James Vertzayias faces sentence for $1.18m CBC Group fraud at Kingsgrove
A bodybuilding developer is facing jail time for swindling more than $1.18 million in payments from a construction company for ongoing work on a ghost project that was never approved.
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A bodybuilding developer is facing jail time for swindling more than $1.18 million in payments from a construction company for ongoing work on a ghost project that was never approved.
Sydney businessman James Vertzayias will soon be punished for dishonestly obtaining $1,185,355.74 from CBC Group, duping them with fake invoices and phony government documents between November 2014 and December 2015.
The twice-bankrupt Vertzayias saw his sentencing for the sham - carried out for more than a year after the development was rejected - delayed last week owing to concerns for his health.
Court documents have revealed how the 50-year-old was enlisted by an old associate and CBG Group chief executive Karl Martin-Weber in March 2012 to make a rezoning application to Hurstville City Council for an industrial site at 3 and 2 The Crescent, Kingsgrove.
CBC Group owned the land at number 3, and sought to change the zoning from ‘light industrial’ to ‘medium density residential’.
Vertzayias was solely responsible for managing the planning proposal and organising payment for contractors related to the plans, with CBC Group adopting a “hands off” approach.
According to court documents, that allowed him free reign to claim payments for work that never existed by forging invoices from companies engaged in the early planning stages.
The proposal itself was twice rejected by Hurstville City Council, in August and November 2013, with an appeal knocked back by the Sydney East Joint Planning Panel on June 25, 2014.
Vertzayias, however, did not divulge that to CBC Group and would later provide fake council minutes and letters purporting to be from the Department of Planning’s deputy secretary to suspicious company bosses when threatened that the money would stop.
In mid-2015 CBC Group director John Warton formally requested a copy of minutes from Hurstville City Council but was repeatedly told by Vertzayias, “They aren’t public record” or “I can’t get them”.
Eventually he was read the riot act by chairman Andrew Vlachos: “They are public record. If they aren’t produced by the next meeting, there will be no more payments.”
CBC Group accepted the forged documents as genuine, court documents state.
Earlier in October 2014, six weeks after the application was exhausted Vertzayias had begun submitting further invoices – the first for $155,911 of which $122,208 was apparently related to work for the proposal.
Court documents reveal the highest invoice was for $170,095.10, submitted on February 28, 2015, while the lowest asked for $44,000.
He submitted 11 invoices for his work, paid in good faith by CBC group, for a total of $828,313 until Sept 29, 2015.
Vertzayias also claimed hundreds of thousands of dollars under the letterheads of contractors, including architect firm Allen, Jack and Cottier, traffic consultants Traffix and electrical engineers Shelmerdines, for work they did not do though 12 false invoices submitted between May and November 2015.
Vertzayias was bankrupt for three years between October 2012 and 2015, with the invoices being paid first into an account under the name of his friend’s company Red Fox Rural Pty Ltd and later his own company Project Group Management Pty Ltd.
Agreed facts state that he declined to respond to the allegations upon his arrest at Kogarah police station in February 2019, but was more forthcoming in a chat with Mr Martin-Weber.
“I had to do it to pay the money to the tax office and KPMG,” he told his former friend, according to court documents.
CBC Group took Vertzayias to the Supreme Court in April 2016, and on August 18, 2016 he was ordered to repay $810,140.92. He paid back about $100,000 before declaring bankruptcy again.
He has now pleaded guilty to one count of obtaining financial advantage through deception and two counts of using a false document to obtain a financial advantage.
Three other counts of using a false document to obtain a financial advantage will be taken into account on sentence.
Vertzayias had earlier faced 55 offences in total including several counts of making a false document to obtain financial advantage and dishonestly obtaining a financial advantage by deception.
Barrister Matthew Breeze told Downing Centre District Court on May 28 the defence was awaiting medical reports outlining the impact of imprisonment on his client’s medical conditions.
Judge Deborah Sweeney adjourned proceedings so she could consider the reports before handing down her sentence.
“I have to know the extent of his medical conditions and the extent of the effect of him going to jail,” she said.
The once-successful property mogul went bust October 2012, with media reports at the time stating he owed $60 million to creditors.
Among those lining up for unpaid debts reportedly included banks ING and St George, who he owed $26 million and $7.6 million respectively, according to the reports.
Vertzayias’ company Globe Project Group went into receivership in 2009, after two decades and $505 million worth of developments including the Kilns at Brookvale and Elandra at Bundeena.
The company was established in 1996 and handled everything from luxury beachside apartments to warehouse refurbishments and mixed-use development projects.
The hulking father turned to competitive bodybuilding and has competed in several international events, winning the over 40s’ title in the 2016 Southern Hemisphere Bodybuilding Figure and Fitness Championships.
Vertzayias’ matter will return to court on June 18 to set a new sentence date.