AUS: suspended jail for Money for Living director

Money for Living director, Mr Gary O’Neill, of Elwood,Victoria, was yesterday sentenced in the Melbourne County Court after pleading guilty to two charges of dishonestly using his position. The charges were brought by the Australian Securities and Investments Commission (ASIC). O’Neill was sentenced to 12 months imprisonment fully suspended upon entering into a AUD1,000 recognisance to be of good behaviour for two years. This sentence follows an ASIC investigation into Mr O’Neill’s involvement with Money For Living (Aust) Pty Ltd (in liquidation) (MFL) and MFL Property Holdings Pty Ltd (in liquidation) (MFLPH).

The scheme was based on an equity release scheme under which Money for Living purchased property at a discount against full market price from the elderly on terms that they could remain there for life. But he did not disclose that the properties had been purchased at a discount nor that he did not get vacant possession.O’Neill, 38, admitted that he obtained mortgages from a financier totalling almost AUD1 million by submitting loan applications that failed to disclose the life tenancies attached to the mortgaged properties. He further admitted that the business method involved purchasing property at a discounted rate, as opposed to the market rate, from the elderly and allowing them to remain in the property until they died. Mr Stephen O’Neill, who has entered a plea of not guilty, is to stand trial on four counts of dishonestly using his position as an officer of a corporation. Mr Stephen O’Neill is the brother of Mr Gary O’Neill.

On 29 September 2006, the Federal Court delivered judgment in relation to civil proceedings instigated by ASIC. Justice Raymond Finkelstein found that:

MFL offered the vendors a financial product under the general definition of the law (ss763B(a)(i) Corp Act & ss 12BAA(4)(a)(i) ASIC Act); MFL made false and misleading statements in the brochure and on the website; and MFL made false and misleading statements in the agreements with the vendors. This judgment was significant in that it confirmed ASIC’s view that the products offered by MFL were financial products or financial services. His Honour also found that the tenancies held by the vendors over their former homes were secure for life and ‘guaranteed’ to survive any adverse claims.The 117 vendors who purchased MFL’s products are currently being represented by the private law firms of Slater & Gordon, Russell Kennedy and Dellios West in three related proceedings in the Federal Court of Australia and the Supreme Court of Victoria. These related proceedings have been able to take advantage of the findings of law and fact from the ASIC lead proceeding. MFL and MFLPH were placed into liquidation on 21 December 2007.