Real estate fraud linked to $10.1m pokie habit

Real estate fraud linked to $10.1m pokie habit

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A real estate director has received a two-year sentence after stealing from her agency’s trust account to subsidise a gambling addiction.

The Parramatta District Court has given Megan Ann Harrod an Intensive Corrections Order, which means she will spend the two years living in the community under strict conditions.

Ms Harrod is a director and company secretary of J&M Harrod. The company trades as Harrods Real Estate and is based in Warilla, 100 kilometres south of Sydney.

NSW Fair Trading said that Ms Harrod is “believed to have defrauded her clients of $789,000”.

REB reported in December 2013 that Ms Harrod admitted stealing from the agency between 2010 and 2012, and using the money to play poker machines at local clubs.

Fair Trading obtained records that revealed Ms Harrod had gambled $10.1 million on poker machines over a seven-year period, including the years covered by her fraud.

The records also showed she won a combined $9.1 million during the same period.

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.

“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.”

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 such as trust account misappropriation.

“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.

REB contacted Harrods Real Estate, but director Stephen Harrod declined to comment.

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