The regulator has warned property managers against “manipulating” trust accounts after securing a conviction for a major rental fraud.
Megan Ann Harrod from Harrods Real Estate in regional NSW was given a two-year sentence, which she will serve in the community under an Intensive Corrections Order.
The Parramatta District Court’s ruling came after Ms Harrod pleaded guilty to two charges of fraudulently converting money as a licensee, relating to money taken from the company's rent and sales trust accounts.
NSW Fair Trading said Ms Harrod is “believed to have defrauded her clients of $789,000”.
“An examination of the licensee’s accounts by Fair Trading found numerous deficiencies in Harrods Real Estate’s rent and sales trust accounts and uncovered falsified corporate book-keeping records created to disguise and hide the fraud,” the regulator said.
“Investigators also established the defendant had engaged in a type of ‘kite flying’ – manipulating the monthly rental trust account reconciliation by drawing cheques for the payment of fictitious disbursements at the end of each calendar month in order to give the false appearance the account was balanced – to cover up for her unauthorised withdrawals.”
Ms Harrod is a director and company secretary of J&M Harrod, which trades as Harrods Real Estate. The agency is based in Warilla, 100 kilometres south of Sydney.
In December 2013, Ms Harrod admitted stealing from Harrods Real Estate between 2010 and 2012, and using the money to play poker machines at local clubs.
Ms Harrod’s fraud came to light after her father reported the matter to Fair Trading.
The court took into account the fact the Harrod family had repaid money to the NSW Property Services Compensation Fund when deciding on her sentence.
Fair Trading commissioner Rod Stowe said the regulator will punish real estate professionals who commit serious fraud.
“Landlords, tenants and homeowners are entitled to feel confident the significant sums of money they rely real estate agents to hold in trust for them are kept securely in designated trust accounts and the money used for the intended purposes,” he said.
Ms Harrod was permanently banned from the industry in 2013.
RPM contacted Harrods Real Estate, but director Stephen Harrod declined to comment.