Michael David Steele appeared at Southport Magistrates Court and was charged with seven counts of fraud in relation to promises he made to investors between May 2016 and February 2017.
Following an Australian Securities and Investments Commission (ASIC) investigation, it is alleged that between those dates, Mr Steele misled 14 investors into withdrawing funds from their employer superannuation funds and savings accounts to invest in a property development at Biggera Waters, Queensland.
ASIC has claimed that Mr Steele advised the investors that they should send their funds to EA Invest, the corporate entity that was supposedly going to purchase and develop the property in the waterfront suburb.
At the time, Mr Steele allegedly misled the investors; ASIC has said that he was actually a shadow director and the controlling mind of EA Invest.
ASIC further alleges that Mr Steele then withdrew more than $1.3 million of the invested funds from the company bank accounts and used the money for purposes other than the property development.
Mr Steele appeared in the Southport Magistrates Court on 5 June 2023. The matter has been adjourned to 17 July 2023 for mention. If proven guilty, Mr Steele could be facing between 12 and 20 years imprisonment, depending on the date of the offending and the amount of the fraud involved.
This the latest development in an ongoing action by ASIC against Mr Steele.
In 2020, ASIC disqualified him from managing corporations for a maximum period of five years.
The watchdog placed his two corporations, EA Invest and Eastco, into external administration in 2018 after they were found to owe investors more than $4.5 million.
ASIC’s investigation found that Mr Steele:
- Attested in an affidavit that he and another individual managed Eastco despite not being a listed director;
- Failed to lodge documents such as BAS and income tax returns with the Australian Taxation Office;
- Allowed Eastco to enter into 12 loan agreements totalling over $2.1 million in circumstances where it was uncertain whether the company would receive approvals to complete a development project;
- Had no intention of returning the funds received by investors once he became aware that Eastco would not receive the required approvals;
- Allowed EA Invest to enter into 22 loan agreements totalling over $2.4 million and failed to invest the money as promised; and
- Transferred investor funds into his personal bank accounts and used investor funds for personal expenses.
The matter of fraud is being prosecuted by the Commonwealth Director of Public Prosecutions.