PHOTO: THE AUSTRALIAN REAL ESTATE TRAINING COLLEGE
A former Rainbow Beach real estate agent has been convicted and imprisoned following an Office of Fair Trading (OFT) investigation into the misuse of trust money.
Ian Andrew Phillips, previously the sole director and principal licensee of Think Tank Management Pty Ltd, pleaded guilty in the Brisbane District Court on 5 July 2022 to dishonestly using trust account money for his own purposes.
Phillips was sentenced to three years in prison and will serve a minimum of six months.
In March 2021, Phillips’ business partner, Tony Charles Freeman, also appeared in the Brisbane District Court and pleaded guilty to dishonestly using trust money. Freeman was sentenced to two years and six months in prison, with his sentence wholly suspended. A conviction was recorded.
The court heard that Think Tank Management Pty Ltd managed Rainbow Beach Resort, providing holiday accommodation and venue hire facilities. A trust account was established by the company to handle funds related to the resort’s management. Although Phillips was the sole signatory of the trust account, he arranged for Freeman, the general manager of the resort, to have electronic access in his absence.
Between January 2017 and February 2019, money from the trust account, belonging to the unit owners, was transferred to the Think Tank Management Pty Ltd business account to cover expenses such as tax debts, staff wages, and superannuation payments.
Email correspondence between the two men revealed that Phillips was aware of the financial difficulties the business faced and approved Freeman’s requests to transfer money from the trust account to the business bank account.
A total of $219,128 was unlawfully transferred from the trust account to the business bank account.
Think Tank Management Pty Ltd went into liquidation on 15 March 2019 after the business was abandoned. Liquidators notified the OFT, which commenced an investigation and froze the trust account.
Affected consumers were compensated through the Office of Fair Trading Claim Fund.
In sentencing Phillips, Justice Ken Barlow QC stated that the defendant used $219,000 of other people’s money to pay personal debts, benefiting from the fraud and committing a serious breach of trust.
Victoria Thomson, Commissioner for Fair Trading, stated that the OFT would not tolerate real estate agents spending money that does not belong to them.
“Trust money must never be taken from a trust account without proper authorisation from the person it belongs to,” Thomson said.
“Agents and their employees cannot use trust money for personal payments or to cover their own business expenses and debts.”
The OFT’s Trust Accounts Guide is a booklet summarising agents’ trust account obligations.
SOURCE: QUEENSLAND GOVERNMENT