Key to Australia Pty Ltd and sole director Graham Scarrott told to pay $1.5m compensation to investors in failed property scheme

A Gold Coast company and its sole director have been ordered to pay more than $1.5 million compensation to 18 people who invested in a Pimpama property scheme which promised profits of up to 300%.

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A GOLD COAST company has been ordered to pay more than $1.5 million compensation to 18 people who invested in a Pimpama property scheme which promised profits of up to 300%.

Key to Australia Pty Ltd, and sole director Graham Scarrott, were also fined $250,000 after pleading guilty to 18 breaches of Australian Consumer Law at Southport Magistrates Court. A conviction was not recorded.

The court heard that between May 9, 2018 and June 12, 2020 Mr Scarrott and Key to Australia marketed housing lots in Pimpama Village as investment opportunities to people in New Zealand and Victoria.

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Investors were told that the land had council approval to be subdivided into three and townhouses built, the court was told.

They were also told that they would make between 150% and 300% profit on their initial investment, and they would be able to sell their newly zoned lots as three separate lots long before they would have to settle the full amount of their initial purchase.

Investors were also promised that their deposits would be refunded if the scheme did not go ahead.

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Housing lots were marketed as investment opportunities to people in New Zealand and Victoria. Picture: iStock

However the court heard that Mr Scarrott or his company never received approval for the subdivision, with requests to subdivide the land rejected on several occasions.

Mr Scarrott and Key to Australia were also said to have been unable to keep their promise to investors to refund their deposits, and to have used $1,712,244 of the consumers’ deposits for their own personal use and for business expenses respectively.

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Attorney-General and Minister for Justice Shannon Fentiman said the Office of Fair Trading, which led the investigation, did important work to protect Queenslanders from being misled by property schemes.

“This matter and its outcome are a reminder to all businesses that operate in the property sector of their obligations and duty to act honestly with consumers,” the Attorney-General said.

“Consumers have every right to expect that representations made to them are not false, misleading or deceptive.

“If real estate agents breach consumer protection laws the OFT will not hesitate to investigate them and take appropriate enforcement action if required.”

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