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A property developer could be jailed after being accused of persuading investors to take out loans that he then misused.
Barry John Patrick, 71, of Sunbury, Victoria, has appeared in the Melbourne Magistrates' Court on 15 charges following an ASIC investigation.
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ASIC alleges that he “illegally obtained more than $1 million from 14 investors” between 2007 and 2010, purportedly to fund property development.
The regulator said its investigation had led to Mr Patrick being charged with eight counts of obtaining property by deception, five counts of obtaining financial advantage by deception, one count of theft and one count of running a financial services business without an AFS licence.
The deception and theft charges carry a maximum sentence of 10 years.
“ASIC alleges that, in many instances, Mr Patrick formed a company to purchase a property for development,” the regulator said.
“To obtain funds for the property development projects he allegedly persuaded investors to refinance their homes or self-managed superannuation funds.
“Mr Patrick is also accused of persuading investors to take out additional loans or credit cards.”
ASIC alleges the funds raised by Mr Patrick were not used to develop the properties.
“Instead, they were used to pay interest payments to past and existing investors and to meet repayments on loans, as well as for personal use,” according to ASIC.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions. Mr Patrick will next appear in court on September 16.
[Related: ASIC forms task force to investigate one-stop shops]
