Mark Ronald Letten, the South Yarra property developer who defrauded more than 1000 investors out of more than $100 million, has been sentenced to five years and eight months in jail for his crimes.
The 60-year-old former accountant and director of a number of collapsed companies, including LGH Holdings, will be eligible for parole after serving a minimum of three years.
When sentencing Letten in the Melbourne County Court on Thursday, Judge Michael McInerney described Letten’s property schemes as an “economic shamble or shemozzle that was doomed to failure”, according to Fairfax.
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“This whole enterprise, which was overseen by Mr Letten, had more severe structural defects than the Titanic,” said Judge McInerney.
“Like the Titanic, it sank ignominiously.”
Letten first appeared in the Melbourne Magistrates’ Court in December 2013 after his arrest on 37 criminal charges relating to 21 property schemes over a 10-year period.
He pleaded guilty to 27 of those charges in January, including 21 counts of operating unregistered managed investment schemes and five charges of dishonestly using his position for his own advantage.
McInerney declared in his sentencing that had Letten not pleaded guilty, “I would have sentenced you to an aggregate term of seven years and six months with a non-parole period of four years”.
An investigation by the Australian Securities and Investments Commission found more than 1000 investors had placed more than $100 million in investment property schemes set up by Letten in Australia and New Zealand between 1998 and 2010.
Schemes managed by Letten include the Healesville Walk Shopping Centre joint venture in Victoria, Reef House Resort in Palm Cove, Queensland, and the Yarra Valley Golf joint venture in Chirnside Park.
Investors suffered losses of at least $67 million in the schemes, while Letten also lost $17 million of his own funds.
Letten’s lawyers had previously argued the schemes collapsed largely because of the global financial crisis.
In the sentencing, McInerney said Letten had “arrogantly failed to implement the statutory safeguards which would have protected these longstanding investors”.
“I cannot remove from my mind the analogy to the gambler who keeps gambling despite ongoing losses. Mr Letten was totally arrogant in regard to his capacity and believed that the rosy past would continue forever,” said McInerney.
“Unfortunately, this proved to be totally incorrect.”
On February 25, 2010, the Federal Court appointed Damian Templeton and Phillip Hennessy from KPMG as receivers and managers to the property of the 15 unregistered managed investment schemes and their related companies and ordered that the schemes be wound up.
Templeton told SmartCompany this morning the receivers had now progressed through a vast range of issues, with only two or three matters left to finalise.
“There are a couple of New Zealand assets we’re still working through, but they should be resolved in the coming months,” says Templeton.
The first distribution of compensation to investors happened in May last year, with 27 cents to the dollar paid out to the victims of Letten’s schemes.
Templeton says the second round of compensation will occur within the next few weeks, which he expects to be around 5 cents to the dollar.
In June, the Federal Court gave the go ahead for legal action against Letten by the receivers over breach of trust.
Templeton says he expects there to be a third round of compensation, but said he couldn’t put a timeline on that before the outstanding assets and legal matters are yet to be resolved.
“You feel for the investors. The impact on them has been massive,” he says.
“The sooner we get the money to them, the better.”