A financial services firm received a heavy penalty for its lead role in a life-long rental-based scam that robbed more than 100 cash-strapped retirees, forcing some to leave their homes and reaping their lives’ savings.
Sterling First has marketed itself as bringing together “savvy real estate investors looking for a better rental return with retirees looking to sign a long term lease agreement”.
Dozens of retirees participating in the scheme sold their homes for free closed capital and then moved into rental properties with the expectation that they would stay there for the rest of their lives.
But Sterling First went into liquidation last year – after allegedly trading in bankruptcy for months – and forcing many tenants out while others were still fighting to keep a roof over their heads.
On Thursday, Theta Asset Management and its managing director Robert Patrick Marie were ordered to pay $ 2 million and $ 100,000, respectively, in order to allow five product disclosure statements for the Stirling Income Trust to be released and fail to ensure that they did not contain misleading or deceptive data. .
But the Australian Securities and Investments Commission says it will not seek recovery of the penalty, as doing so would reduce the funds available for distribution to creditors.
Mr. Mary will also be excluded from running the companies for a period of four years.
Dodgy product disclosure data collected nearly $ 17 million from investors between May 2016 and April 2018, losses that Judge Neil McKeecher described as catastrophic.
ASIC Commissioner Cathy Armor said the sentence sent a strong message to “those charged with serving as guards” to comply with their legal obligations.
Of the 101 people who entered into Sterling New Life leases, 63 people invested in the Sterling Income Trust to generate funds to cover their rental expenses.
The remaining 38 tenants invested in preferred shares offered by companies within the Stirling Group.
In its most recent update, liquidator KMPG said it has reasonable grounds to believe that shareholders of Sterling First will not receive a cent.
ASIC’s investigation of the Sterling Group of Companies, which operates in WA, Queensland and Victoria, is ongoing.