Battlers the target in real estate racket
A property racket disguised as financial advice has cost hundreds of investors millions. In a Sun-Herald investigation Linton Besser and Stuart Washington have unearthed evidence of cold-blooded tactics employed by former bankrupt Faye Kotsis's Heritage Financial Solutions to sell overpriced, second-rate properties.
A property racket disguised as financial advice has cost hundreds of investors millions. In a Sun-Herald investigation Linton Besser and Stuart Washington have unearthed evidence of cold-blooded tactics employed by former bankrupt Faye Kotsis's Heritage Financial Solutions to sell overpriced, second-rate properties. Last weekend, Faye Kotsis threw open the gates of her two-hectare estate in Arcadia to the public. As a proud member of the Galston District Garden Club, her grounds were designated as stop No.5 on a tour of the north-west in spring bloom.Her hanging flower baskets swung gently, the pool sparkled and her rose garden was pruned to perfection. The Open Gardens 2012 brochure said tourists could meander past "a pond with bridges", alpacas grazing quietly and even "figs and blueberries in the rear section".The multimillion-dollar pile is home for the Greece-born Kotsis and her new squeeze, David Bartlett. But on her regular trips to Queensland, she sometimes relaxes at one of her apartments overlooking the wild swells of Surfers Paradise. One thing is certain: Kotsis knows property.She may have only a half-a-dozen to her name but, since the late 1980s, Kotsis has had hundreds pass through her hands. A quarter of a century after buying her first house, Kotsis, 57, has fine-tuned a property-marketing racket that runs like a well-oiled machine. She targets financially illiterate investors and loads them up with debt they cannot service for over-priced properties in the backwaters of Queensland.Targets are identified by a Philippines call centre and consultants are coached to employ aggressive sales tactics. And by using a labyrinth of $1 companies (each playing apparently independent roles, including financial adviser, property vendor and even financier), her scheme is turning over millions of dollars a year.In its wake are scores of unhappy people. Some have been left bankrupt, with banks foreclosing not just on their investment property but also their homes, and others have scrambled to pay off units and houses worth a fraction of what they paid. Many are left exposed by improper superannuation funds she has set up and by mezzanine loans they little understand.Last week Kotsis's lawyer sent a long letter to The Sun-Herald. In it he says he is "at a loss to understand the basis of the characterisation of our clients as carrying on a 'marketeering racket"'. He says a string of allegations about her past, which the letter does not address, "had no foundation at all".Certainly, her initial forays into business went along without too much of a hitch. In the 1980s Faye Dimitropoulos (she had taken the surname of her husband, Leonidas Dimitropoulos, a bricklayer) opened a milk bar around the corner from where they lived in Crows Nest. It must have made a little bit of money because, in 1988, when Faye was 32, they bought their first investment property - a $50,000 apartment on Norfolk Street, Liverpool. They bought another a year later, also in Liverpool, then in 1991 they bought a third, a big two-storey brick house at St Georges Basin.Kotsis was by now enchanted with the property game, and, on July 25, 1991, she dived into the big time, setting up a property company with none other than Chris Bilborough.Bilborough, a member of the white-shoe brigade who made a killing on the Gold Coast, would soon become infamous. In 2003 the Federal Court ruled Bilborough had misled interstate investors by promising ludicrously impressive capital gains on his properties. He and his partner, Dudley Quinlivan, known in Queensland as "King Con", were found to have breached the Trade Practices Act (though Quinlivan had his findings overturned).Kotsis later told her staff she parted ways with Bilborough because she deemed him lazy. In fact, when their shared company slid into administration owing several thousand dollars in unpaid tax, she still owed it money. Corporate records show she has not paid back $1496 for "airfares not handed in re Lazaway Travel".This might help to explain why, in February the next year, a team of lawyers from the Gold Coast had Kotsis, as Faye Dimitropoulos, bankrupted. For the following three years she was not allowed to act as a company director, but she did so anyway, joining three companies in that time.While she was using her married name for these positions, she used her maiden name - Kotsis - on the title of a leafy bungalow at Wahroonga that she bought three months after she was declared bankrupt. It was not the first time she had used different names on official company and property records. Sometimes she dropped the 'e' from Faye, or even used her original Greek name, Efitiha.A year later, Kotsis went into business briefly with Margaret Jurca, a Queensland property agent who was looking to open an office in Sydney. They signed a lease for a shopfront in Chatswood but Jurca says things turned sour. "I got rid of her very quickly," she says, claiming Kotsis had pilfered her client list. "I said, 'I don't think you're honest' ... and I picked up her personal things and showed her the door."While this partnership foundered, at least one other blossomed. In the mid-1990s, Kotsis went into business and fell in love with Alan Myall, a Gold Coast property spruiker originally from Britain. Over the following years, Kotsis divorced her first husband and married Myall, and the pair worked together to establish the property racket that has made her a wealthy woman.It works like this: companies associated with Kotsis first secure the rights to properties by taking an option to buy them at a later date. The Manila call centre showers the mortgage belts of Sydney, Brisbane and Canberra with phone calls and text messages. Recipients are promised a free $50 Coles or Woolies voucher if they agree to an appointment. If they do, a consultant will knock at their door a week later, armed with glossy brochures and a handful of contracts.Many of the documents are blank, and do not disclose the myriad conflicts of interest in the deal. The clients The Sun-Herald has met say they were never told the property to which they were shepherded was effectively owned by a company linked to Kotsis and her team, nor that the finance company to which they are referred is actually owned by her.The consultants are told not to leave until they get a signature, and they are to send her a text message when they leave, no matter what the hour, so she knows precisely how long they spent trying to get them over the line. But it's not all stick. She offers enormous bonuses. At a formal dinner in June, one woman received a $50,000 bonus for the most sales that month, and another competition was announced at the same time. The prize was a Ferrari.One company insider says: "I often wondered how people who make so much money from battlers could really sleep at night."Myall and Kotsis parted ways sometime in 2010. The divorce seems to have been somewhat acrimonious because lawyers were involved in helping the pair divvy up their array of property holdings. Myall got the Chatswood shop and the Lane Cove apartment. Kotsis got not just a property at Moorebank and the Heritage Financial Solutions head office in Thornleigh, but also her beloved acreage in the Arcadia hills.Even in this sanctuary on the edge of the city, however, Kotsis has had trouble. A dispute in 2010 went to court over a dying tree leaning over the backyard of her neighbour, a Mr V. Schutz. Kotsis was told to chop the thing down.
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