Legal threat over lost life savings against Adelaide accountant George Nowak at Charterhill Group

DOZENS of “mum and dad” investors who fear they have lost their retirement savings are investigating a class action against an Adelaide chartered accountant.

DOZENS of “mum and dad” investors who fear they have lost their retirement savings are investigating a class action against an Adelaide chartered accountant.

The Federal Court has seized the passports of George Nowak and his wife, Betty Dawn Nowak, and frozen their assets — including a for-sale, $4 million -plus home at Springfield , bought in 2012.

The Australian Securities and Investments Commission applied for the Federal Courtcourt action as it investigates the collapse of Mr Nowak’s company, Charterhill Group.

“ASIC is investigating the management and activities of the Charterhill Group, which operated as a ‘one-stop shop’, providing advice to clients on the establishment of self-managed superannuation funds (SMSFs), rollover of existing super funds into an SMSF, sourcing and purchase of investment properties, property management, insurance and taxation,” the regulator said.

One investor said the public needed to be alerted to Mr Nowak’s “web of deceit” because “there may be thousands of investors dealing with him and his associates without knowing what a scoundrel he is”.

So far, there have been unconfirmed reports of at least $10 million of super fund assets at risk, but investors and their lawyers fear this is only the tip of the iceberg.

Mr Nowak, whose Springfield home was bought in 2012 and who claimed to have been an adviser to Prime Minister Tony Abbott on retirement reforms, told The Advertiser last yearthe group had about 3500 “mostly mum and dad’’ clients and offices here and in Victoria, NSW, Queensland and WA.

“That’s 3500 over 30 years. The total number of customers currently aggrieved by the collapse of the Charterhill Group is only around 100,” he said yesterday.

“We are doing everything in our power to help investors.”

The Prime Minister’s office said: “Mr Nowak has never worked for or provided professional advice for the leader’s office.”

Four Charterhill Group companies are under external control since last month.

Heard Phillips has been appointed liquidator to Lending Solutions International and as administrator of Nova Real Estate, while receiver Pitcher Partners has taken charge of EJ Property Developments and Financial Wellness (EZ Residential).

At least 65 investors have contacted Adelaide-based O’Loughlins Lawyers.

“At the moment, it’s still early days but investors have asked about a class action,” O’Loughlins senior associate Michael Connelly said.

“A number of the deposits investors made towards a property investment never made it to their intended destination, for whatever reason.

“We are awaiting the outcome of the ongoing investigations, before we advise our clients any further in that respect.”

As reported in The Advertiser in August last year, Aces Bar & Bistro co-owner Enzo Fantasia is suing Mr Nowak and Charterhill Group for damages over alleged misleading and/or deceptive advice given to him in December 2008 and the period shortly thereafter.

In a statement of claim in the District Court, Mr Fantasia asserts he was given financial product advice in relation to establishing a self-managed superannuation fund and “rolling over’’ his existing super savings into it and then using it to purchase land to build investment properties using the services of Financial Wellness Group (EZ Residential).

The claim asserts Mr Fantasia did not know the vendor of the land was Sovereign Capital, an entity in which Mr Nowak has a “relevant financial interest’’.

Mr Nowak is a director of Sovereign Capital and Financial Wellness Group.

“Investing in EZ Residential ... has been the source of considerable stress and anxiety to Fantasia ... including because of a loss of super savings and further liabilities assumed by Fantasia.’’

The statement alleges Mr Nowak and/or EZ Residential breached fiduciary duties and “put their own interests ahead of Fantasia’s interests’’.

In its defence, the Charterhill Group and Mr Nowak assert “the claims are merely theoretical and hypothetical and are not actual’’.

Brian Smith, of Fulham, said he has been talking to lawyers after he found his family home used as security for investment properties purchased through the self-managed super fund set up by Mr Nowak.

“Nowak’s web of deceit is so widespread, there may be thousands of investors dealing with him and his associates without knowing what a scoundrel he is, and the reality is that this needs to get out.

“I am now stuck with properties in Queensland and NSW that are not worth what I paid for them, a potentially noncompliant super fund, and am owed many thousands of dollars in rent by Nowak. What’s worse is, I asked my friends and family to trust him too.”

“I am still getting payment reminders from Australian Leasecorp (where Nowak is director and which was used to set up rental guarantee agreements on the properties),” Mr Smith said.

Mr Nowak said Australian Leasecorp was not affected by the collapse of the Charterhill Group “although it is part of the Charterhill group, but is structured differently to trade as a separate entity.”

ASIC declined to comment on the reason for or scope of its investigation.

It refused to say if all 23 entities directly linked to Mr Nowak and at least a dozen other entities indirectly linked to him through co-directors, Betty Nowak and other family members — are part of its investigation.

Mr Nowak saidthe otherentities were “always inactive non-trading shell companies”.

But The Advertiser has traced online documents, which show Mr Nowak was signing as “director” of National Edge Group Limited, comprising National Edge Group, Edge Property Services, Edge Accountants and Capital FP Group. A Federal Court directions hearing on the matter is set for June 5.

A former employee and another investor have also claimed that Mr Nowak provided fraudulent documentation to banks to secure loans for clients.

Mr Nowak said he had been “misquoted and misrepresented” and was now “very nervous and extremely non-trusting of media”.

The Charterhill Group was born out of Brown Nowak & Co when its real estate and strategic planning arm established its own identity as CFAS in 1998.

Mr Nowak said plans to list Charterhill Group on the Australian Securities Exchange in a $22 million equity deal with a WA company have now been abandoned.