Blues heavyweight first to take court action over alleged $100m Ponzi scheme

Blues heavyweight first to take court action over alleged $100m Ponzi scheme


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Carlton footy club legend Ian Collins is taking legal action against a suburban law firm and its deceased director over allegedly illegitimate mortgages linked to a suspected $100 million Ponzi scheme.

Collins, an Order of Australia recipient and former Blues president, filed a Supreme Court writ on Monday alleging that mortgages over a multimillion-dollar portfolio of properties throughout Melbourne were procured unlawfully by his close friend John Adams and AMS Ivanhoe Lawyers.

Former Blues president Ian Collins, pictured here in 2004, is taking legal action.Credit: Sebastian Costanzo

The legal documents ask the court to invalidate the mortgages alleging that AMS’ lending business had been operating unlawfully for years and procuring mortgages illegitimately.

“From a point in time that is presently unknown to the plaintiffs, the lending business was operated in a manner that was dishonest and fraudulent,” the statement of claim says.

“The total amount of investors’ funds misappropriated has not been ascertained, but the fraudulent operation of the lending practice has been the subject of several news media articles wherein dozens of investors have claimed to have lost funds in an estimated sum up to $100 million.”

Court documents also say that the mortgages over the properties were signed without the knowledge or consent of the plaintiffs.

“Mr Adams misappropriated a significant portion of the investors’ funds to his own use … instead of lending those monies to third-party borrowers at interest,” the documents say.

They allege that instead of telling the investors about the misappropriation of the funds, Adams fraudulently told investors that their money had been lent to borrowers at interest and provided investors with falsified documents.

“Certain of these fictitious loans were created between investors of the lending business … and persons who had deposited certificates of title with AMS Ivanhoe for safekeeping … when in fact the loans had not been agreed between the purported parties, and no monies had been advanced to the borrowers/mortgagors to support the contrived mortgages.”

The writ also names Adams’ decades-long colleague and business partner at AMS Ivanhoe Lawyers, Shane Maguire, as defendant, alongside snooker bar The Brunswick Club.

John Adams and his firm, AMS Ivanhoe Lawyers.

The lawsuit also makes several allegations against Maguire, linking him to a series of fraudulent mortgages and saying he told investors that Adams was the architect of the scheme.

“Several of the plaintiffs or their representatives have sought evidence from Mr Maguire justifying the disputed dealings, and he has been unable to provide such evidence, and has in several instances conceded that the dealings were fraudulent transactions perpetrated by Mr Adams,” the documents claim.

“Mr Adams acted with actual dishonesty, and thus acted fraudulently. Whilst Mr Maguire’s conduct was merely reckless, he failed to have any regard to the truth or otherwise of the certifications made in his name.”

Collins declined to comment when contacted by The Age. There are eight co-plaintiffs listed in the writ with Collins.

Earlier this month the Coroners Court of Victoria launched an investigation after major discrepancies in the firm’s trust accounts were discovered by staff in the days after Adams’ death.

A member of Adams’ family informed employees at AMS Ivanhoe Lawyers that the 81-year-old had collapsed at his Big Hill property on the Great Ocean Road, near Lorne, on October 20.

The father of four was quietly buried at a private ceremony in Lorne on October 26. Maguire did not attend the funeral.

This masthead previously revealed that just $80,000 was found in the law firm’s trust accounts after Adams’ death, which was not enough to cover disbursements to investors for the following month, according to a source with knowledge of an investigation by the Victorian Legal Services Board who is not authorised to speak publicly.

Dozens of wealthy clients, including AFL heavyweights and racing identities, invested millions of dollars with the law firm, which lent out money to first mortgagors at significantly higher rates of interest than offered by the banks.

A source close to the company said staff had discovered that investments were not deposited in trust accounts and had instead been funnelled through an external Commonwealth Bank account not associated with the business.

The loss has been estimated at anywhere between $20 million and $100 million.

The source said none of the other employees or directors at the firm knew where the money had gone, and there is no suggestion that any other person at AMS other than Adams is suspected of wrongdoing.

The Legal Services Board, probing the law firm, is expected to brief fraud squad detectives.

Law firm Gordon Legal announced last week that it had begun a class action investigation after being contacted by a “devastated family” who had been told their investment had vanished.

Maguire has been contacted for comment.

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