Three men charged over dishonest and failed retiree housing scheme

Nov 06, 2023
Three men have been charged for a dishonest property investment scheme targeted at retirees. Source: Getty Images

Three men have fronted court over the collapse of the Sterling Group and its failed retiree housing scheme under the Sterling Income Trust (SIT),  which left more than a hundred retirees facing homelessness and eviction.

The Sterling Group, was a group of 50 companies and trusts that dealt with property related assets. One of the companies in the group, Sterling Corporate Services (SCS) was tasked with administering the Sterling New Life Lease (SNLL) scheme.

The SNLL scheme involved retirees investing capital, often their life savings, into the SIT. The income from the SIT would then be used by the retirees to pay rent on long-term leases for residential properties.

Despite being sold as a trust however, the SIT was more accurately an investment product that gave money to the Sterling Group for their own use.  The SNLL scheme was marketed to retirees as an alternative to downsizing, which would free-up cash for a more comfortable lifestyle and secure them a long-term residence.

The income received from the trust was supposed to cover rent for the rest of the retirees’ lives. However, in 2019, the Sterling Group collapsed due to significant mismanagement and all of the money was lost to investors as the Sterling Group had used it to purchase its own assets (which were later liquidated) and  fund its ongoing losses.

Three of the men involved in administering the scheme appeared before Perth Magistrates Court last Friday.

Raymond Jones, founder of the Sterling Group, and Simon Bell were charged with 11 counts of aiding and abetting Sterling Corporate Services to engage in dishonest conduct in relation to a financial product or service, in breach of section 1041G of the Corporations Act.

Ryan Jones, the son of Raymond Jones, has also been charged with 10 charges of aiding and abetting Sterling Corporate Services to engage in dishonest conduct in relation to a financial product or service.

None of the men entered a plea and have been released on bail. They are due to return to court in February.

As a result of the scheme, many retirees are now facing homelessness and eviction. Because the SIT did not generate any real returns, many of the investors have had to move and pay market rent on another property, rely on social housing, live with relatives, or, in at least one case, ‘couch surf’ at the age of 80.

ASIC have been investigating the Sterling Group since 2018, but they were slammed by the Senate Economics References Committee during their inquiry for not acting far sooner.

The case will now be prosecuted by the Commonwealth Director of Public Prosecutions.

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