Former property developer pleads guilty to $1 million in fraud

A Melbourne property developer has pleaded guilty to raising more than $1 million from fraudulent behaviour.

Carlo Cini, 56, appeared before the Melbourne Magistrates Court yesterday and pleaded guilty to 22 offences following an ASIC investigation. These included 10 counts of obtaining property by deception, 11 counts of obtaining a financial advantage by deception and one count of fraudulently inducing a person to invest money.

The charges related to the former property developer and mortgage broker’s conduct as the sole director of Williamstown-based C Cini & Company, which is now in liquidation.

Between 2007 and 2008 Cini raised more than $1 million from seven investors on the basis the funds would be used for property development being undertaken by his company. However the investments were subsequently used for other purposes, including personal expenses and other company-related payments.

The court also heard Cini obtained a financial advantage by evading debts due to investors. This was because of the issuing of valueless cheques to the investors with a value of more than $700,000.

A number of other charges were withdrawn by the prosecution as a result of Cini’s guilty plea.

Brett Warfield, chief executive of fraud investigations firm Warfield and Associates, told SmartCompany investors need to be conscious of how they are approached by developers.

“These approaches can be a cold call over the phone or an email that comes through,” he says. “The approach is one of the giveaways and these sorts of things often affect people instead of big companies.”

Warfield says once investors have invested their money they should be receiving regular updates.

“You would expect open and transparent communication,” he says. “You would also expect to be able to meet with them and track the progress of the investment.”

The easiest way to avoid getting caught in these situations, according to Warfield, is to have a sound financial education.

“A lot of people out there just don’t understand risk versus return. If you don’t understand that you shouldn’t be doing it by yourself. You should be going through good financial advisors with businesses that have been there for many years with good returns.”

Cini will appear before the County Court of Victoria on July 31 for a plea hearing. The matter is currently being prosecuted by the Commonwealth Director of Public Prosecutions.

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