Former Kaye associate sues for repayment

PROPERTY spruiker Henry Kaye allegedly took regular overseas holidays and partied in exclusive nightclubs at the same time administrators were sifting through the ruins of his collapsed investment empire, which owed more than $40 million to about 3500 investors.

The get-rich-quick salesman received $589,519 in personal loans between November 2004 and April 2007, according to legal documents filed by his former business associate Gennady ''Gary'' Braude.

The erstwhile friends are now locked in a bitter Supreme Court battle after Mr Kaye (pictured) refused to repay the money, which he claims was payment for consulting on property transactions and other business deals. Mr Braude, who filed a two-page itemised list of the loans with the court, apparently funded a lavish lifestyle for Mr Kaye and some of his associates.

It included a total of $57,120 for two trips to Thailand, three Noosa holidays and a weekend at Portsea. There was also a $1500 loan for expenses at Sydney's Hugo's Lounge in Kings Cross. Mr Kaye's girlfriend Olia received $6000 in separate payments, and her former husband received a cheque for $1500.

The claim also alleges Mr Kaye was regularly advanced money to pay credit card, phone and Foxtel bills, as well as fees for business conducted with a liquidator and the Australian Securities and Investments Commission. Advances ranged from as little as $21 to as much as $70,000.

The largesse was extended to American life coach and master motivator Anthony Robbins, with Mr Kaye paying $1300 for accommodation at Sydney's Sheraton on the Park in 2006. Mr Robbins was in Sydney for a four-day seminar that included his Life Mastery and Wealth Mastery courses.

Mr Kaye has labelled the lawsuit a ''shake-down'' in a lengthy written statement provided to The Sunday Age.

''The claim by Braude against me was brought to try to embarrass me so that he can coerce/pressure me and third parties not to sue him for millions of dollars owed by Braude.''

He said that many of the loans were ''concoctions'' and ''fabrications'' and represented Mr Braude's own personal and business expenses.

''I have always lived and continue to live a modest life and continue to favour hard work over a flamboyant lifestyle and have been working hard since the collapse of NII [National Investment Institute] to establish a new life and business opportunities,'' Mr Kaye wrote.

According to Mr Braude's statement of claim, Mr Kaye now owes $1.6 million after verbally agreeing to pay a compounding interest rate of 20 per cent interest on the loans, which were supposed to be repaid within three years.

Mr Kaye's flagship company NII was placed into administration in November 2003, leaving stranded thousands of investors, who believed claims that they could be turned into property millionaires within six months.

Mr Kaye was charged in 2006 with fraud over an $18 million line of credit from St George Bank. The charges were dropped in April 2008 after a key witness altered evidence.

Last year, Mr Kaye was banned from managing any company for five years, other than entities that manage his private superannuation holdings.