that country's ongoing stamp investment fraud investigation.

The fraud, originally featured in CCI last June, involves two companies - Afinsa and Forum Filatelico - suspected of getting more than 200,000 victims to invest in stamps in the belief their value would increase substantially. But police allege the two deceived clients because they didn't possess many of the stamps they supposedly purchased on their behalf, and said the actual value of the stamps was heavily overestimated.

Hammonds Madrid, the CCS FraudNet member for ||Spain||, has reported the latest developments in that country's ongoing stamp investment fraud investigation.

The fraud, originally featured in CCI last June, involves two companies - Afinsa and Forum Filatelico - suspected of getting more than 200,000 victims to invest in stamps in the belief their value would increase substantially. But police allege the two deceived clients because they didn't possess many of the stamps they supposedly purchased on their behalf, and said the actual value of the stamps was heavily overestimated.

At the time the fraud was made public police arrested several of the alleged participants, closed offices and accused the two companies of operating a massive pyramid scheme. The fraud hit the headlines both because of its scale and the size of the companies alleged to be behind it: Forum had around 140 offices in ||Spain| alone and Alfinsa was the world's third biggest collectibles company after Sotheby's and Christie's.

More than a year later, ||Hammonds Madrid, Madrid||, ||Fernando Gonzalez||, says both companies have now been accused before the Spanish courts of fraud and the case continues to be investigated by the Audiencia Nacional. Several people have already been charged with embezzlement, money laundering, tax evasion, fraudulent bankruptcy, breach of trust and forgery. In addition, Alfinsa and Forum have been declared insolvent as the stamps they actually possess only cover around 10% of the massive amount they owe clients, thought to be at least several thousand million euros.

Forum's receivers, for instance say the company has assets of Euro 900 million, but liabilities of Euro 3.7 billion. Alfinsa's assets apparently amount to Euro 600 million and its liabilities are Euro 2.4 billion. Given this position, many now think the only viable solution is to wind-up both companies.

Investigators have meanwhile continued their hunt for assets in overseas operations, and in particular are enquiring into the activities of Scala Group, an Alfinsa subsidiary in the US, which has already been sued ten times and is currently the subject of a SEC investigation.

For its own part, Hammonds say it has been seeking to mitigate the damage on behalf of several overseas stamp trading firms that supplied stamps to Spring Este, a company related to Forum. So far, says Snr Gonzalez, it has been able to get Este's bank accounts seized and frozen by the Audiencia Nacional until its investigation is completed. Hammonds has also filed a claim against Spring Este in the amount owed for stamps not paid for (almost Euro 4 million), and is currently pushing the courts to locate any and all other assets it may have.

While || Fernando Gonzalez|| appreciates the case against Forum and Alfinsa still has a long way to go and that many investors may never see their money given the parlous state of their finances, he is hopeful his clients will enjoy a more successful outcome in time.

||Hammonds Madrid, Madrid|| is part of FraudNet, the global network of lawyers specialising in combating fraud and commercial crime that was launched in 2004 and operates under the control of the ICC. FraudNet currently has 37 member firms in 34 countries whose single point of contact approach simplifies the fraud case management process and can ensure rapid and effective action against fraudsters, thus increasing the chances of recovering losses.