07-307 Former Sydney property developer jailed
Wednesday 21 November 2007
Mr Robert Orehek, 45, of Castle Hill, New South Wales, has been sentenced today to serve four years and four months in prison by the District Court of New South Wales following an investigation by ASIC. Mr Orehek will serve a non-parole period of 18 months.
On 23 April 2007, Mr Orehek pleaded guilty to two charges of fraudulently misappropriating investors’ funds amounting to $170,000. Another count of fraudulent misappropriation of $20,000 was placed on a schedule to the two other charges.
On 30 March 2007, Mr Orehek also pleaded guilty to one charge of illegally issuing securities between May 2002 and November 2002. During this time, Mr Orehek effected the issue of 27 debentures through Norton Investments Pty Ltd, of which he was the sole director and shareholder.
ASIC alleged these debentures were issued to investors without a disclosure document being lodged with ASIC or being made available. The 27 debenture holders invested a total of $2.619 million with Mr Orehek and his associated companies.
Mr Orehek, through a group of private companies he owned and controlled, raised mezzanine finance between February 2000 and November 2002 for prime residential property developments he was undertaking in the Sydney suburbs of Balmoral, Northbridge, Wahroonga, Mosman, Rose Bay, Fairlight Cherrybrook and Glenhaven.
Mr Orehek raised over $20 million by issuing Deeds of Loan to over 200 investors for his failed property development scheme. Many of these investors were associated with the Hillsong Church in Castle Hill.
Only one of the proposed developments was ever completed. The Orehek group of companies are now in liquidation. Nearly all of the investors have lost their money.
‘Today’s outcome sends a very clear message that those who deal in securities illegally, and misuse funds entrusted to them by others, face serious consequences’, ASIC’s Executive Director of Enforcement, Ms Jan Redfern said.
‘This is a clear example of a situation whereby the trust and friendship that exist in groups of people who have something in common are exploited’, Ms Redfern said.
The charges were prosecuted by the Commonwealth Director of Public Prosecutions.
Background
In November 2003, ASIC obtained orders in the Supreme Court of New South Wales banning Mr Orehek from managing corporations for eight years and winding up the remaining companies in the Orehek group, Marriott Properties Pty Ltd and Platinum Finance Group Pty Ltd. Norton Investments was wound up in April 2003 after various creditors commenced proceedings.
When a company has more than 20 investors or raises more than $2 million in a 12-month period, the issuing of securities requires a prospectus or disclosure document to be lodged with ASIC.
ASIC Website: Printed 12/05/2009
