Victims of a sunshine fraudster: Britons are being bullied and deceived by a timeshare firm in Tenerife. Phil Davison and Michael Prestage report (CORRECTED)

CORRECTION (PUBLISHED 19 SEPTEMBER 1993) APPENDED TO THIS ARTICLE

THE SIGNS on the wall describe it as 'The Ultimate Experience', but for most of the 7,000 timeshare owners of Island Village, Tenerife, even getting in has become the ultimate nightmare. They are the victims of a multi-layered property and cash imbroglio that has cost many of them thousands of pounds more than their original investment and left some with shattered nerves.

The man who built the complex, the former gold dealer John Palmer, has a conviction for fraud and was acquitted of handling, melting down and 'laundering' proceeds of the pounds 26m Brink's-Mat gold bullion robbery at a security warehouse near Heathrow airport in 1983.

He retains overall control over the 180-villa complex via a complex web of companies in England, the Isle of Man and Tenerife itself. Lawyers on the island estimate the complex cost the 43-year-old Mr Palmer pounds 6m to build but that his companies have collected tens of millions since.

Based on an average pounds 3,000 for a lifetime ownership of one week a year, initial sales of the 180 villas netted more than pounds 500,000 for each week, or well over pounds 20m. The current average of more than pounds 100 a week 'maintenance' fees, brings in around pounds 1m.

Brink's-Mat, the security firm, has a Mareva injunction (an asset-freezing injunction) on Mr Palmer's assets. It is known that he has substantial funds and bank accounts and moves cash around the world. But wherever he goes Brink's-Mat and its insurers follow, in an operation to track him and up to 50 others named in a High Court injunction.

The Tenerife venture has many layers. Documents obtained on the island show that thousands of buyers, would-be buyers or simple tourists, mostly Britons but including Germans, French, Danes and others, are parted from their money using a range of tactics.

'They kept us waiting for three hours, refusing to hand over our keys and demanding pounds 460 maintenance fees, after we'd been up on the journey since three that morning,' we were told last week by 'John', a former prisoner-of-war aged 73, who is partially disabled. 'We'd already paid it by post and had a receipt.

'There were heavies all around there and a queue of people like us, all being treated the same. The woman at the reception just smirked and said she was doing her job. I said 'yes, just like the Gestapo used to say',' he said.

The reception desk is manned by Jean Brooks, known to many owners as Rosa Klebb after one of James Bond's most memorable opponents. Her office is most notable for her brown-and-white mongrel dog and a sign that reads: 'The more I meet people, the more I love my dog.'

John's 65-year-old wife, 'Nan', took up the story. 'I could see John's wartime memories coming back. I knew he needed to lie down so I just signed them a cheque to get it over with. He hasn't been the same since.'

The couple, who returned to England last week after their annual four-week ownership, did not want their names published for fear of reprisals from the armed men who guard the Village complex on behalf of Mr Palmer's Island Village Management company. 'The heavies watch your every move,' they said.

Brian Roberts of Welling, London, paid pounds 6,300 for two weeks in a one-bedroom villa in 1985. Two years ago, he was encouraged to upgrade to a two-bedrom villa - cost for two weeks pounds 13,019 - on the understanding that he was 'trading in' the smaller villa. He paid a new deposit of pounds 2,584 pounds for the bigger place. A few months later, he received a toughly-worded bill for pounds 9,293 from Island Village Management stating that they had been unable to sell his original two weeks but that he had to pay for the larger villa. Mr Roberts refused, held on to his original one-bedroom villa but forfeited his pounds 2,584 deposit. Almost every owner we spoke to last week had a similar story.

Timeshare owners set up an association and called an annual meeting at Wolverhampton in September 1991. They were unhappy that they had received no accounts and worried that a fund for major repairs did not appear to have been set up, claiming maintenance was poor.

Armed and uniformed security guards, as well as several armed and burly associates of Mr Palmer, ensure that warnings to owners are taken seriously. While we watched new arrivals enter the reception area on Friday, we were monitored closely by half a dozen security men, including two Lebanese brothers, Mohammad and Hussein Durbah, both of whom have appeared in court in Granadilla, the nearest town to the Island Village complex on the Playa de las Americas, to answer complaints by owners of intimidation.

Two of the arriving owners. Graham and Soozie Webster, of Wirral, Merseyside, had been refused their keys unless they paid pounds 228 maintenance fee for 1993. Mr Webster refused, showing his receipt for that sum paid by post. Later, Soozie rushed out, relieved and happy. 'We've got the keys, we've got the keys.'

Mr Palmer himself has appeared twice before Judge Nieves Rodriguez, on 10 and 15 February, when he claimed that as founder of the village he had 'a moral obligation' to look after it.

On other occasions he claimed to have had nothing to do with Island Village Management for many years. At the last hearing, the judge called in police to remove heavily-built associates of Mr Palmer, who had been mingling with villa owners there to lodge complaints.

Despite his insistence that he no longer has anything to do with Island Village Management Ltd, the Independent on Sunday has a copy of a registration document from the Commercial Register of Santa Cruz de Tenerife, the island's capital, stating that Mr John Palmer, referred to as a jeweller, British passport number B343169 with domicile in The Coach House, Battlefields, Lansdown, near Bath, is 'the unique administrator' of Island Village Management. It is dated 6 March 1989 and has not been updated or altered. This newspaper also has a copy of a document from Tenerife's Tourism and Transport Board, a government body on the Canary Islands, naming John Palmer as operator of the Island Village complex in the name of Island Village Management. It is dated 16 May 1989.

Many of the management fees are paid to Island Village Financial Services Ltd of Brentwood, Essex. Christine Ketley, a spokeswoman for the firm, said the problems were caused by a small minority of owners. 'It is a few who want things done differently and their tactics stink.'

On paper, at least, Palmer sold the Island Village complex soon after it was completed, to 17 separate companies, known as Island Village Units Numbers One to Seventeen, registered in Ramsey, Isle of Man. But his own Island Village Management Ltd, registered in Douglas, Isle of Man, continued to market the timeshares. TTI Europa, also based on the Isle of Man, was appointed as trustee for the complex. Lee Penrose, head of TTI Europa, is also listed as a shareholder and secretary of each of the 17 Units companies.

Mr Penrose said Island Village had been set up as a club trustee scheme and TTI Europa operated similar ventures across Europe. John Palmer had established a series of companies in the Isle of Man and conveyed the properties to them. These were then handed to TTI Europa as trustee.

'I find I can talk fairly frankly with John Palmer. I have tried to facilitate discussions between him and the committee. Our obligation is to look after members.'

John Morgan, of Airdrie, Scotland, who now runs the comunidad or owners' committee, set up under Spanish law in an attempt to remove Mr Palmer's associates, has met Mr Palmer and Mr Penrose to persuade Mr Palmer to hand management control to the committee. He says the relationship between Mr Palmer, the 17 companies and TTI Europa is 'unclear'.

The Tenerife lawyer now defending the owners' right to manage the complex, Armando Perera, was appointed by the 17 Isle of Man companies in response to the owners' demands to set up their own committee under Spanish law. He says he is unsure who is who in the Isle of Man web and that his aim is merely to see Spanish law applied. 'John Palmer has no legal rights to manage the village. But he does so de facto. He is physically there and refuses to leave,' Mr Perera said.

When Mr Palmer last appeared in court on the island here, Mr Perera produced photocopies of credit card bills and slips he said revealed a further layer to the operation. Although all were related to 'management' or other fees, demanded from new arrivals before they were allowed their keys, the bills were made out to eight other companies, all of which, the lawyer said, Mr Palmer or his known associates control.

The Island Village is far from Mr Palmer's only such venture, according to Mr Perera and other sources. A similar timeshare complex on another Canary island, Lanzarote, several years ago, was largely sold off to individual owners but never completed. Mr Palmer's companies failed to pay the builder, who went bankrupt.

Mr Palmer's private jet, number G-JITN, taxied from its spot outside the fire station at Tenerife's Reina Sofia airport last week and he has not been seen on the island since.

When on the island, Mr Palmer keeps a low profile. He moves between a penthouse in the Flamingo Club to another timeshare complex he is said to own, but which has not been completed, in a blue Opel Omega. He travels with his Lebanese associate Mohammad Durbah, who has been known to carry a shotgun - he told the Granadilla court that he had a licence. Mr Palmer, born in Birmingham, is married with two daughters. His long-time business partner was Garth Chappell who was convicted of involvement in the Brink's-Mat theft and disposal of the Mars Bar-size gold bars. Mr Palmer and Mr Chappell had been business partners in Bristol for many years before they moved into a legitimate gold-smelting business. Mr Palmer left Birmingham at 15 and joined his brother Malcolm in a roof tiling business.

He later started a second-hand car business and struck up a partnership with Chappell. They opened a shop selling second-hand car spares. The couple then went into the furniture trade.

Scadlynn Ltd, the firm they used to deal in scrap gold, was based above one of their furniture shops at Bedminster, Bristol. By the end of the 1981/82 financial year the turnover was pounds 6m.

After the Brink's-Mat robbery pounds 13m was laundered through Scadlynn's bank accounts. At the time of Chappell's trial the court was told that such was the demand for cash their local bank, Barclays in Bedminster, had to have special deliveries of pounds 50 notes from the Bank of England.

Chappell was found guilty and sentenced to 10 years in jail for handling the stolen gold. But Palmer was not tried at the same time. In January 1985, with his wife, Marnie, and children, Mr Palmer took a holiday in Tenerife. He did not return. While on the island he founded his timeshare business.

In June 1985 Palmer was forced to leave Tenerife under an 'undesirable aliens' rule. He attempted to enter Brazil on a passport that had expired and was arrested. After spending four nights in prison he flew back to Heathrow, where he was arrested. He was later acquitted of any part in disposing of Brink's-Mat gold.

That was not Mr Palmer's first brush with the law. In 1980 he and Chappell faced charges of obtaining credit on furniture by providing false references. He received a six-month suspended prison sentence.

In December 1991 Palmer and Chappell were given 18-month suspended prison sentences for their part in a mortgage fraud. Palmer was also ordered to pay pounds 13,052 compensation and pounds 5,000 costs. Palmer admitted obtaining nearly pounds 65,000 by deception.

Palmer told a Bristol newspaper through his London solicitor, Henry Milner, that he had not been involved with Island Village for six years and had no links with the management company. Contacted by the Independent on Sunday last week, Mr Milner said: 'I know where he is, but I can't tell you.'

Yesterday, Island Village launched a new money-seeking venture. Just before we left the island, we found a pamphlet on our windscreen. Anyone who had a hired car, it said, would be given cash towards the hire and 'discount vouchers', simply by showing up at the Village with the car rental certificate. It did not explain how to get past the armed guards.

CORRECTION

WE have been asked to point out, in relation to an article headed 'Victims of a Sunshine Fraudster' on 28 February, that the shares of the 17 Island Village owning companies have never been personally held by Mr L W Penrose but are held in trust by Timeshare Trustees (International) Limited as trustees only, and beneficially for, the members of the Island Village Club. Timeshare Trustees (International) Ltd and Mr Penrose have always been completely independent of John Palmer and his companies. We apologise for the errors.

(Photographs omitted)

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Life and Style
Google celebrates the 126th anniversary of the Eiffel Tower opening its doors to the public for the first time
techGoogle celebrates Paris's iconic landmark, which opened to the public 126 years ago today
News
Cleopatra the tortoise suffers from a painful disease that causes her shell to disintegrate; her new prosthetic one has been custom-made for her using 3D printing technology
newsCleopatra had been suffering from 'pyramiding'
Life and Style
Baroness Lane-Fox warned that large companies such as have become so powerful that governments and regulators are left behind
techTech giants have left governments and regulators behind
News
people
Arts and Entertainment
Coachella and Lollapalooza festivals have both listed the selfie stick devices as “prohibited items”
music
Sport
Nigel Owens was targeted on Twitter because of his sexuality during the Six Nations finale between England and France earlier this month
rugbyReferee Nigel Owens on coming out, and homophobic Twitter abuse
Arts and Entertainment
Tracey Emin visits her 1990s work ‘My Bed’ at Tate Britain in London, where it is back on display from today
artsBut how does the iconic work stand up, 16 years on?
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Web Designer / Front End Developer

£28000 - £32000 per annum: Recruitment Genius: This fast expanding web managem...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Recruitment Consultant / Account Manager - Surrey / SW London

£40000 per annum + realistic targets: Ashdown Group: A thriving recruitment co...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor