Hundreds of east London council homes are suspected to have been fraudulently allocated to tenants by local authority housing officers who allegedly demanded cash for properties.
Police on Thursday arrested two people after executing a series of raids in Barking and Dagenham and Essex.
The City of London Police and the council launched a joint bribery and corruption investigation - Operation Chandrila - after receiving allegations that “several hundred” social homes had been wrongly issued to people between November 2020 and December 2024.
Prospective tenants answered social media adverts and were provided contacts as to how they could obtain affordable housing in Barking and Dagenham, police said.
The tenants allegedly paid fraudsters “finders fees” and inflated rents, some of which was paid in part back to the council and some was not.
Two people were arrested on Thursday and taken to Bishopsgate custody to be interviewed, police added.
The force spokesman said officers are now appealing for people who believe they are victims to come forward “as enquiries into the alleged offences remain ongoing”.
Barking and Dagenham Council leader Dominic Twomey, said: “Every day, our fraud team are behind the scenes...
“Ultimately their job is to make sure public money is being spent in the way it should be, so I’m really pleased their proactive work has helped lead to today’s arrests.
“Huge thanks go to our colleagues at City of London Police for the work they’ve done so far working in collaboration with the council and BD Reside.
“Now we wait to see what happens as the investigation unfolds, but I would encourage anyone who feels they have information that could help – no matter how small or irrelevant it may seem – to come forward.”
City of London Police said: “Between November 1 2020 and December 31 2024... several hundred LBBD properties were... allocated to members of the local community by London Borough of Barking and Dagenham corrupt Housing Officers...”
It added that a form has been set up for potential victims on its website and the force “will review your information and will respond to your submission in due course”.
