Former real estate agent given five years prison, ordered to repay $2.1 million over misuse of funds
Monday, March 19, 2018/
A former real estate agent has been sentenced to five years in prison after Consumer Affairs Victoria took action against him in the County Court with allegations he misused more than $6 million of clients’ funds.
The state’s consumer watchdog confirmed in a statement the man, who operated six LJ Hooker franchises with his wife, pled guilty to 48 charges relating to the misuse of funds across the businesses.
Consumer Affairs Victoria brought the case with claims he had committed offenses against the Estate Agents act between 2013 and 2016. These claims included that he transferred money from the company’s sales trust account to another account associated with the business, without seeking consent from clients.
Other allegations included that vendors had been given general bank details to deposit money, instead of the required trust account details, and that the agent had instructed employees to buy properties without the vendor’s knowledge of this.
In 2016, Consumer Affairs alleged it discovered that the trust account that was associated with the real estate franchises was overdrawn by $150,000.
The Victorian Property Fund has so far paid out $2.1 million to consumers who were affected by the agent’s misuse of funds. According to the watchdog, the man must repay that entire amount to the fund as well as serving his five year jail term.
News.com.au reports that in sentencing the man, County Court judge Michael Bourke told the former agent “the advantage was very much in your favour” in the situation, saying his actions had been “dishonest, harmful and prolonged”.
In a statement on the case, Consumer Affairs Victoria reminded real estate agents that they are bound by strict obligations around where clients’ money must be deposited.