And the price of a promise.
by Neil Jenman
INTRODUCTION: Over the past two weeks, I have often been asked the same question: “Why haven’t you written anything about the judgement in the case of the families who invested with Bangaru?” It’s hard to know how to tell this story. It has been a dreadful ride. But, anyway, here it is. Perhaps it will give us all hope that battlers can win if they battle hard enough. What do you think? Neil Jenman.
On a cold August night, back in 2005, I made a big mistake. I made a promise to a journalist by the name of Paul Barry that a woman by the name of Maria Di Benedetto would not lose her home.
If I’d have known the price of that promise I would not have made it. And I don’t just mean the financial price, I also mean the emotional price.
For the past four years, I have lived with the consequences of that promise. So has my family and many of my friends. And, of course, so has Maria Di Benedetto. She has suffered terribly.
In 2004, Maria got involved with Kovelan Bangaru, a flamboyant Sydney property spruiker. Maria and her husband were one of many mum-and-dad investors who dealt with Bangaru (pronounced the same as kangaroo only with a B).
Bangaru’s schemes were simple. He told investors that he was a successful property developer and that if they invested their money with him – in what’s known as a ‘Joint Venture Agreement’ – they would make a lot of money. Safely and securely. He personally “guaranteed” his schemes.
Bangaru also claimed to have the endorsement of the Australian Cricket team, many of whom, he said, had invested successfully with him. The faces of cricketers Brett Lee and Michael Slater were used to promote his company – Streetwise Pty Ltd.
Bangaru found mum-and-dad investors at shopping malls. He used a bait common to spruikers – “Learn the secrets to pay off your home loan faster.” The “secret” was that if you invested with Bangaru you’d supposedly earn extra money which you could then use to reduce or eliminate your mortgage.
But, instead of reducing peoples’ mortgages, Bangaru increased their mortgages. He talked Maria and her husband into placing a half million dollar loan on their family home. This money went straight to Bangaru, ostensibly to be invested in a property development project.
Many of Bangaru’s investors could not afford to borrow half a million dollars. Although they had assets – being their family homes – they didn’t have the income to service the loans. No problem, according to Bangaru. He promised investors that he would make the loan payments. All they had to do was put their homes up as security for the loans. He’d take care of everything else (especially the paperwork required by the lenders. Wink-wink).
Bangaru used this same strategy with several mum-and-dad investors. He raked in multiple amounts of half million dollars, all borrowed against the homes of families. In all, he acquired (and I really want to use a stronger word than ‘acquired’) around $50 million.
Kovelan Bangaru was a showman. He lived a lavish lifestyle which he claimed was the result of his successful property deals. In reality, however, he funded his lifestyle from the money he acquired from people like Maria. He bought two enormous penthouses for himself in a premier building in Sydney’s Rocks. He had a fleet of luxury cars – a Porsche, a BMW, a Bentley and his ultimate dream machine, a million dollar Mercedes Maybach.
For a year or two, he was the talk of Sydney. The immigrant success story. Still in his 30s and featured on the BRW Young Rich List.
In 2005, however, Bangaru’s built-on-sand empire was crumbling. The cricketers had abandoned him. Brett Lee was one of many people suing him. Bangaru was desperate for cash. He was being pursued by the media.
One of the journalists who wanted to interview Bangaru was Paul Barry who was, at the time, a reporter for the television program 60 Minutes. But the loud-mouthed spruiker was no longer talking and certainly not to the media. He was in hiding.
All stories, especially television stories, need an interview with the villain. I devised a method to lure Bangaru out of hiding. It worked beautifully. Paul Barry got his interview.
Even though he now had a good story, Barry was upset that Maria Di Benedetto – whom he had interviewed – was going to lose her home. She could not afford the loan repayments and Bangaru’s companies had gone into liquidation.
It was then that I made that fateful promise. I promised that Maria (and two other families who had been included in the 60 Minutes story) would not lose their homes.
On what basis did I make such a promise? Or, as my wife might have put it, “What were you thinking?”
Well, when it comes to good guys and bad guys, I have long held the belief that right is might. Yes, I know, it’s a naïve belief. Life can be cruel and horribly unfair. Sometimes I should accept it. This was one of those times. I should have kept my mouth shut.
But, no, the next day I took Maria – and two other families – to see a solicitor. He felt there was a slight chance that a court would cancel the loans and allow these families to keep their homes. The legal fees, however, would be expensive, perhaps half a million dollars.
I said I would find the money – somehow. After all, I had made a promise. And as my mother drilled into me as a child, “Always keep your promises.”
The first place that I turned for money was the agents I knew – those who carry the Jenman APPROVED accreditation. To their great credit – and to my immense relief – many of them agreed to help. I quickly raised around $200,000.
But, as time went on, this case became a marathon. The legal bills just kept coming. Our Protection Fund, that we had set up to help all consumers, was, at one stage, almost completely drained of cash. I held a series of real estate lectures and raised another $350,000. I then asked agents to pay monthly. Some refused. But, thankfully, many agreed. Even so, as soon as money came in from the agents, it went straight out to the lawyers. At one stage, it looked like our own home could have been in danger. My wife was almost sick with worry.
By the time the case got to court, the total legal costs were $1,001,048.00. That’s right, just over a million dollars. And still the lawyers wanted more. But I had no more. The lawyers then agreed to work for a “success fee”. The case proceeded.
The stress was unimaginable. And that was just for me. Imagine the stress on Maria and the other two families. For four years, they lived with the threat of being evicted from their homes at any moment.
On September 4, 2009, the Supreme Court ordered that the loans be cancelled. The three families could keep their homes. We had won the case. The lawyers tell me that we “won with costs” which means we may get back about half what we paid in legal fees.
The case is important, also, because many other families – maybe those involved in the Storm Financial catastrophe – may benefit from this decision. Apparently, it’s a landmark case.
But, if I had honestly known the financial and emotional stress that this case was going to place on me, my wife and many of my friends (those agents who supported me) I would never have made that promise on that cold night in August 2005.
Of course, I am delighted that Maria Di Benedetto and her family can keep their home. Paul Barry was right when he described her as a “particularly lovely woman”.
But, last week, I confessed to Maria. If I had known what was involved, I would not have made such a promise. As my wife often tells me, I can’t save everyone. But, gee, it is nice to save some people.
The greatest credit for saving the homes of these three families belongs to the agents who gave (and still give) financial support to our Consumer Protection Fund. I don’t advertise these agents as much as I should.
So here comes a well deserved plug.
If you would like to help me to help consumers, then please, the next time you want to sell or buy a property, seek out one of the agents who carry the Jenman APPROVED accreditation. They are true heroes. I really mean that.
Without their money, Maria would have lost her home.
And I couldn’t have kept my promise.