ASIC closes in on shutting down unlicensed mortgage lender



Financial regulator the Australian Securities & Investments Commission (ASIC) has obtained Federal Court orders against Remedy Housing Pty Ltd (Remedy Housing), an unlicensed mortgage lender allegedly engaging with customers primarily from the Pacific Islander community in Australia and New Zealand.

ASIC obtained interim orders and injunctions from the Federal Court against Brent Lindsay Smith, Mahmoud Khodr, and Trevor Leota (defendants) and Remedy Housing.

Remedy Housing is operated by Smith and Khodr as director and secretary, respectively, with Leota also involved in the business. It advertises on its website and social media platforms that it can provide customers with “interest-free mortgages” upon receipt of a $10,000 deposit.

The financial regulator has alleged that the three defendants and Remedy Housing are:

  • Carrying on a financial services business and engaging in credit activities without holding an Australian financial services license or an Australian credit license;
  • Engaging in misleading or deceptive conduct while carrying on a financial services business;
  • Making false or misleading representations regarding financial services and products that involve interest in land;
  • Giving false or materially misleading information when engaging in a credit activity; and
  • Obtaining property and financial advantage by deception.

Between November 07, 2019 and March 10, 2021, around 123 potential customers deposited a total of $1,484,250 into a bank account in Remedy Housing’s name, ASIC alleged.

On June 17, 2021, the Federal Court found a need to protect aggrieved persons and made the following orders on an ex-parte basis:

  • asset preservation orders against the defendants, their wives, and Remedy Housing;
  • orders requiring the disclosure of information to ASIC against each of the defendants, their wives, and Remedy Housing; and
  • travel restraint orders for the defendants.

On June 24, 2021, the court also made further orders restraining the defendants and Remedy Housing from carrying on or promoting the business. It also ordered the defendant and the company to take down the website and associated social media promotions.

The court made the orders pending a final hearing into the conduct of the defendants and Remedy Housing, in which ASIC is seeking a permanent injunction preventing the Remedy Housing business from operating.

ASIC’s investigation into the defendants and Remedy Housing remains ongoing.

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