Court Acts To Prevent Brothers Fleeing

The Age

Thursday November 3, 2005

LEONIE WOOD and BRIDIE SMITH

A FEDERAL Court judge has barred two principals of the failed Money for Living retirees financing group from leaving the country and ordered them to surrender their passports.

The court order yesterday came after the Australian Securities and Investments Commission received a tip from Victoria Police claiming that Stephen Mark O'Neill and his brother Gary O'Neill, both British citizens, might try to leave the country on false passports during the Melbourne Cup racing carnival.

ASIC obtained an interim injunction against the O'Neills on Friday, and that order has now been extended to December 16. Justice Ray Finkelstein yesterday said Stephen O'Neill, a convicted fraudster and former bankrupt, had not yet complied with last week's order to hand over his passport. He said while O'Neill may not have understood the order, he may also be trying to evade service.

He noted that O'Neill was trying to sell some assets - he has offered his black Jaguar XKR for sale on the internet for $125,000, and is selling a property at Cranbourne - and while the proceeds might be used to pay legal fees "on the other hand, there may be a more insidious reason for the sales".

The court on Friday heard evidence from police acting commander Richard Grant, of the major drugs and organised crime investigation units, who said one of his unregistered informants that morning told him that the O'Neills planned to flee the country using false passports.

Stephen O'Neill was released from jail in July 2004 and is banned from managing or directing companies until 2009. ASIC has told the court that although O'Neill was disqualified, he acted as the "alter-ego" of Money for Living, employing all the staff and taking charge of its operations.

Money for Living was a widely marketed scheme that bought 117 houses from elderly retirees at what Justice Finkelstein called "a substantially discounted price". The pensioners could stay in their homes until they died and they were to receive a monthly stipend of $500-$1000 for a set number of years.

But Money for Living's business model relied on it selling the properties, and when solicitors acting for about two-thirds of Money for Living's clients put caveats on the properties in July, the company's income stream dried up.

It was put in the hands of administrators in late September, triggering a complex dispute about who now owns the homes.

As well, financiers that provided mortgages to Money for Living have said that they were deceived because they were not told about the retirees' lifetime tenancies, and ASIC claims that Money for Living's promotional material contained false and misleading claims about the scheme.

Justice Finkelstein said yesterday there was "every indication that the vendors of the properties have been imposed upon" as well as "indications that there have been breaches of the ASIC Act and the Corporations Act, which requires full investigation".

Gary O'Neill's lawyer, Gordon Campbell, objected to the travel ban, saying it was "unfair" and "inequitable".