Property spruiker allegedly told students to use Family Court to pinpoint targets

An influential Australian property spruiker who has made millions by selling the dream of wealth through investment has been referred to federal police for allegedly directing her students to buy property from people identified in Family Court proceedings as divorcing or financially struggling.

The Family Court brought Sydney businesswoman and lawyer, Dominique Grubisa, to the attention of police earlier this year to determine whether it was legal to match Family Court lists with data from a property research firm to provide "leads" for her paying students. The Family Court legislation prohibits the publication of any part of a proceeding.

Dominique Grubisa leaving her home in Sydney’s northern suburbs.Credit:Nick Moir

Both the Australian Federal Police and the Family Court have confirmed the referral but would not comment further.

Correspondence also shows the NSW Law Society is investigating complaints made by former students and a Brisbane lawyer about alleged ethical breaches by Ms Grubisa. Among these is her use of her parents in property and financial deals even though both were struck off the NSW solicitor’s roll in 2013 for fraud. The Law Society said it could not comment on individual solicitors.

Based in Sydney but operating nationally, Ms Grubisa describes herself as Australia’s leading “wealth educator”. She owns and operates the DG Institute and a suite of related companies, some of which provide legal and financial advice.

Over the past decade, more than 10,000 people have paid between $5000 and $60,000 to take part in Ms Grubisa’s programs which carry titles including Real Estate Rescue, Elite Mentoring, Property Uplift and Master Wealth.

Ms Grubisa is one of several charismatic Australian property spruikers who have emerged since the global financial crisis in 2008 and who have built large and passionate followings through seminars and social media.

Her sales pitch is simple and seductive: she promises students the “power to do a multimillion-dollar deal with no money down and a deck of cards stacked in your favour”.

The Sunday Age and Sun-Herald have obtained thousands of pages of documents, including financial arrangements and private correspondence, which show that a key to Ms Grubisa’s business model, and that of other property spruikers, is identifying people with distressed assets and convincing them to sell at a discount. Ms Grubisa promises participants in one of her programs that they can acquire houses at a 40 per cent discount to the market price.

Former Real Estate Rescue student Andrew Drysdale said he and others were instructed to send unsolicited letters to people in financial distress, describing the approach as a “numbers game”.

“In other words, send 1000 letters out, receive a reply from 20, get in front of five and develop one deal,” he said.

In response to questions, Ms Grubisa said her course taught students how to obtain distressed properties “for the mutual benefit” of buyer and seller. A private arrangement such as this often left a seller in a better position than a foreclosure or takeover by the bank, she said.

However, Ms Grubisa’s coaching material warns that “emotionally distressed” people can “get a case of sour grapes and can play the ‘blame game'.”

“Stay clear of discussing how much this is affecting their family, recent sicknesses, healthcare bills and the like. Your job is to move forward with your plan, not engage in family counselling,” she advises her students.

Former chief executive of Melbourne’s Consumer Action Law Centre, Carolyn Bond, has closely studied Ms Grubisa’s activities in recent years and said the focus on finding distressed properties raised ethical questions.

“I don’t think buying a house cheaply makes you a ‘vulture’, but my view is that taking advantage of an owner’s vulnerability, ignorance and/or trust is preying on them, and some of Grubisa’s teaching encourages that,” Ms Bond wrote recently on her pro-consumer blog, The Naysayer.

'They nearly destroyed me.'

Elderly Adelaide woman, Brenda*, was struggling to meet her mortgage repayments in 2016 when she received a letter from a man she did not know who promised to help her with her problems. Brenda, who does not want to be identified, said she later learnt the man had found her name on a court list in relation to her mortgage default.

The man, whom The Sunday Age and Sun-Herald have chosen not to name for legal reasons, has boasted publicly that he was a graduate of Ms Grubisa’s Elite Mentoring Program.

Brenda agreed to meet the man and he told her that he could help with her outstanding bank loan and in subdividing some blocks of land. But in return, he would need her to sign an authority to act to deal with the bank and grant him a power of attorney over her property.

Getting a power of attorney for someone’s property is one of Ms Grubisa’s key teaching points. She assures students that in most states a power of attorney over a property is irrevocable.

Brenda said she came under heavy pressure from the man and his associates to proceed with the offer. “There were so many text messages,” she said. “They were telling me things like I’d be out on the street without their help.”

She ended up agreeing and in February 2017 she received a loan agreement from a company owned by a Queensland property developer whose company appears on a number of different deals involving Ms Grubisa’s students. The letter outlining the loan agreement was on Ms Grubisa’s letterhead as a solicitor and was signed off by a man called “Chris Jackson”.

Brenda said she began to get suspicious when a staffer at her bank branch warned her that she would still owe money to the bank even after her bail-out. At one point, Brenda said she was paying interest of 24 per cent to her supposed white knights.

“They nearly destroyed me. I almost lost my house,” she said.

With the pro-bono help of Brisbane lawyer, Chris Baker, Brenda was able to extricate herself from the deal and had the power of attorney over her property removed. She estimates the experience caused her to lose $80,000.

The Chris Jackson who signed the loan letter sent on Ms Grubisa’s letterhead is Ms Grubisa’s father, whose real name is Christopher Ronald Fitzsimons. He was struck off the solicitor’s roll in 2013 after being found guilty of fraud and misappropriating $600,000 of his clients' money from his trust account. Transcripts from the NSW Administrative Decisions Tribunal show that, of that money, Mr Fitzsimons deposited $173,000 into the account of Ms Grubisa and her husband.

Ms Grubisa’s mother, Maria Fitzsimons, was also struck off the solicitor’s roll at the same time as her husband. Mrs Fitzsimons also appears in correspondence regarding legal aspects of deals involving Ms Grubisa’s clients.

Ms Grubisa said neither of her parents had been engaged to provide any legal advice for her, the DG Institute or students. Both had been employed briefly to help with administrative matters, she said. "As for the use of the pseudonym Chris Jackson by Mr Fitzsimons, this is not a matter upon which
either DG Institute or I can respond to and is a matter for Mr Fitzsimons," she said in a statement.

Bold claims and hardball tactics

Ms Grubisa’s course material includes some big claims. One is that banks “give no change” and will keep all equity in a distressed property even after the outstanding loan amount is recovered. She told The Sunday Age and Sun-Herald that she had not seen any owner receive proceeds from a mortgagee sale of their property regardless of how much equity they had in the property, because banks also sought to recover associated costs.

Ms Grubisa’s course material also includes reminders of her expertise. “As you may know, I’m an ASIC credit licence holder and a lawyer specialising in debt and commercial law,” she declared on a slide shown at a recent webinar event.

The Real Estate Rescue manual also encourages her students to explore the possibility of offering financial incentives to distressed sellers to lobby their bank to agree to a “short sale” – when the bank accepts less than the outstanding loan to settle the debt.

And Ms Grubisa advises students to use the Australian Financial Complaints Authority’s complaints process as a “tool” to “buy time” to get in between a lender and the homeowner and try to cut a deal.

Good help is hard to find

Andrew Drysdale admits that in 2016 he was keen to strike a deal after completing the Real Estate Rescue Course. He identified a property in the Brisbane suburb of Windsor and put into practice what he had been taught in the belief that a mutually beneficial outcome with the owner could be arranged.

As guided by Ms Grubisa's course, Mr Drysdale registered a power of attorney over the single mother’s property in the belief it would protect his interests. But both he and Ms Grubisa were shocked when Queensland’s land titles office revoked the power of attorney after the woman living in the house decided not to proceed with the sale.

Mr Drysdale said this was a blow to Ms Grubisa because it clashed with her message to students that a power of attorney over a property was irrevocable.

He and Ms Grubisa have since had a falling out that has spilled into the public arena, with each now blaming the other for the deal's collapse. Mr Drysdale has set up a Facebook group to challenge Ms Grubisa's teachings.

But before their relationship became toxic, the pair exchanged a series of emails, which reveal Ms Grubisa was ready to play hardball against the home owner.

“Whatever notes are in the [Queensland government’s] system about this woman, it may be that they are seeing her as you first did – a decent single mum down on her luck. We may want to have evidence up our sleeve to what she has done and that she is a meth addict,” she wrote in an email to Mr Drysdale.

As with Brenda in Adelaide, a “Chris Jackson” became involved in Mr Drysdale's arrangements, as did Maria Fitzsimons, Ms Grubisa’s mother. Ms Grubisa told Mr Drysdale in one email that: “It’s very hard for me to get good lawyers who see the world our way. They want to be thorough and take their time and cover every detail.”

Not a priority for regulator

Brisbane lawyer Chris Baker estimates he has spent more than 2000 hours helping people caught up in deals involving Ms Grubisa and her students. He believes there are thousands of others who have paid for courses and products that do not deliver what they claim.

Mr Baker has sent detailed complaints with substantial evidence to the Australian Competition and Consumer Commission and other national and state regulators over the past two years.

Other former clients such as Mr Drysdale have also lodged complaints. But so far, the ACCC has declined to investigate, telling Mr Baker in writing that the matters did not fall within a “current priority area” and that it was “not always the best agency to deal with particular consumer issues”.

The response surprised Mr Baker given the ACCC had extensively investigated another high-profile property spruiker, Rick Otton, who was ultimately found guilty in the Federal Court of misleading conduct and fined $18 million. The Sunday Age and Sun Herald do not suggest Ms Grubisa has engaged in conduct that led to Mr Cotton’s conviction.

Mr Baker’s local federal senator, Labor frontbencher Murray Watt, this month wrote to ACCC chairman Rod Sims to ask the regulator to reconsider its decision.

Ms Grubisa said she was aware of a small number of people who had a “vendetta” against her and had made complaints to various regulatory bodies that had been “dismissed or discarded”.

See Ms Grubisa's full statement in response to questions here.

More information? Contact Richard Baker securely on [email protected]

Start your day informed

Our Morning Edition newsletter is a curated guide to the most important and interesting stories, analysis and insights. Sign up to The Sydney Morning Herald’s newsletter here, The Age’s here, Brisbane Times’ here, and WAtoday’s here.

Most Viewed in National

Source: Read Full Article