A former property development company director has been jailed
Clestus Weerappah has been sentenced to four years jail over his role in the collapse of property development group Dollarforce Financial Services (DFS) in 2009.
According to the Australian Securities and Investments Commission (ASIC), he pleaded guilty to five charges relating to the raising of more than $4 million from investors.
These charges included dishonestly using his position as a director of Ivory Property Group, My Building No 1 and Bennett Street Developments to falsely represent that money belonging to investors would be used for the purchase and development of properties on behalf of each of the property groups.
Rather, the funds were used to gain an advantage for himself, DFS or someone else.
Weerappah also pleaded guilty to making a false or misleading statement or omission in a prospectus lodged with the regulator that made or authorised to his knowledge information that was false or misleading in that loans provided by related parties had been forgiven on or prior to 30 June 2006, and that the prospectus was misleading in a material respect, in that an incentive payment agreement had been entered into and that My Building No 1 owed $2,955,000 to investors.
The other guilty plea related Weerappah falsifying the books and records relating to the affairs of Altitude Property Number 1, in that he created a false deed of sale relating to the purchase of property by Bennett Street Developments, of a Balwyn property for the sum of $1.3 million.
Dollarforce collapsed with a deficiency of $24 million, with investors losing more than $8 million.
Appearing before the County Court of Victoria on 6 August, Weerappah was sentenced to four years jail with a non-parole period of two years and ordered to repay $3.7 million to a number of investors.
A second director, of a related entity, James Stephen Lewis, was also convicted by jury of one charge of making a false or misleading statement or omission in a prospectus lodged with ASIC that an incentive payment agreement had been entered between Altitude and Alamanda Property Investment No 2. He will be sentenced on 4 October 2013.
Lewis pleaded not guilty to four other charges relating to acting as an officer and falsifying the accounts of My Building, as well as falsifying accounts of inclusion in prospectus.
"The actions of Mr Weerappah and Mr Lewis were reprehensible and represented a gross breach of investors' trust," ASIC Commission Greg Tanzer.
"Mr Weerappah's conduct was deliberate, cunning and calculated. His dishonesty over three years led to devastating consequences for investors."
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