Nine people were arrested yesterday in connection with a suspected £40m mortgage fraud involving more than 500 properties.

Officers from the City of London police, assisted by Sussex police, raided six residential addresses and three business offices. The investigation centres on Eastbourne Financial Services Limited, a mortgage broker currently in liquidation.

Eight men and a woman were arrested on suspicion of conspiracy to defraud and money laundering, the police said.

Mortgage fraud cases are expected to rise as the downturn deepens.

Financial Times