An agency director has been slapped with a 10-year ban after making unauthorised withdrawals from a trust account to save his failing business.
Consumer Affairs Victoria announced that Scott Hoare may not hold a licence or act as an agent’s representative until October 2024. His licence was suspended in October 2014.
Mr Hoare, 40, of Tanjil South, was previously the sole director of SLGH, which traded as Stockdale & Leggo Trafalgar in regional Victoria.
The Victorian Civil and Administrative Tribunal (VCAT) found that Mr Hoare fraudulently withdrew $37,490 from the trust account and also failed to transfer $5,090 of rent into the account.
REB offered Mr Hoare the chance to comment but he declined.
Stockdale & Leggo chief executive Peter Thomas told REB it was the group’s internal structures and policies that brought the matter to the attention of the authorities.
“Scott was expelled from the Stockdale & Leggo group on 19 March 2014 as soon as these issues became apparent, and it was through our due diligence that the authorities were able to act so quickly,” he said.
“Stockdale & Leggo are very diligent about their members complying with the law, and if it comes to our attention that somebody is not complying with the regulations, we take action to investigate immediately and act accordingly.”
According to VCAT, the trust account fraud involved “10 instances of early sales commissions drawn, cash deposits not banked and unconfirmed disbursements” between July 2013 and September 2013.
Mr Hoare transferred that money into personal bank accounts or into his firm’s overdraft account, according to the tribunal.
A staff member who had suspicions about Mr Hoare was regularly fobbed off with excuses about why money was missing, VCAT revealed.
Mr Hoare told the tribunal that he used the missing money to save his business – although he conceded during cross-examination that some of the money was used for personal purposes after he was confronted with evidence that he had made withdrawals at a casino.
Mr Hoare said that his problems began in late 2012 or early 2013, when he moved to a larger office and the costs of the new fit-out blew out from about $40,000 to $100,000.
“By around early 2013, he was under pressure: an order had been obtained against SLGH for $8,500 in respect of signage and the sheriff was seeking to collect the debt,” the tribunal heard.
“Further, he owed superannuation to staff and had a tax liability (outstanding tax plus penalties plus interest), which together totalled around $180,000."
Mr Hoare also told VCAT that the bank was putting pressure on him regarding a business overdraft and had raised the possibility of repossessing his house.
“He accepted that he had a period of stress and that at that time he was not of good character,” the tribunal heard.
“He said he had changed: he has acknowledged what happened, paid the deficiencies back and realised there were system problems.”
ASIC records show the Australian Taxation Office filed a winding-up application against SLGH, which was liquidated in June 2014.
[Related: Agent punished for trust account breach]