Inside the rise and fall of the Members Alliance cold-call empire
THE family of the man behind the $40 million collapse of the Members Alliance property investment empire is getting a taste of the pain so many clients have faced.
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WHEN Richard Marlborough drove his $680,000 Rolls Royce Wraith inside the double garage of his Gold Coast mansion on February 20 this year, the police were waiting for him.
He was led to the kitchen then handcuffed before being escorted to an unmarked police car parked across the road, next to his wife Deborah’s Porsche.
It was common for her Boxster to be out on the street, making way in the garage for his Ferrari 458, Aston Martin Vantage, or — as was the case the day the police descended — the family’s four-seat golf cart.
In recent times there has been less of a fight for space in the garage. When he declared bankruptcy in July last year, Marlborough was down to just one car, the Rolls.
It was repossessed in April this year with $400,000 still owing.
RELATED: How the Marlboroughs’ dog has its own Mercedes
Mrs Marlborough has recently had to offload the Porsche as well as her Mercedes Benz SUV.
Next to go should be the Hope Island house itself, along with two neighbouring lots, one of which is consumed with a practice golf green and bunker. They have a combined worth of more than $3 million. The net proceeds have to be paid to the Queensland Supreme Court.
As the Marlboroughs’ assets dwindle, their legal woes mount.
Richard is defending criminal fraud charges brought by the police. And, according to documents filed with the Supreme Court, his lawyers expect both he and Mrs Marlborough will be hit with civil and criminal proceedings by the Australian Securities and Investments Commission (ASIC) for alleged breaches of the Corporations Act.
The Marlboroughs’ lifestyle was funded by people such as Satomi and Bronson Hetet.
After receiving a cold-call from Members Alliance in 2013, the Gold Coast couple bought land at Parkes in NSW.
“The house was meant to be finished inside six months,” Mrs Hetet said yesterday.
It took three years. Such was the financial burden of carrying loans and other costs without rent, the couple had to delay having children. Only after they were compensated by ANZ were they able to start a family. Kaiza was born in November last year.
MORE: How we broke the ‘Home and Hoaxed’ story
For other clients, the impact has been even more severe.
One investor threatened to kill himself in a Members Alliance office. But he backed down after realising it would affect the people there for the rest of their lives.
The investor had lost a significant amount after investing with Members Alliance.
However he told News Corp Australia that was not the trigger for his storming the office. What set him off was answering his parents’ home phone one day to hear a Members Alliance cold-call sales representative trying its spiel on them.
Following his arrest, Marlborough was charged with one count of fraud.
Court documents allege between November 2013 and October 2015, he dishonestly induced ANZ to deliver nearly $1.8 million to Members Alliance’s wholly owned subsidiary Image Building, of which he was a director.
In March, Queensland Police also charged Marlborough, David Domingo and Colin Macvicar with the fraud offence “dishonestly causing a financial detriment to persons investing in properties”, describing the trio as “company directors” of Members Alliance.
All three are defending the charges. Domingo’s lawyer told News Corp Australia his client “was not ever a director of Members Alliance”.
So-called pre-claiming — obtaining payments from banks for work not done — forms part of the police case against them.
In preparing the case, police interviewed Members Alliance clients who alleged claims were was submitted to lenders without their knowledge or consent. Some customers have accused Members Alliance of forging the paperwork.
The charges were laid following a year-long investigation by the police financial and cybercrime group, the Queensland Building and Construction Commission and ASIC.
Documents obtained by News Corp Australia under freedom of information laws showed that by early 2016 the QBCC had estimated at least 93 consumers across the country — including 20 in NSW, nine in Victoria, 21 from WA, two from SA and nine from Queensland — were facing an average loss of $130,000 each or a combined $12-14 million on questionable builds in the sunshine state. NSW authorities have identified at least 10 unfinished Members Alliance properties.
An internal QBCC report on the investigation said “most victims are interstate and rely on photographs of progress from Members Alliance. In many cases, the photographs do not depict the victim’s dwelling … some victims believe their property is at lockup stage when in fact there is nothing more than a slab”.
Members Alliance group companies went into voluntary administration in July 2016. Its debts are now estimated at about $40 million.
The following month its legal counsel Liam Young registered a new company, Benchmark Private Wealth. He was its sole director.
In two separate actions, ASIC has told the Queensland Supreme Court it believes the transition of income streams from Members Alliance to Benchmark may have been phoenix activity.
Mr Young has not been charged with anything and denies any wrongdoing.
Benchmark went into liquidation in November last year and owes creditors more than $1.6 million.
In an affidavit filed with the court, ASIC investigator Paul Dunn alleges Richard Marlborough was illegally pulling the strings at Benchmark as a “shadow director”. A report filed with the court by the liquidator of both Members Alliance and Benchmark Mike McCann accuses Marlborough of “improper use of position”, “reckless or intentional breach of duty” and “managing a corporation while disqualified” due to being a bankrupt.
He denies the allegations.
“It appears that the beneficial ownership of the majority of the companies in the Benchmark Group may be ultimately associated with Braiden Marlborough, son of Richard Marlborough,” Mr McCann reported.
Braiden Marlborough has not been accused of breaching any law.
Mr McCann’s report accuses Braiden’s wife Maighan Brown of a breach of the Corporations Act for allegedly not complying with her statutory director’s obligation to provide assistance to him. Ms Brown has denied even knowing she was a director.
Braiden and Ms Brown married in July last year, after a six-year engagement. The MC at the high-flying couple’s wedding was former X Factor and Home and Away star Luke Jacobz.
He had become close to the Marlborough family after hosting the 2012 Members Alliance Christmas party.
Jacobz soon discovered he and Braiden shared a birthday, giving them another reason to party together.
According to court documents, when ASIC lawyers asked Jacobz who he knew in the family, he said Richard and Deborah, along with their children Ali and Braiden, plus Deborah’s cousin Ralph and Richard’s mother, ex-wife of controversial former West Australian politician Norm Marlborough.
The mother’s name “has escaped me right now,” he told the lawyers. “She comes and cleans the house.”
“Their house or your house?” one asked.
“Their house,” he said. “When I go and stay with them, I tend to sleep in a bit because we tend to party on into the night, so I’d wake up to the vacuum cleaner going.”
Around the time of the wedding Jacobz was sitting on Richard and Deborah’s couch and said “I’ve got some money now. I wouldn’t mind, you know, maybe buying something else”.
He had already bought an apartment in Airlie Beach through Members Alliance — fee-free, because he was a “friend”.
But instead of being pointed towards another property, he was encouraged to provide a loan to a company owned and directed by Mrs Marlborough on the promise of a 25 per cent return.
He nominated the amount: $100,000. As News Corp Australia revealed earlier this month, Jacobz’s money was mainly used to pay Richard and Deborah Marlborough’s personal bills, including loan payments on the Rolls Royce.
Braiden was sent $20,000 by his parents. He transferred it to Mr Young, who sent it to Benchmark’s account.
ASIC’s Paul Dunn said in an affidavit that the Marlboroughs misled Jacobz and “applied the proceeds of the loan for their personal use and in furtherance of unlawful phoenix activity involving Benchmark, which was likely trading while insolvent when those proceeds were applied to it”.
The Marlboroughs deny any wrongdoing and there is no suggestion Jacobz was anything other than an alleged, unwitting victim.
In another document filed with the court, Mr Young confirms the liquidator Mr McCann’s report, telling ASIC the original plan for Benchmark was for Braiden to be the director. But the plan changed due to Richard’s concerns about negative press.
“It was pretty clear that there’d be at least some sort of bad coverage,” Mr Young said.
“And I recall at one stage just saying — Richard saying, ‘Well, look, I don’t know if I want Braiden to be a director just because it might hamper Benchmark being able to launch with a bit of clear air, for lack of a better term’.
“So I sort of, after a couple of conversations, said, ‘Well, look, I’ll step in for a period of six months and allow the dust to settle and then, you know, I’ll step away.”
But the dust did not settle and won’t for some time yet.
The cases against Marlborough, Domingo and Macvicar are listed for mention in Brisbane Magistrates Court next month.
john.rolfe@news.com.au
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Originally published as Inside the rise and fall of the Members Alliance cold-call empire
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