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22 September 2003

Those Shyster Real Estate Solicitors

How they get away with their white-collar crimes.

UPDATE: March 23, 2004. The Queensland Minister for Fair Trading, Margaret Keech, yesterday announced that this lawyer had been successfully prosecuted as a consequence of his involvement with real estate marketeers. A most welcome result.

Richard Ebbott is a solicitor. He is also a shyster.

And, as many of Ebbott’s clients have discovered, that’s a terrible combination.

For years, countless mums and dads have trusted Ebbott to act in their best interests – as solicitors are supposed to do. But, unknown to some of his trusting clients, Ebbott was in the pocket of some of the worst real estate rogues in Australia – a key player in a systematic fleecing of naïve investors, in what is often referred to as the “food chain of deceit”.

The chain begins when hopeful investors are lured to a wealth seminar. From there they are transported to the target zone where they inspect properties which are touted as ideal investments. They are unaware that the properties have been loaded in price – usually by at least $50,000, sometimes as much as $100,000.

The unsuspecting investors are then referred to solicitors, such as Richard Ebbott. What they don’t know, of course, is that the solicitors are part of the rip off. They don’t know that the company selling them this ideal investment is earning a commission which is rarely less than $20,000 – an amount which, in addition to the developer’s massive mark-up, has been loaded on to the price of the property. In some sales, in which Ebbott was involved, the commission comprised a massive one third of the price of the properties.

Since at least the mid-nineties, Ebbott has welcomed mums and dads into his Brisbane office, often at nights or on the weekend. He has sat them down, smiled at them, reassured them – and then financially garrotted them.

Ebbott gets away with his treachery because, in most cases, his clients don’t realise, for several years, that they have been ripped off. They return home – usually interstate – and it is not until they decide to sell that they discover their losses. Many lose their life savings. In some cases, entire retirement plans are destroyed. Ebbott’s clients are devastated – financially and emotionally.

They never knew that in many cases Ebbott was also the solicitor for the sellers of the properties – the rogue developers. They never knew that the reason the investment company recommended him was because he protected the interests of the crooks. They never knew that the smiling bespectacled Richard Ebbott was also a crook.

It is hard to know just how much money has been lost by the clients of Ebbott. But if he has averaged just one client a week over ten years, then, conservatively, his clients have lost $20 million dollars. Most would be battlers.

Earlier this month, Richard Ebbott, after being prosecuted by his fellow lawyers at the Queensland Law Society, was found “guilty of professional misconduct” by the Solicitors Complaints Tribunal. He was fined $25,000 – little more than the commission on just one of those loaded property sales.

Despite his conduct, Ebbott is still a solicitor today. This is because, in the legal world, there is a big difference between legal and ethical. According to the rules of law, Ebbott’s sin was not that his clients were fleeced. No, it was that he failed to tell them they were being fleeced. If a solicitor acts for both the seller and the buyer, then the solicitor is supposed to tell both parties. It is called “disclosure”. It basically means that it is okay to rip people off as long as you tell them you are doing it. To make it “legal”, the clients have to give their “informed consent”.

Ethically, Richard Ebbott should not be a solicitor. He fits the profile of a typical white-collar criminal. With a pen and a contract, he has done far more financial damage than most real criminals ever do with their knives and guns.

There are plenty of Richard Ebbotts in Australia’s real estate world.

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