Block buyer and GST fraudster David Brandi banned from running a company for five years

An accountant turned The Block property buyer who avoided jail over a GST fraud has been banned from running a company.

David Brandi leaves the County Court with his wife Tina. Picture: Andrew Henshaw

A high-flying Melbourne accountant turned The Block property buyer who avoided jail over a GST fraud has now been banned from managing corporations for five years.

The Australian Securities and Investments Commission on Friday disqualified David Brandi, labelling him an inadequate director following his involvement in three failed companies.

The corporate watchdog said Brandi was the director of three Victorian companies — Sputnik Holdings, Independent Tube Mills (ITM) and Melbourne Property Group (MPG) — which owed creditors about $73.7 million.

All three companies had liquidators appointed between 2014 and 2019.

David Brandi, 48, has been banned from being a director of a company.

An ASIC probe uncovered ITM operated a steel manufacturing business and was acquired by Sputnik, while MPG provided business and personal services.

Investigators found Brandi, 48, breached his duties by failing to:

ACT with care and diligence to comply with tax lodgement obligations for both Sputnik and ITM;

TAKE reasonable steps to ensure that Sputnik kept written financial records;

PROVIDE the liquidator of Sputnik with information about the company’s business, property, affairs and financial circumstances; and

MAINTAIN adequate books and records for ITM or provide the liquidator of ITM with the company’s books.

The ASIC investigation also found he “improperly” used his position as director of Sputnik “to gain an advantage for himself or someone else, or cause detriment to the company, by entering into an asset sale agreement with a related entity and leaving large liabilities in Sputnik”.

Brandi also entered into a deed of assignment on behalf of Sputnik, assigning all its rights to claims and insurance policies to a related entity.

This move resulted in an insurance payout of more than $2 million that Sputnik was entitled to being instead paid to the related entity.

His actions, ASIC said, demonstrated “that he does not understand the role and duties of a director or has chosen to not perform them adequately”.

His disqualification comes after the Herald Sun revealed last month Brandi — identified as a mystery buyer of properties from renovation reality TV show The Block — avoided jail over a GST rort.

Brandi duped the Australian Taxation Office by creating false invoices from a deregistered business he once ran with his brother to claim goods and services tax refunds on two financially-struggling property developments.

The Brandi & Co principal pleaded guilty to two counts of dishonestly obtaining a gain from the Commonwealth in Victoria’s County Court.

County Court Judge Trevor Wraight sentenced Brandi to two years jail, but released him immediately on a recognisance order in which he instead has to be of good behaviour for that period.

Judge Wraight said Brandi’s dishonesty was “blatant” and his offending “calculated”.

“Your offending was motivated by the fact you were financially connected to the companies for which you prepared tax documents,” Judge Wraight said.

He said Brandi sought to “prop up” two financially-struggling property developments he had invested in between January to March 2010.

“You had loaned money to the companies,” Judge Wraight said.

“The companies involved were struggling to find funds to complete the developments.

“If you could assist the companies, it protected your investment. Ultimately you stood to gain.”

One of The Block properties bought by Brandi.

Brandi has since sold all The Block properties.

Brandi had invested in Quantum 8 Group’s developments at 16 Bradley St, Newport, and 19 Faulkiner St, Clayton, but he was also hired to do the property development company’s business activity statements (BAS).

The BAS was filed with false invoice amounts for construction costs from Brandi Homes, when it had not completed any work on the projects and was in fact deregistered in 2008.

Brandi claimed GST refunds of $167,589 but the ATO found he was entitled to some, with $135,248.67 being rorted.

Judge Wraight said tax fraud was not a victimless crime.

He quoted a Court of Appeal judgment in an unrelated matter, where the presiding judge labelled tax evasion “not a game”, “brazen”, “a form of corruption” and “insidious”.

“It is theft and tax evaders are thieves,” he said, reading out the appeal judge’s ruling.

Judge Wraight acknowledged the offending happened a decade ago and that Brandi had since developed a large business network, sits on multiple boards and currently operates or has shares in about 15 companies.

He said he is also involved in the community, sponsoring initiatives such as a community swim program and school sporting camps, including an indigenous program for upcoming athletes of disadvantaged backgrounds.

“You also established the charity called the French Rainbow Foundation which supports mens mental health,” Judge Wraight told him.

While not connected to his crimes, Brandi — a Melbourne United basketball team board member — used some of his wealth to snap up four properties renovated by The Block.

They included a home in Richmond and Port Melbourne and apartments in South Yarra and Prahran which sold for a combined $7m — all of which he has onsold.

In a statement released to the Herald Sun, Brandi said he was “relieved” the case was finally over after more than 10 years.

“These matters relate to a long-running family dispute that has been a traumatic experience for me and my immediate family,” Brandi said.

“We appreciate the judge taking on-board my contribution to the community and I would like to thank my family, friends, business partners, colleagues and clients for their ongoing support.

“As far as I’m concerned, this is now in the past and I can move forward in continuing to support my family, my employees and the community.”

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