Palma on Trial: The Major Real Estate Fraud and the Question of Justice

Trial in Palma: When will the victims get their money — and who will face consequences?

On Avenida Alemania, in front of the provincial court, the air smells of strong coffee and autumn rain. Behind the heavy doors, proceedings have been running since June that have shaken the island: 235 people claim they were lured into a property scam. The central question running through the hearings is: how can these paper objects be turned back into real justice for the victims?

What the public prosecutor is accused of

Between 2010 and 2018, clients of a company called Lujo Casa are said to have paid deposits totalling around €3.3 million — for apartments that apparently never existed. The prosecution speaks of an organized system: phantom sales, fabricated building permits, false land descriptions. On the plans, apartment blocks existed; on the ground, they did not.

The defendant, the flight and the court

At the center is a man many only call “Charly” Charly in court in Palma: When stories collide with bank statements. The indictment seeks up to 16 years in prison. By comparison, see Palma: Suspended sentence after €35,000 fraud – was that enough? When the case broke in 2018, the accused is said to have fled to Colombia; two years later he was captured and extradited under extradition procedures. After four years in pretrial detention he is now free again — whether the trial and sentence can restore the victims' trust remains open.

Plaintiffs, witnesses, banks

So far about 87 witnesses have testified. Many describe the same sequence: a handshake, a preliminary contract, a deposit — and then the creeping unease when promised building permits do not appear at the municipal offices. About one hundred victims have so far managed in court to have mortgage loans for non-existent apartments declared void. The judges see faults with the banks: lenders apparently violated their duty of care and granted loans too readily.

What is often overlooked

In the public debate some things remain underexposed: the role of notarial checks, the quality of land register entries, the training of municipal employees who should detect warning signs earlier. Equally little is said about the psychological consequences for families who live for years with uncertainty — races against statutes of limitations, constant phone calls to lawyers, the quiet mistrust of letters from the town hall. These invisible harms add up to a societal loss of confidence.

International dimensions and systemic failures

The case also shows the limits of cross-border investigations: flight abroad, long extradition procedures, differing legal frameworks. Added to this is a market dynamic that has been at work in Mallorca for years: demand, scarce building land, and the temptation to sell projects before they are legally and structurally secured. This is not the only large case on the island; see 25 Million in Focus: Trial of Matthias Kühn in Palma and What the Island Should Learn. Where oversight has gaps, space for fraud is created.

Concrete opportunities and solutions

There is no panacea, but there are practical steps: stronger due diligence requirements for banks in property financing; mandatory electronic publication of building permits in the municipal portal in real time; more binding checks by notaries and a compulsory cross-check with the land register before signing contracts. Also important would be a central victims' compensation fund for cases where recoveries are legally difficult, as well as free legal advice for those affected.

What the trial can mean

The upcoming continuation of the hearings, with further dates at the end of September, is more than a criminal case against individuals. It is a test for institutions: how will banks respond to judicial warnings? Will municipalities review their procedures? And will the courts provide clarity for thousands of potentially similar contracts? For many victims it depends on whether they can find peace again — and whether the island culture that relies on trust can heal a wound.

I will keep following the story — not out of sensationalism, but because households have been deprived of their savings here. The sound in the courtroom is often quiet: distant footsteps in the corridor, the rustle of files, an occasional sigh. These small things remind us that law is more than paragraphs: it affects people who need answers after years of uncertainty.