Finaxiome real estate scandal: suspended sentences and fines requested against former executives

The prosecutor requested a three-year suspended prison sentence and a fine of 50.000 euros each for two founders of the company, with a five-year ban on working in real estate development.

They now work for another real estate company that acquired part of Finaxiome in 2012.

Two years suspended prison sentence and a fine of 40.000 euros have been requested for the former works director of Finaxiome, with the same professional ban as the first two.

As for the fourth defendant, another founder of the company who had left it in 2009, the prosecutor requested his acquittal.

There are a multitude of "detailed, consistent and coherent testimonies" demonstrating that Finaxiome had a strategy "designed to deceive third parties", the prosecutor stated.

The four defendants, all now in their fifties, are being tried for "fraud" and "advance receipt of funds" in the case of three of them, and for advance receipt of funds and receiving stolen goods in the case of the one for whom the public prosecutor has requested acquittal.

Founded in 2003 in Amiens and liquidated in 2012, Finaxiome sold thousands of apartments off-plan to individuals throughout France, taking advantage of tax relief measures then in force.

The investments were presented as secure, as subsequent rents combined with tax advantages were supposed to self-finance them.

But many batches were delivered years late. And they were largely overvalued to begin with, often making their resale disadvantageous.

Finaxiome, which has been in difficulty since 2006, is accused of issuing false certificates of progress of work to raise new funds from its clients, which were actually intended to cover its own needs.

The trial includes some 300 plaintiffs whose total damages have been estimated at 15 million euros.

Lawyers for the plaintiffs highlighted the "disastrous consequences" of this debacle on their clients' lives: divorce, depression, and financial difficulties.

Finaxiome's clients were "taken by surprise," everything was done "so that they did not think" and quickly sign the transactions "under pressure," noted Anne-Valérie Benoit, representing 92 civil parties in this case.

"Finaxiome is the frog that had bigger ambitions than the ox," illustrated Bertrand de Belval, lawyer for the French Guarantee Group (GFC), denouncing "incompetence" and "uncontrolled development," as well as "amnesia" of some defendants as soon as the questions become "a little embarrassing."

"We were waiting for the truth, we got evasive answers" and "petty thieving behavior" from the defendants, Me José Delfont also criticized, insisting on the "devastating effect" of their "erratic, catastrophic" choices on the civil parties.

The defense lawyers all intend to plead for acquittal on Friday.

Rejecting any intention of fraud on the part of their clients, they intend to highlight external factors to explain the debacle of Finaxiome, such as the global financial crisis of 2008 and the end of a legal tax relief scheme on which its economic model was based.