"Robbing Peter to pay Paul" - Melbourne real estate agent admits to $245,000 fraud

An experienced real estate agent based out of east Melbourne has admitted to a $245,000 fraud, transferring trust money for personal use.

In the end $70,000 was outstanding.

Paul Pfeiffer, the sole director of Melbourne Deluxe Real Estate Pty Ltd, appeared before the Melbourne Magistrates Court on Wednesday, pleading guilty to nine charges, according to Domain news.

Pfeiffer, 46, used money held on behalf of his clients, pending settlement of houses in Balwyn and Camberwell, on eight occasions, the court heard.

The money was transferred into other accounts for his own use, without permission.

Earlier in May, Consumer Affairs Victoria said it had started criminal proceedings in the Magistrates’ Court of Victoria against Melbourne Deluxe Real Estate Pty Ltd  - trading as Melbourne Deluxe Property - and its director and officer in effective control, Paul Wayne Pfeiffer for alleged breaches of the Estate Agents Act 1980.  

“We are alleging that that in April and May 2016 the company misappropriated approximately $245,000 of trust money and fraudulently converted it for its own use, and Pfeiffer knowingly authorised or permitted the company to engage in this conduct,” it said.

Consumer Affairs investigators searched his Collins Street office after a complaint about non-payment of a deposit at settlement.

In a show-cause document tendered to the court, defending why his license should not be suspended, Pfeiffer said he had been going through stressful and life changing events, including the breakdown of his marriage and the loss of his driver’s licence.

But prosecutor Paul Stefanovic said there was blame shifting by Pfeiffer, who on one occasion said it was an “Australia Post issue”.

Stefanovic also read out to the court text messages sent by the agent to a vendor he owed money to.

The agent’s lawyer Zig Zayler said his client had “robbed Peter to pay Paul”, meaning he owed money to another client whose money he’d illegally accessed.

In the end some $70,000 was outstanding.

Zayler applied to have the case heard by a magistrate but the prosecution argued it should be heard in the County Court, which has stronger penalties.

Magistrate Simon Zebrowski referred it to the County Court in October.

"Every day thousands of people sell their houses and businesses and they go through these agents. It’s an enormous breach of trust when an agent does not conduct themselves in a way he or she should,” Magistrate Simon Zebrowski said.