Guilty of Fraud
Spruiker faces lengthy jail sentence.
UPDATE – On Friday, December 17, 2010, Bangaru was sentenced to eight and a half years in jail. He will be eligible for parole in six years and four months. When he is released he should be deported back to South Africa.
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by Neil Jenman.
One of Australia’s most notorious property spruikers has finally been convicted of fraud.
Almost ten years after he began his reign of financial terror, Kovelan Bangaru, 43, was this week found guilty in the Sydney District Court on 13 charges of fraud under the NSW Crimes Act. He was remanded in custody and is due to be sentenced on November 12, 2010. He faces a maximum of five years imprisonment on each charge.
Bangaru migrated to Australia from South Africa in the 1990s and set up business as a property spruiker. His early activities involved selling over-priced house-and-land package deals. Later, he set up a mortgage broking company called Streetwise.
He targeted mum-and-dad investors by setting up stalls in shopping centres where shoppers were told they had the chance to pay off their home loans more quickly. Instead, once they got involved with Bangaru, many of them lost their homes.
Bangaru raked in many millions of dollars by way of ‘joint-venture’ deals. He convinced investors to place a mortgage on their home (commonly around $500,000) and then invest the proceeds with him and his company. Rather than using the money as he promised to use it, Bangaru basically just stole people’s money and used it to fund his lavish lifestyle. He lived in a magnificent penthouse overlooking Sydney Harbour and he also had a fleet of luxury vehicles including a million dollar Mercedes Maybach.
Like all Ponzi-based spruikers (where they use the money from new investors to repay old investors), Bangaru eventually ran out of investors who were prepared to trust him. In August 2005, after Channel Nine’s 60 Minutes aired a story about him, Bangaru fled to the United States.
He was arrested in California in April 2007 and eventually brought back to Australia in February 2008. Initially, he agreed to plead guilty to several charges of fraud. But Bangaru didn’t like being in jail so he changed his plea to not guilty and was released on bail. He was free for more than two years while his case has dragged on. Now, at last, he is back behind bars.
No matter how long a sentence he is given, Bangaru has vowed to be back. In July 2005, he told me, “If I go down, then everyone who’s invested in me will lose. They’ll lose their money and they’ll lose their houses. They will never recover. But I will. One day, I will have it all back again. You just wait and see.”
Let’s hope it’s a long time before Bangaru can entice any more investors.
Meanwhile, the Australian nation continues to be plagued by property spruikers who are still ripping millions of dollars from thousands of mum-and-dad investors.
