Mo Du alleged to have sold commercial properties to Chinese investors at an inflated price, before spending funds on luxury cars

A man allegedly sold three Adelaide properties to Chinese investors for millions more than they were worth – then bought luxury cars, a court has heard.

A man alleged to have sold commercial properties to Chinese investors at inflated prices used the funds to buy luxury items including a Ferrari, a court has heard.

Mo Du, 35, is standing trial in the District Court after he was charged with nine counts of deception for selling the commercial properties between 2014 and 2017.

Kosmas Lesses, for prosecution, said in his opening statement Mr Du is alleged to have “deceived the complainants by misrepresenting to them the price” of three properties – one on Waymouth St in Adelaide, one in Thebarton and one in Kent Town – and using funds for personal investments.

“A significant portion of the complainants’ purchase funds was allegedly on unrelated things like house purchases, expensive motor vehicles, personal expenses and large ATM cash withdrawals,” he said.

Mo Du allegedly bought Ferraris and other luxury cars with the money.

“Some $393,000 was spent on the purchase of two homes, one for the business partner and the other belonged to Mr Mo Du. Some $186,000 was spent on expensive motor vehicles, which included a Ferrari, a Lamborghini and I think it’s a Mercedes Benz AMG.

“Most of the spending on these cars was done in the name of companies and the accused personally allegedly made large cash withdrawals from several bank accounts to the total value of $77,000.

“It shows what the accused was motivated or thinking about when he was getting a pool of funds as a result of deceiving them about the property prices.”

Hongyu Zhao, 51, who was one of the investors, said he and his business partners trusted Mr Du given one of them having an uncle-nephew connection.

“Mr Lyu Dong, in front of me, placed Mr Du quite often and he believed Mr Du was intelligent and capable,” he said while giving evidence.

“He was the example of his peers and he had studied school in Adelaide.

“In the first week, while I was staying in Adelaide, he demonstrated courtesy and punctuality and I had a good impression of him and I wanted to support him to complete his first project.”

Mr Lesses said the first property sold, on Waymouth St, was confirmed in LTO property records to be worth $2.63m but was sold to the investors for “around $4.35m”.

“So without speaking English, and by placing complete trust and faith in the accused to effect the purchase of the properties, you will see, or so the prosecution says, how these affluent overseas investors were in a vulnerable position that was exploited by the accused,” he said.

Chris Kummerow, for Mr Du, said the “complex commercial transactions” involved three “sophisticated, savvy and wealthy Chinese businesspeople who were investing in projects here in Australia worth millions of dollars”.

“They are not mum and dad investors who you might think might be ignorant to the nuances of these complex business deals … these people are no fools,” he said.

“We, of course, say that there was no misrepresentations made by Mr Du, statements were made.

“Those statements were made in the course of these large commercial deals which involved the complainants investing into property development.”

The trial before a jury continues.