A HUNTER Valley real estate agent has been convicted of the fraudulent conversion of more than $900,000 in trust account funds after a NSW Fair Trading investigation landed her in court.
Natasha McElwaine, the former director of McElwaine Estate Agents at East Maitland, was fined $7,200 and sentenced to a 15-month intensive corrections order with 120 hours of community service in Parramatta Local Court on June 14.
McElwaine, 49, was convicted of 11 offences under the Property and Stock Agents Act. She was the licensee and sole director of the agency.
A NSW Fair Trading investigation found McElwaine had fraudulently converted $940,280 in trust money and did not keep $280,597 in a trust account.
The total sum of the funds comes to more than $1.2 million.
Acting NSW Fair Trading Commissioner Petrina Casey said the prosecution serves as a timely reminder to real estate agents that trust account fraud will not be tolerated.
"Consumers should inform themselves as much as possible by checking reviews of the business and verifying they have the appropriate licensing and registrations prior to making any decisions or paying large deposits," she said.
"NSW Fair Trading takes a proactive approach to protecting consumer rights and holding real estate and stock agents to account.
"Anyone who has experienced problems with getting what they paid for from traders or contractors is encouraged to contact NSW Fair Trading."
Court documents show that McElwaine was a signatory to five bank accounts with the Commonwealth Bank of Australia.
Those accounts included a sales trust account, two business accounts related to the agency, McElwaine's own smart access account and another business account for Cowgate Create Pty Ltd.
McElwaine was the sole director and beneficiary of Cowgate Create Pty Ltd.
NSW Fair Trading began its investigation on June 2, 2020.
During an inspection in September that same year, investigators told McElwaine that based on the records provided at that stage there was a deficiency in the trust account.
According to a statement of agreed facts, "the full extent of the offending behaviour had not been uncovered at that stage".
McElwaine Estate Agents entered into agreements with vendors to sell their properties.
Deposits from buyers were supposed to be held and retained in the sales trust account exclusively until they were paid to the vendors on settlement.
As part of that agreement, the agency would be paid a commission on settlement of the properties.
Between August 29, 2019 and September 18, 2020, McElwaine was knowingly concerned with unauthorised transfers that were being made out of the trust account in relation to nineteen sales deposits totalling $1,220,877.
The statement of agreed facts shows these unauthorised transfers would be made to other accounts. They were sometimes used for business expenses, loan repayments, credit card repayments and the settlement of other properties.
On a number of occasions, money held in the sales trust account dropped below the amount paid as a deposit.
Funds would then be transferred back into the sales trust account and later released to the vendors.
In court, McElwaine claimed that her motive was not to make profits but to keep debts under control.
She remortgaged her property to repay the trust account.
The funds were repaid to vendors less than a month later and no vendor was left out of pocket.
The sales trust account was closed on November 23, 2020.
The agency held a corporation licence which was cancelled on March 10, 2022 after McElwaine surrendered it.
McElwaine also held a Real Estate Agent and Stock and Station Agent Class 1 licence which she surrendered on December 17, 2020.
NSW Fair Trading decided to cancel her licence on February 11, 2022.
McElwaine no longer works at McElwaine Estate Agents, on her LinkedIn page she describes herself as a 'serial energetic coach'.
A quote from her website says, "You don't have to push and shove your way to more money. You become the person who makes more money, and you do this by elevating your inner".
The business and rent roll has since been sold.
The agency's current director David Podmore said he has had nothing to do with McElwaine since she became unlicensed and could not work in real estate.
"I bought the business from effectively an administrator through Fair Trading," he said.
"I have other interests in marketing land up that way and it was a good fit."
