Investigation into alleged price fixing on Mermaid Beach to continue in 2012
Investigations into allegations that wealthy investors were duped into buying multimillion-dollar properties on Mermaid Beach on the Gold Coast as part of an elaborate price-fixing scam are continuing.
The Queensland Office of Fair Trading has confirmed to Property Observer that it is continuing to investigate such allegations.
The inquiry dates back to May 2010 when then Queensland Minister for Fair Trading Peter Lawlor and current Labor member for Southport brought allegations of investment scam to the attention of the Queensland Police.
At the time Lawler came to the conclusion that the transactions “stink to high heaven”.
“There's a fictitious component in the transactions. It makes you wonder what went on with all of those [Mermaid Beach beachfront] properties.
“The values in that area went crazy over a short period of time. There was almost a stock market-like frenzy about it as people were getting in and out and making a couple of million dollars at a time the agents were also receiving very big commissions,” Lawler said at the time.
Real estate agent Rod Lambert made the allegations in late May 2010.
Lambert, who personally lost millions on a redevelopment of flats on Albatross Avenue, claims prices in Mermaid Beach had been inflated by “a handful of sophisticated investors using an elaborate scheme involving ‘put and call options’” – a legal way of buying a house then reselling it before settlement.
In the case of Mermaid Beach transactions it is alleged that the scheme was used to inflate prices with the money for the higher-priced second sale never changing hands, but the higher sales price recorded in the official property records.
Lambert claims that property valuers were misled about the worth of Mermaid Beach properties because official sale contracts and registry data contained fictitious information about previous sales prices achieved.
Recent falls have included a three-bedroom Hedges Avenue beachfront cottage that sold post-auction in late December at a discount of about 46% on its 2008 purchase price and another property also on Hedges Avenue selling at a loss of close to $10 million.
In an earlier version of this article, Property Observer incorrectly reported that Queensland Police and Australian Crime Commission were jointly investigating property scams on Mermaid Beach.
There is a joint operation which resulted in the disruption of a serious and organised investment scam run by a company known as West Trade or Atlas Lead Generation, based on the Gold Coast.
This investment scam is entirely separate from the Mermaid Beach property scam.