Mayfair 101 boss James Mawhinney charged with four breaches of the Corporations Act

The boss of a failed Queensland tourism investment scheme has been dramatically arrested in an escalating stoush with Australia’s corporate regulator.

James Mawhinney outside the Melbourne Magistrates Court after his hearing on Tuesday. Picture: Luis Enrique Ascui

A series of transactions over a former Venetian monastery island have led Mayfair 101 boss James Mawhinney to be charged with four counts of dishonest conduct.

Mr Mawhinney is a former buyer of Dunk Island and boss of a failed tourism scheme for Far North Queensland. He appeared in court on Tuesday over allegations levelled by the Australian Securities and Investments Commission that he disguised the owner of an island in the Venetian Lagoon in documents to a trustee.

Mr Mawhinney, who rose to prominence in 2019 after revealing a $1.6bn redevelopment plan for Dunk Island and Mission Beach in Far North Queensland, has been at war with ASIC for years after the regulator sought to scuttle his plans.

Mr Mawhinney’s Mayfair 101 group raised more than $210m from 128 investors after a national advertising scheme, which the regulator branded false and misleading.

But Mr Mawhinney’s barrister, Robert Richter, KC, told the Melbourne Magistrates Court on Tuesday there was “no damage alleged” by ASIC or allegation of loss as a result of the scheme.

Mr Richter told the court Mr Mawhinney would seek to “demonstrate malicious prosecution” unless ASIC dropped its case.

A charge sheet shows Mr Mawhinney is alleged to have engaged in dishonest conduct by providing documents to Vasco Trustee, which acted as trustee for IPO Wealth Fund – a subsidiary of the Mayfair group.

ASIC claims Mr Mawhinney misrepresented that IPO Wealth Group owned two Italian companies, Poveglia S.R.L. and Retta S.R.L, “when it did not”.

These companies were the supposed owners of Isola San Spirito, an island off the coast of Venice.

Mayfair 101 chief James Mawhinney enters the Melbourne Magistrates Court on Tuesday. Picture: Enrique Ascui

Mr Mawhinney bought Isola San Spirito in 2018 after it sat on markets for several years. It was first for sale in 2012 advertised for €28m.

However, ASIC alleges, the holding company had been substituted by another company as the purchaser of shares in the island, in breach of the Corporations Act.

The document alleges Mr Mawhinney directed Di Li, also known as Lydia Lee, to send the asset summaries to Vasco Trustee.

Each charge carries a maximum sentence of 15 years’ prison and will be prosecuted by the Commonwealth Director of Public Prosecutions after a referral by ASIC.

Mr Mawhinney is due back in court on June 28.

The charges against Mr Mawhinney come after ASIC told him several days ago he faced arrest.

This came as the two sides prepared to face off in court as Mr Mawhinney sought to have parts of ASIC’s case against him removed.

The two sides are to face a retrial of ASIC’s earlier moves against him, where the regulator sought to place a permanent restraint on Mr Mawhinney advertising financial services.

Mr Mawhinney flew in from overseas on April 5 and was ordered to surrender his passport and reside at an address in Port Melbourne.

He faces seven bail conditions.

ASIC has previously secured $30m in fines against Mayfair while Mr Mawhinney has taken legal action against the regulator’s deputy chair, Sarah Court.

Mr Mawhinney has claimed Ms Court defamed him in a media release, the latest allegation he has lobbed against the regulator after earlier sending concerns notices to former ASIC deputy chair Karen Chester.

The IPO Wealth Fund was one of several products Mr Mawhinney spruiked through Mayfair, with money raised by the investment scheme loaned to special-purpose vehicles.

The IPO Wealth business was put in receivership in May 2020 and ordered to be wound up in September that year.

Noteholders were told in early 2020 that interest payments and redemptions would be suspended after IPO Wealth failed to make payments.

The fund was also the subject of a class action brought by law firm Slater and Gordon against Vasco Investment Managers, the trustee of the fund, and DH Flinders.