The Palmela Case: What Happened and How to Protect Yourself from Similar Fraud
The Palmela case is probably the biggest construction fraud scandal in Portugal in recent years. 114 families affected, approximately 27 million euros in claimed credits, and lives completely destroyed. This article explains what happened, how it happened, what the system should have caught, and what anyone can do to avoid being the next victim.
Every case is different, and each affected family's circumstances are unique. Always consult a lawyer for your specific situation.
The company: Diagramamotriz
Diagramamotriz - Construção Unipessoal, Lda. was founded in 2017 and operated in the Palmela area, in the Setúbal region. The company presented itself as a residential property builder, offering houses and apartments in seemingly legitimate developments.
The person responsible for the company was Romeu Joel Marçalo da Silva. The company operated with a presence that, from the outside, looked normal: it had offices, held meetings with clients, showed projects, and collected deposits to reserve units.
The scheme: duplicate, triplicate, quadruplicate sales
The core of the fraud was as simple as it was devastating: the same properties were sold to multiple different families. A unit priced at, say, 200,000 euros was promised to 3 or 4 different families, each signing a CPCV and paying a deposit.
The deposits collected frequently exceeded 100,000 euros per family, without any fiduciary protection. There were no segregated accounts, no independent trustees, and no CPCV registration at the Land Registry. The money went directly into the company's account and was spent, invested in other projects, or diverted.
In total, it is estimated that approximately 17 million euros in deposits were collected from the affected families, with the total credits claimed in the insolvency proceedings exceeding 27 million euros (including interest, compensation, and other losses).
The collapse and judicial response
The scheme began to unravel when families started realizing that the works were not progressing as promised and that other people were claiming the same properties.
The chronology of events:
- December 2025 - Romeu Joel Marçalo da Silva is detained by the Polícia Judiciária (PJ), but is released with coercive measures (identity and residence terms, among others). The investigation was assigned to the DIAP of Setúbal.
- January 2026 - The appointed insolvency administrator declares the insolvency as culpable (culposa), meaning it was proven that the insolvency resulted from deliberate acts by the person responsible, not from market circumstances.
- Creditors' assembly - creditors voted unanimously for the liquidation of the company, discarding any recovery attempt. The unanimous decision reflects the severity of the situation and the absence of any viability prospect.
- Criminal investigation - continues at the DIAP of Setúbal, with possible charges of qualified fraud and other crimes.
Why nobody caught this in time
One of the most painful questions the families ask is: how did nobody catch this before? The answer is complex, but honest:
What a verification would have caught:
- The absence of a valid IMPIC license for the type and value of works the company was carrying out
- A relatively recent company (founded in 2017) promising large-scale developments
- Possible signs of financial stress in the final stages of the scheme
What a verification probably would not have caught:
- The duplicate sales scheme itself, because that type of fraud does not appear in public records until it is reported
- No verified prior criminal record has been found for Romeu before this case. This appears to have been the first act of fraud at this scale, which makes early detection much more difficult
It is important to be honest about this: no verification system, including ObraXRAY, can catch every fraud. But the absence of an IMPIC license, on its own, should have been enough to raise a serious red flag.
The legal gaps the case exposed
The Palmela case revealed systemic failures in the protection of property buyers in Portugal:
- No mandatory CPCV registration - buyers could (and should) have registered their CPCVs at the Land Registry, but it is not mandatory. Many did not know they could do so.
- No mandatory fiduciary accounts - deposits went directly into the company's account. In Portugal, for this type of transaction, there is no obligation to deposit the sums in a segregated account managed by an independent third party.
- Insufficient RJUE oversight - the Legal Regime for Urbanization and Building should, in theory, ensure that works are carried out by authorized entities, but on-the-ground oversight is clearly insufficient.
- Real estate mediation without adequate standards - the intermediation in the sale of new-build properties under construction lacks regulation that effectively protects buyers.
What victims are demanding
The affected families, organized through victim associations, are demanding concrete legislative reforms:
- Mandatory CPCV registration at the Land Registry for transactions above a certain value
- Mandatory fiduciary accounts for deposits in purchases of properties under construction
- Stricter standards for real estate mediation
- Capital protection for buyers in the event of builder insolvency
- More active oversight by IMPIC and municipal authorities
How to protect yourself from similar fraud
If you are thinking about buying a property under construction or contracting a build from scratch, these are the practical lessons from the Palmela case:
- Always verify the company before signing - IMPIC license, court proceedings on CITIUS, directors' background, tax and Social Security debts
- Register the CPCV at the Land Registry - it is the most important and most neglected step. It costs little and protects a lot
- Demand a fiduciary or escrow account - especially for high values. If the builder refuses, that is a warning sign
- Never pay excessive deposits - negotiate reasonable deposits (10-20%) and phased payments conditional on work progress
- Diversify the risk - if possible, do not concentrate all your savings in a single project with a single company
- Hire an independent lawyer - do not use the lawyer the builder "recommends." Have your own
- Visit the site regularly - monitor real progress, do not rely solely on the builder's reports
Sources
The information in this article was compiled from reports published by Idealista, SÁBADO, Jornal de Negócios, Now Canal, ZAP, and SOL, as well as from public court documents.
Check before you buy
ObraXRAY cannot catch every fraud, no system can. But it can detect the absence of a license, pending lawsuits, debts to the State, and problematic patterns in company directors. All of this in minutes, with a single search by tax number.
If the Palmela case teaches anything, it is that checking before you hire is not a luxury, it is a necessity.