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A Victorian man who allegedly scammed two Korean investment firms into investing $395 million in phony National Disability Insurance Scheme-related property deals has been charged with fraud.
Victoria police have charged Demetrios “James” Charisiou with five counts of obtaining financial advantage by deception. The charges were laid following an investigation by the police’s fraud and extortion squad, according to The Sydney Morning Herald. Charisiou, who has not yet entered a plea, is due to appear at Melbourne Magistrate’s Court on March 26.
The charges relate to financing that was allegedly obtained through fraudulent means in 2019, when Charisiou was an employee at Melbourne property company LBA Capital. The financing was supposedly for the purchase of apartment buildings, including the Australia 108 apartment tower in Melbourne, the Continental Hotel development in Sorrento and an apartment development in Moone, the reported.
The alleged scam was first reported in 2019, when Korean investment houses JB Asset Management and KB Securities took a civil action to the Supreme Court of Victoria to recoup the $295 million they had invested with LBA. The money invested was on behalf of Korean pension funds, which hold the superannuation entitlements for workers in the country, according to the Herald.
The companies alleged that LBA’s representative had forged phony letters of support from Liberal Senator Sarah Henderson and registered a company under a name that was similar to that of property company LendLease’s main wholesale investment vehicle. They also accused representatives of LBA of presenting themselves as official representatives of the NDIS. The Korean funds believed the $395 million they invested though LBA would be used to purchase apartments that would be rented under the NDIS program.
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The Korean companies told the Supreme Court that although $337 million was returned to them and $15 million worth of property purchased with their money had been located, there was still $40 million of their money that had yet to be returned.
The NDIS said there was no record of LBA receiving funding through the scheme, and the company was not registered as one of its property partners, the Herald reported.
“It is important to note that [specialist disability accommodation] funds are not paid to developers in advance,” the NDIS said in a statement. “Once a dwelling is completed and enrolled, SDA payments are made annually from a participant’s NDIS plan.”
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