Remedy Housing officers found guilty of $1.5m ‘interest-free mortgage’ scam

Three fake Victorian lenders are facing up to 15 years behind bars after they were found guilty of swindling nearly $1.5m from over 120 hopeful homebuyers in an ‘interest-free mortgage’ scam.

Three fake Melbourne lenders are facing up to 15 years behind bars after swindling close to $1.5m through an “interest-free mortgage” scheme.

Three fake Melbourne lenders are facing up to 15 years behind bars after swindling close to $1.5m through an “interest‑free mortgage” scheme that defrauded hopeful homebuyers across the country.

Remedy Housing director Brent Smith, secretary Mahmoud Khodr and officer Fue Mano were found guilty of scamming more than 120 customers after promising them an “interest-free mortgage” and title to a home without any credit checks, upon payment of a $10,000 deposit.

A total of $1,484,250 in customer deposits was racked up by the scam.

The Melbourne-based lender, which advertised mainly via the internet, claimed that if they could not provide the interest-free mortgage within a year to the consumer, the deposit would be refunded in full.

But Remedy Housing had no investors or funders, and never provided any mortgages.

Instead the customer deposit funds were transferred into the personal accounts of Smith and Khodr and used to operate and further promote the fraudulent scheme.

Over $775,000 was transferred to Smith and Khodr’s personal bank accounts and at least $130,000 was transferred to overseas bank accounts and invested in cryptocurrency exchanges, according to the judgement of Justice Moshinsky in the Federal Court of Australia.

Remedy Housing had no investors or funders, and never provided any mortgages.

Justice Moshinsky said Remedy Housing nor those operating it held an Australian Financial Services Licence or an Australian Credit Licence.

The company was financed by overseas investors, including former Samoan international rugby union player Trevor Leota.

Remedy Housing was operated by Smith and Khodr as director and secretary respectively.

Mano was an officer of the company who was involved, together with Mr Leota, in promoting the business to consumers, primarily in the Pacific Islander communities in Australia and New Zealand.

Corporate watchdog Australian Securities and Investments Commission led the extensive investigation and said Mr Leota was not charged in relation to this offending.

Following a four-week trial, a County Court of Victoria jury found Smith guilty of seven counts of dishonestly using his position as a director, Khodr guilty of two counts of dishonestly using his position as a director and officer and Mano guilty of 11 counts of dishonestly using her position as an officer, between 2019 and 2021.

The trio are set to be sentenced in September.

They face a maximum penalty of 15 years’ imprisonment and/or a fine of up to $765,000.

The matter was prosecuted by the Office of the Director of Public Prosecutions following an investigation and referral by ASIC.

ASIC chair Joe Longo said the jury’s decision in this case reflected the community’s concern with deception of this scale.

“This prosecution demonstrates ASIC’s commitment to ensuring dishonesty in the credit and financial services industry is penalised,” he said.

Originally published as Remedy Housing officers found guilty of $1.5m ‘interest-free mortgage’ scam