Jail has no impact on fund
A LISMORE-BASED mortgage fund says local investors will not be impacted after a Gold Coast man – who was lent almost $4 million by the fund – was convicted of extortion last week.
In 2008 East Coast Mortgage Trust lent money to Mario Girardo, a high profile property developer who bought and sold ritzy beachfront properties.
But Girardo and his associate, Nicholas Michaelides, were last week found guilty of extortion in the Southport District Court.
They were sentenced to 10 1/2 years in jail.
According to national media reports, the court heard Girardo hired Michaelides as a “standover man” to collect $300,000 from businessman Ian Anderson.
Michaelides held a gun to Mr Anderson’s head and pulled the trigger, but the gun did not fire.
Despite East Coast Mortgage Fund lending millions of dollars to Girardo in 2008, the fund’s chief executive, Scott Collis, yesterday denied Girardo’s sentencing would have an impact on local investors.
“This 2008 loan no longer exists on East Coast Mortgage Trust books,” he said in a written statement to The Northern Star.
“The loan in question was dealt with several years ago with no loss to investors.
“The loan was approved based on the valuation of the property by a licensed valuer and was drawn under appropriate legal advice," Mr Collis said.
"For this loan the trust undertook the normal due diligence process ... with no irregularities evident at the time of approval.
“The loan went into default, as did other loans to this borrower made by at least one other major Australian lender.
“From time to time all financial institutions are the targets of fraudulent actions.
“Overall we have an exemplary record in this regard.”
MAKING THE “HARD DECISIONS”
THIS month East Coast Mortgage Trust decided to cut investors’ interest payments and freeze withdrawals for six months.
Investigations found the fund had eight loans in arrears, with four of those causing serious concern. The board will set aside $3 million to cover any potential losses.
An information night will be held tomorrow from 6pm at the Whitebrook Theatre, Southern Cross University.