Fraudulent property developer given four year jail sentence
Former Ralan Group Managing Director William O’Dwyer, described as Australia's Bernie Madoff, has been sentenced to immediate imprisonment after pleading guilty to six offences of obtaining a financial advantage by deception.
The former managing director of a residential property development company that perished owing $323 million to unsecured creditors has been sentenced to four years in prison.
Former Ralan Group Managing Director, William O’Dwyer, was sentenced after pleading guilty to six offences of obtaining a financial advantage by deception.
The District Court of NSW on Friday sentenced Mr O’Dwyer to four years imprisonment with a non-parole period of two years and four months.
The Ralan Group is a Sydney-based entity that sold, developed, and managed companies from 2014 to 2019.
After the initial charges were laid in November, Matthew Bransgrove, from Bransgroves Lawyers, told A Current Affair, “He was basically Australia's Bernie Madoff.”
The charges that Mr O’Dwyer pleaded guilty to related to the following conduct:
- That between 17 April 2015 and 6 June 2018, Mr O’Dwyer, by deception, dishonestly obtained for companies in the Ralan Group the ability to draw down on finance facilities totalling $251 million.
- The Ralan Group obtained the loans in respect of the development of residential projects in Sydney, Arncliffe, Turramurra and Gordon.
- As part of the loan agreements, the companies were required to satisfy lenders that pre-sale deposits paid by purchasers of residences in the developments were held in trust before draw down on the loans could occur.
- Mr O’Dwyer deceived the lenders into believing that the pre-sale deposits were held in a trust account, when in fact they had been loaned by the purchasers back to the respective development company for use as working capital.
- Approximately $132 million was drawn down upon the facilities, with approximately $47 million repaid by the time the companies in the Ralan Group went into administration in July 2019. A further amount is expected to be recouped by the lenders following their purchase and development of the Arncliffe property.
In July 2019, the companies in the Ralan Group entered voluntary administration and were placed in liquidation by 6 March 2020.
In November 2019, the liquidator of the companies, Said Jahani at Grant Thornton, estimated that the Ralan Group owed unsecured creditors $323 million.
From Maserati-driving high-flyer, Mr O’Dwyer was made bankrupt on in July 2021.
According to the bankruptcy notice sent to creditors that year, Mr O’Dwyer owed 1,749 creditors $2,100 shy of $3.5 million.
At least $230 million of this came from about 1,600 Ralan apartment buyers, who agreed to release their off-the-plan deposits to the developer as unsecured loans on the promise of returns as high as 20 per cent. All these loans were personally guaranteed by Mr O’Dwyer.
Sentencing remarks point to calculated fraud
In his sentencing remarks District Court Judge Troy Anderson said the financial advantage obtained was ‘enormous’ and that Mr O’Dwyer’s conduct was ongoing and deliberate, and a calculated fraud designed to benefit himself.
ASIC Deputy Chair Sarah Court said, “Today’s penalty is significant and emphasises the seriousness of fraudulent activities, together with ASIC’s commitment to investigate and prosecute such cases, and the importance of holding those responsible accountable for their actions.”
At the time of its collapse Ralan had a development pipeline of more than 3,000 residential units and debts of more than $560 million, including to secured lenders such as Westpac and Wingate.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions following a referral by ASIC.
Dishonestly obtaining any financial advantage by deception, fraud, is an offence contrary to section 192E of the Crimes Act 1900 (NSW).
The maximum penalty is 10 years imprisonment.