In a landmark ruling, a Sydney-based real estate agent has been ordered to personally reimburse $7.4 million to a family who fell victim to one of Australia’s largest Ponzi schemes. The New South Wales Supreme Court found that the agent, employed by the now-collapsed Ralan Group, had engaged in “misleading” practices that led the family to invest in fraudulent property ventures.
The court’s decision, handed down this week, is a significant development in the aftermath of the Ralan Group’s dramatic collapse in 2019. The company, a major player in Australia’s high-rise property market, fell into liquidation with debts amounting to $561 million, casting a shadow over its extensive $2 billion development pipeline. It was later revealed that the Ralan Group had been operating under false pretenses, with the company’s director subsequently jailed for fraud.
The Chen family, who had initially amassed their fortune through successful businesses in Taiwan, sought to invest in property upon relocating to Australia. Their dealings with the real estate agent began with a straightforward purchase of a property in Lindfield, Sydney. However, the agent, whose integrity has now been sharply questioned, persuaded the Chens to invest in a series of off-the-plan apartments from the Ralan Group. Over several years, this advice led the family to acquire 28 units valued at over $7 million.
Justice David Hammerschlag’s judgement reveals that the agent assured the Chens of “guaranteed returns” and falsely claimed that his wealth was derived from similar investments through Ralan Group. He also discouraged the family from seeking legal advice, labelling it as unnecessary. The court determined that the agent was well aware of the Ralan Group’s dubious practices but continued to facilitate investments for personal gain, thereby exacerbating the family’s losses. The court’s ruling underscores the importance of ethical conduct in real estate transactions and highlights the potential risks investors face when dealing with unscrupulous advisors. The substantial financial restitution ordered serves as a cautionary tale and a significant victory for victims of fraudulent schemes.
