Henry Kaye $18m fraud charges dropped

DISGRACED property spruiker Henry Kaye will not face criminal prosecution after charges against him concerning an alleged $18 million fraud were dropped yesterday.

The Commonwealth Director for Public Prosecutions yesterday pulled its charges against Mr Kaye -- one of the biggest property spruikers of the last property boom -- after a key witness altered evidence and this weakened the case. ( but the facr that thousands of other have been duped has NO effect ?? !! ??)

Mr Kaye had been charged with "obtaining financial advantage by deception" for allegedly duping St George Bank into providing a $17.7 million credit line to fund an apartment development. The failure of the case against Mr Kaye, who provided "wealth education" seminars to clients at an average price of $15,000 each, is a major blow for the Australian Securities and Investments Commission, which spent four years pursuing the charges.

ASIC said the DPP had dropped the case after a key witness gave evidence that was "significantly different" from the evidence provided earlier. "As a consequence, the DPP advised the court that it had reassessed the prospects of conviction of Mr Kaye in light of the new evidence and decided to discontinue proceeds," ASIC said.

The news was met with anger by many of Mr Kaye's former clients, who lost an estimated $40 million when his National Investment Institute was placed in liquidation in 2004.

Carol Perry, who sank $60,000 into Mr Kaye's seminars, said she was "amazed" ASIC had been unable to proceed with the case. "It's a joke ASIC couldn't do anything more," Ms Perry said. "ASIC should have also acted much earlier than they did to stop his activities."

Following two years of pressure from investors, ASIC in 2003 launched civil action against Mr Kaye, who was subsequently prevented from conducting wealth-creation seminars and required to repay investors.

But most of that money went unpaid because Mr Kaye's National Investment Institute was placed in receivership shortly afterwards owing more than 3000 creditors about $40 million.

Following separate action by the Australian Competition and Consumer Commission, Mr Kaye was in 2004 found to have breached the Trade Practices Act by falsely claiming he could turn "ordinary Australians" into "property millionaires".

In the case dropped yesterday, Mr Kaye had been accused of deceiving St George into offering a $17.7 million credit line to help in funding The Oasis apartments development in Melbourne's St Kilda. ASIC claimed Mr Kaye had used deposit bonds rather than actual deposits to verify to St George the number of apartments that had been sold off the plan. The deposit bonds were effectively worthless.

St George declined to comment on the case yesterday.

In a prepared statement, Mr Kaye's solicitor, Lewis Janover, said his client had always maintained his innocence and denied any wrongdoing.

Mr Kaye is understood to be no longer involved in property marketing and is believed to be currently investing in Melbourne nightclubs.

Consumer advocate Denise Brailey criticised the ASIC investigation of Mr Kaye.

"It's a disgrace that after all this time ASIC are effectively saying they can't find any evidence against Henry Kaye that ought to be placed before scrutiny of the judicial system," Ms Brailey said.

"All the thousands of people that got caught up in the Kaye system have suffered immense pain and are still feeling the effects to this day."

The Australian 5 Apr 2008

This is how the law lets 'the scapegoat' get away with crime.

Since he was the fall guy, realtors, bankers and insurance agents were in on the scam.

Australia still one of the better countries for fraud (That is if you're in the 'boys club').

A joke on the public.

Eugene Kukuy (aka Henry Kaye) is a Jewish Russian immigrant.