victims of an alleged property fraud that has rocked the town of Marbella on the Costa del Sol

A short drive from the centre of the glitzy resort of Marbella on the edge of a banana plantation with views over the Mediterranean, the newly built beach front apartment seemed too good an opportunity to miss for Jack and Yvonne Burditt.

The Devonshire couple were looking to invest their life savings on a home to spend their retirement in so they handed over more than €250,000 (£170,000) and moved in right away.

Three years later they are still there but instead of enjoying sunsets from their terrace they are keeping a watchful eye out for the bulldozers they fear will come to demolish their home.

The Burditts are among the many victims of an alleged property fraud that has rocked the town of Marbella on the Costa del Sol and landed more than 50 people including the mayor, councillors, developers, estate agents and lawyers in prison, pending trial for fraud, embezzlement and other charges.


In April the Madrid government took the unprecedented step of dismissing the entire town council after an investigation, dubbed Operation Malaya, claimed that it was embroiled in a network of bribes and corruption, siphoning cash from the huge construction boom of Spain's southern coast.

It is alleged that under the chief of urban planning, Juan Antonio Roca, the town hall accepted bribes for, among other things, granting building permits on land not designated for construction.

It is thought that about 30,000 of the 80,000 Marbella properties built in the past decade have been constructed illegally, and at least 4,500 of these face court decisions on whether they should be demolished or legalised.

Those in most danger of being flattened are buildings constructed too close to the sea or on public parkland such as the Burditts' home at Banana Beach.

''It came as such a shock to us to hear that our building is on what is essentially green belt land and shouldn't be here," said Mrs Burditt, 83, who was assured by a local lawyer that everything was above board when she and her husband made the purchase.

''Our block was listed on the local news as one of those likely to be demolished but we have heard nothing official. It's torture not knowing what is going to happen."

That sentiment is shared by scores of other British investors left in limbo as to the fate of their properties. Christopher Winter, a music producer from Rangeworthy, near Bristol, and his wife have £40,000 invested in a rural property in the hills above Marbella that they had hoped to rent out as a holiday home before reselling at a profit.

''We paid the deposit in March 2003 and were due to take possession last spring but before we paid the final £100,000 we found out that the land was not designated for this type of building and it was therefore illegal," he said.

''The decision we have to make now is do we pay the rest and possibly throw good money after bad in the hope that the building is approved or do we pull out, lose the £40,000 and hope for compensation?"

It is not only foreign purchasers who are suffering. Thousands of locals have also been affected. Antonio Banderas, the Spanish actor, made headlines when it emerged that one of his properties could also face demolition for not having the proper authorisation.

Gwilym Rhys-Jones, an adviser and investigator at the Costa del Sol Action Group, which helps expatriates in the region to fight fraud, estimates that it could cost almost £4.5 billion to compensate those caught up in the swindle. ''That's the minimum figure officials say it will cost them to indemnify innocent parties caught up in Marbella's building scandal," he said.

''It's a nightmare for everyone involved as there is no way the council can afford that.

''As we now know, the town's coffers have been drained by all the embezzlement and Marbella has been left poor."

The true extent of the scandal is not yet known but is thought to run into billions. Initial raids as part of the ongoing Operation Malaya seized large amounts of hidden cash along with 200 fighting bulls, 103 thoroughbred horses, 275 works of art, a helicopter and four Porsches.

According to one local lawyer it was only a matter of time before such things were discovered.

"Of course everyone knew to some extent what was going on but there was so much corruption on all levels that it was impossible to fight it," said Rafael Berdaguer Abogados, a property law expert.