THE LAUREL SPRINGS INVESTIGATION
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THE LAUREL SPRINGS RETIREMENT VILLAGE
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FINANCIAL INVESTIGATION
DETAILS OF FINDINGS
Details of Findings
9. Knowingly Included false information in Financial Statements 2019-2020
18. Defrauded residents who bought new unit - structure unfit for purpose, and unconscionable exit terms
19. Deceived residents - renaming of Village to Resort

9. Knowingly Included false information in Financial Statements 2019-2020

The scheme operators knowingly included false information, that all 92 of the units in Laurel Springs were completed, in the "Notes to Financial Statements" for the 2019-2020 Financial Statements. This falsely implies that all 15 of the new leasehold units were completed, whereas only four new units are completed and only two occupied. This is a contravention of s113(1)(e) of the Retirement Villages Act. Furthermore, the scheme operators encouraged residents to vote for a resolution to accept the Financial Statements at the 2020 AGM. In my opinion, this is an offence of fraud under the Queensland Criminal Code.

9.1 The false information

9.1.1 In "NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 June 2020", the scheme operators have three time falsely stated that all 92 of the units have been completed.

9.1.2 Under "Statement of Significant Accounting Policies, (a) General Information", is the following false statement that "It now comprises 92 ILUs (71 Freehold, 10 leashold & 11 vacant)" :

Evidence Document D6.9 - 01

9.1.3 Under "Statement of Significant Accounting Policies, NOTE 2: Assets and Liabilities", is the following false assertion that the Assets Include 92 completed units:

Evidence Document D6.9 - 01

9.1.4 Under "Liabilities" is the following false assertion that "Note the 76 ILU values are based on the independent valuation by CBRE 5 April 2018 and updated by the Operator (Lance Taylor) based on 92 completed units......":

Evidence Document D6.9 - 01

9.1.5 The false Financial Statement was signed by both scheme operators; Brian McGuiness and Lance Taylor:

Evidence Document D6.9 - 01

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9.2 scheme operators applied for approval to construct village extension in four stages

9.2.1 On 3 October 2019 the scheme operators, in their role as developers of the extension to the Laurel Springs Retirement Village, applied for approval to construct the village extension in four stages:

Evidence Document D6.9 - 02

9.2.2 Therefore, more than 11 months before signing the Financial Statements for 2019-2020, in which they assert that 92 units were completed, the scheme operators knew that this was false because the 15 new units would not be completed.

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9.3 The Quantity Surveyor allowed for 82 units to be completed by 1 July 2020

9.3.1 In the Maintenance Reserve Fund forecast dated 4 June 2020, the Quantity Surveyor has allowed for 82 units to be completed by 1 July 2020:

Evidence Document D6.9 - 01

9.3.2 Therefore, three months before signing the Financial Statements for 2019-2020, in which they assert that 92 units were completed, the scheme operators knew that this was false because the 15 new units would not be completed.

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9.4 Deception of residents by scheme operators

9.4.1 At the 2020 AGM, the scheme operators encouraged the residents to vote to accept the false Financial Statements for 2019-2020:

Evidence Document D6.9 - 01

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9.5 Contraventions of Retirement Villages Act

9.5.1 The scheme operators knowingly included false information, that 92 units were completed, and therefore have contravened s113(1)(e) of the Retirement Villages Act:

Evidence Document D6.9 - 01

9.5.2 The scheme operators knowingly engaged in misleading and deceptive conduct when encouraging residents to vote to accept the false Financial Statements for 2019-2020: and therefore have contravened 86 of the Retirement Villages Act:

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