A man involved in a company which persuaded existing home owners with lots of equity to gear up their loan and advance those funds as a home loan to another borrower in a cheaper suburb will stand trial on 136 criminal charges.
Anthony Nicholls, 61, of Mitcham, will stand trial in the Victorian County Court in May next year, the Australian Securities and Investments Commission announced yesterday.
Nicholls is charged with 113 counts of breaching his duties as a director of Zantholls International and Peton Properties, three counts of making false and misleading statements, 19 counts of obtaining a financial advantage by deception and one count of obtaining property by deception.
It is expected the trial will run for three months. Nicholls has denied the charges, which include allegedly obtaining more than $2.6 million in investor funds by deception.
The alleged misconduct is said to have occurred while he was a director between 2004 and 2006.
Around 20 people who invested $2.68 million with the companies suffered losses. The money was to be invested in property developments in Ballarat, but ASIC pointed out it was impossible for the developments to occur in the timeframe promised to investors.
It is also alleged Nicholls dishonestly authorised the withdrawal of $1.8 million in investor money from a Peton Properties bank account and a solicitors’ trust account for his own benefit, the benefit of his co-director, Peter Scully, and for the financial obligations of related company The Key Result.
This business, which was liquidated in November 2005, functioned by persuading existing home owners to gear up their loan and advance those funds as a home loan to another borrower in a cheaper suburb.
Nicholls could face five years jail or a $220,000 fine for his misconduct as a director. He could face a maximum penalty of 10 years jail or a $495,000 fine for making false and misleading statements.
Peton Properties went into liquidation in 2007, owing creditors more than $4 million.