Real estate agent and resort manager jailed for taking unit owners money to pay debts

A resort manager and real estate agent has been jailed after pleading guilty to using rent money owed to unit owners to pay personal business debts.

A real estate agent who bought a resort’s management rights for a dollar, hoping to later sell it for a profit, has been jailed for using more than $219,000 of other people’s money to pay debts.

Ian Andrew Phillips, 67, pleaded guilty in the Brisbane District Court on Tuesday to receiving amounts of money belonging to others, as a real estate licensee, and dishonestly converting more than $219,000 to the business, Think Tank Management.

The court heard money paid by people renting holiday units at Rainbow Beach Resort, which was owed to individual unit owners, was transferred from a trust account into the business account.

The court was told Phillips and his friend Tony Charles Freeman, 67, had decided to buy the management rights to the resort, at 12 Rainbow Shores Drive, Rainbow Beach on the Sunshine Coast – a strata title resort with many unit holders – with a plan to turn it around and sell it for a profit.

Ian Andrew Phillips, 67, appeared in the Brisbane District Court on George St. Picture: John Weekes

Phillips, the sole director, owned 50 per cent of the shareholding, with Freeman’s wife holding the other 50 per cent, and Freeman paid a small wage to be on-site manager.

Freeman’s wife is not accused of any wrongdoing.

Although Phillips, who had obtained a real estate agent’s licence, was the only person entitled to operate the trust account, he arranged for Freeman to have internet banking.

Crown prosecutor Bruce Mumford said from 2017 to the end of February, 2019, money was wrongfully moved by Freeman, at the direction of Phillips.

Attempts to sell the business after it failed to make a profit were unsuccessful and a receiver was appointed, identifying $223,000 had been taken from the trust account.

Judge Ken Barlow said most owners were compensated for lost income, from an Office of Fair Trading claim fund, but $10,000 was not repaid.

He said one owner of several units initially lost $92,000 as a result of the illegal transfers.

Freeman co-operated with Fair Trading, divulging thousands of emails that showed Phillips was aware of and involved in the illegal activity, Mr Mumford said.

A spread sheet revealed the amount dishonestly converted was $219,128.

A real estate agent has pleaded guilty to using $219,000 of other people’s money to pay for debts while owner of the management rights of Rainbow Beach Resort. Picture: Supplied

Freeman pleaded guilty to the same charges and was sentenced in March 2021 to two and a half years’ jail, immediately suspended for an operational period of three years.

Judge Barlow said although Freeman was the on-site manager, he and Phillips were in relatively constant contact about business expenses and withdrawal of funds.

“You were well aware this was happening, although you may not have been aware of the overall total that was then defrauded from the owners,” Judge Barlow said.

He said the two men engaged in an unprofitable joint venture and agreed to try to forestall its collapse by taking other people’s money in the hope they would be able to turn it around and repay the trust account.

“You didn’t go into this transaction intending to steal from other people, you just found yourself doing so in order to overcome what appeared to be a serious financial position into which you led yourself,” Judge Barlow said.

The judge said Phillips, who appeared in Brisbane District Court, had a good personal and business record. Picture: Supplied

He said Phillips had a very good personal and business record.

He had previously worked in catering businesses and in 2001 had set up a consultancy business representing Indian and Middle Eastern hotels.

Since his arrest Phillips, who has been selling television on commission, has lost his real estate licence and still owes a debt of about $140,000 to the Australian Taxation Office, the court heard.

The judge said Phillips had lost his home and had incurred at least $220,000 in personal loss, but he would have been liable for much more if he had not used other people’s money to pay debts.

“To that extent you benefited from the fraud,” Judge Barlow said.

He sentenced Phillips to three years’ jail, suspended after six months, for an operational period of three years.