Fenbreeze Homes’ Joseph Biju Kavilpurayidathil issued fake insurance documents to clients

A builder whose Ponzi scheme quicky unravelled leaving clients $550k out of pocket and uninsured has done the “absolute minimum” to rectify his damage, a court heard.

A home builder who ripped off multiple customers, by providing fake insurance certificates and forged invoices has done the “absolute minimum” to rectify his damage, a court heard.

Joseph Biju Kavilpurayidathil, also known as Mr Biju, was running a “Ponzi scheme” in a desperate attempt to save his unviable business model, a court heard.

Kavilpurayidathil’s Ferryden Park company, Fenbreeze Homes was placed in liquidation in 2017, after he provided fake building indemnity insurance certificates to multiple clients, leaving them unable to claim for unfinished or substandard work.

In the Adelaide District Court on Monday the prosecutor said Kavilpurayidathil was running a Ponzi scheme with his deliberate fraud.

“He has done the absolute minimum in rectifying the damage that he’s done to not an insignificant number of people’s lives,” the prosecutor said.

Earlier the prosecutor said an immediate jail term was the only appropriate penalty for the deliberate, fraudulent conduct.

“For nearly everybody in the community the purchase of their home is the largest purchase they will ever make in their life,” they said.

“Mr Biju has to have known that … and he’s allowed them to go into this with no insurance coverage.”

Victim impact statements were read to the court on Friday.

General Practitioner Kamal Wellalagodage, who hired Kavilpurayidathil to build three houses for him and his family, said the fraud impacted him significantly.

“As a result of Mr Biju’s actions, I was not able to sleep for months due to ongoing stress and anxiety,” he wrote.

“Our houses were vandalised with tradespeople who had not received money from Mr Biju for their work.”

Home builder Joseph Biju Kavilpurayidathil will be sentenced for ripping off multiple clients. Picture: Lucy Rutherford

Another victim, Matthias Koch, said Kavilpurayidathil’s offending was a “deliberate act from the get go”.

“In the end I feel sorry and am exceptionally disappointed in Joseph as a human being,” he wrote.

James Marcus, for Kavilpurayidathil, 48, told the court he started Fenbreeze Homes in 2014.

“His idea, initially, was to provide … an affordable, fixed-price housing construction option,” he said.

“That was never a viable business model.”

The court heard the company was initially successful and completed 32 houses, before it fell into financial difficulties in late 2016.

The court heard Kavilpurayidathil needed to take on more clients to receive deposits to pay the contractors but the company had already hit its $5m insurance cap.

Under the Building Work Contractors Act 1995, it is compulsory in South Australia for builders to take out a building indemnity insurance policy on all domestic construction projects that require development approval and have a value of $12,000 or more.

The court heard Kavilpurayidathil then provided fake insurance certificates to new clients so he could continue working.

“However the situation didn’t improve, clearly as a result of this flawed business model,” Mr Marcus said.

“At this point Mr Biju was desperate for money and he did not wish to let down his customers.”

Kavilpurayidathil then began issuing fake invoices for work that was never performed.

The father-of-two pleaded guilty to 19 counts of dishonestly dealing with documents.

Mr Marcus said it wasn’t “greed over need” type offending but rather “business naivety”.

“This ultimately resulted … in quite literally a case of robbing Peter to pay Paul in an unsustained and obviously flawed manner,” he said.

Mr Marcus said Kavilpurayidathil was willing to pay back $25,000 per year in compensation until he hits $300,000. That amount is still $250,000 less than requested by his victims.

Judge Paul Slattery will sentence Kavilpurayidathil in July.