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Investigators On The Trail Of Missing Trust Money

13 May 2016

Consumer Affairs Victoria is working to piece together thousands of documents and bank transactions to trace the missing trust account money after the sudden closure of six LJ Hooker franchises in eastern Melbourne.

Minister for Consumer Affairs Jane Garrett said investigators had the complex task of reconstructing files, bank accounts and transactions of the offices at Waverley, Keysborough, Mount Waverley, Burwood, Doncaster and Box Hill.

The assets of the franchise’s principals are also being considered as part of the wider investigation, with caveats having been lodged on two properties. The move blocks the titles being transferred without CAV's consent or a court order.

Ms Garrett said the first two compensation payments totalling more than $200,000 had been approved from the Victorian Property Fund (VPF), with another 15 applications received from affected vendors and landlords.

Consumer Affairs Victoria is prioritising claims, as part of a rigorous evidence based process, to make sure affected consumers are not disadvantaged and any pending settlements can proceed as usual.

Dedicated staff are working on the investigation and additional staff are being used as new information emerges.

During the second half of last year, court action was taken against 16 estate agents over trust account deficiencies. Recent penalties have included a 40-month jail sentence, fines and licence suspensions.

Consumer Affairs Victoria issued 54 infringements ranging from $948 to $1820 to estate agents for failing to get their trust accounts audited within three months of the end of their reporting cycle or failing to submit a copy of the audit report to within 10 business days of receiving it.

On Friday 22 April, the Minister for Consumer Affairs Jane Garrett froze the trust accounts of the agency and appointed Mr Garry Roy McLean as a statutory manager under the Estate Agents Act 1980, after the sudden closure of LJ Hooker Glen Waverley and associated branches on Thursday 21 April.

Quotes attributable to Minister for Consumer, Gaming and Liquor Regulation Jane Garrett

"This is a big operation. We have put extra people on the case and our investigators are wading through thousands of bank transactions to trace where the money has gone."

Consumer Affairs has acted quickly to alert any potential purchaser of the agent's two houses about the Victorian Property Fund's interest in the agent's assets."

Quotes attributable to Director of Consumer Affairs Victoria Simon Cohen

Consumer Affairs Victoria has a strong track record of investigating missing trust account money and we get results through thorough, diligent investigative work.”

This investigation will take time as it involves close work with the statutory manager to determine how much trust money is involved, where it has gone and the nature of any alleged breaches of Victoria’s real estate laws.”

Reviewed 19 August 2020

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