Former mortgage broker jailed

A Victorian-based former mortgage broker has been sentenced to three years imprisonment and ordered to pay $200,000 in compensation for encouraging clients to refinance their home loans and take out larger loans to invest in bogus schemes.

Ronald Wynhoven, an undisclosed bankrupt and former director of Seed Finance and Investments and R Wynhoven & Associates (both now in liquidation), was sentenced in the Melbourne County Court to a 12-month jail-term and an additional two-year suspended sentence. He was also ordered to pay $200,000 compensation to one of his victims.

According to the Australian Securities and Investments Commission (ASIC), which brought the charges, Wynhoven induced a number of his clients to refinance their home loans through his business and use the equity in their homes to obtain a larger loan to invest with him. ASIC alleged that Wynhoven misrepresented the nature of the investments, the level of risk involved and the returns they could expect to generate.

In September 2004, the Federal Court of Australia appointed a liquidator to Wynhoven’s two companies and banned him from acting as a company director for five years and from working in financial services indefinitely. In December 2005, the court declared Wynhoven bankrupt after he failed to pay court costs associated with the September 2004 hearing.