Pymble Real Estate Agent Prosecuted for Trust Account Fraud

A former Pymble real estate agent has received a suspended sentence and been ordered to pay more than $100,000 fines, costs and compensation for offences involving the fraudulent conversion of trust account money.

David Michael Johnson, formerly the sole director of Johnson Prestige Realty Pty Ltd trading as L J Hooker Pymble (no longer trading) received a suspended sentence of 14 months imprisonment for each of eight charges of fraudulently converting trust account money. He was placed on a 12 month good behaviour bond by Parramatta Local Court.

He was also ordered to pay $118,180 – $2,000 for each of the eight convictions, $2,180 costs and $100,000 compensation to the Property Services Compensation Fund.

Fair Trading Commissioner Rod Stowe said NSW Fair Trading would continue cracking down on trust account fraud in the real estate industry.

“These are indictable offences and real estate agents can face prison terms of up to 10 years for meddling with trust accounts,” he said.

“Millions of home-owner and landlord dollars go through trust accounts every year. Consumers have the right to expect that all real estate agents will comply with the provisions of the Property, Stock and Business Agents Act, and trust money will be kept safe those agents.”

The court heard that on 31 August 2011 Mr Johnson telephoned Fair Trading and reported a trust deficiency of about $350,000 for Johnson Prestige Realty Pty Ltd. He offered to hand himself in and put the company into voluntary administration.

Two days later Fair Trading Investigators attended the offices of L J Hooker Pymble. Mr Johnson admitted to misappropriating $480,000 from the sale deposits of a property in Killara. To cover up the shortfall he then fraudulently misappropriated a further $500,000 from the sale deposit on a property at Wahroonga.

Mr Johnson told the investigators he fraudulently misappropriated the trust funds to pay for illegal drugs used by his wife to alleviate pain from failed surgery.

Mr Stowe described the situation as tragic but said it did not justify Mr Johnson’s actions, which warranted the full force of the law.

“Fraud of any sort in the real estate industry will not be tolerated,” he said. “Fair Trading will continue its program of spot inspections to ensure all agents are operating within the law.”

Source: NSW Fair Trading

Leave a Reply