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Receivers have been appointed to Gold Coast property group ALAMMC Developments following a push by the corporate regulator to preserve assets ahead of a full investigation into the company’s affairs including up to $70 million in funds estimated to have been raised from investors.
The appointment of receivers by the Federal Court to 13 entities associated with ALAMMC Developments was triggered by "urgent action" from the Australian Securities and Investments Commission (ASIC) against the company, which is said to have offered investment opportunities for purpose-built National Disability Insurance Scheme (NDIS) property developments across Australia.
Helen Newman and Andrew Fielding, of BDO, have been appointed receivers to the ALAMMC companies, which include Mortgage Mutual Fund Pty Ltd, Harvey Madison Capital Pty Ltd and Coral Coast Mutual Fund Pty Ltd.
The receivers are also in charge of the personal property of ALAMMC Developments director David McWilliams and his wife Laura Fullarton. The Federal Court had previously ordered the couple’s personal assets be frozen following a decision handed down in September.
The court has also extended international travel restrictions on McWilliams, who is now prohibited from leaving Australia or attempting to leave Australia until 1 July 2025.
The latest court ruling follows a four-month investigation by ASIC into the affairs of ALAMMC Developments and McWilliams.
The investigation centres on ALAMMC companies and McWilliams being suspected of providing financial services and of using investor funds since 1 January 2021.
ASIC’s investigation so far has identified that since April 2021 investor funds totalling about $69.47 million were deposited into the bank accounts of companies associated with the ALAMMC group.
Federal Court Justice David Yates, in handing down the earlier judgement on 11 September 2024, noted that the ASIC investigation was triggered after receiving information from the Queensland Office of Liquor and Gaming Regulation (QOLGR) about McWilliams’ gambling activities “and the fact that he had lost significant sums of money at the Star Casino”.
“ASIC suspects that the gambled funds were sourced from investments made by investors in the businesses operated by the corporate defendants, or at least a number of them, raising concerns that these funds may have been misappropriated for this purpose,” said Justice Yates.
The latest ruling from the Federal Court to appoint receivers was handed down on 22 October 2024 but the reasons for the judgement were only published yesterday.
In handing down his reasons for appointing receivers, Justice John O'Sullivan said he rejected objections by McWilliams that the claims of gambling losses received from QOLGR were “hearsay” and that they were “unfairly prejudicial”.
“ASIC submitted that the evidence could not be unfairly prejudicial because it simply sets out the facts,” said Justice O’Sullivan.
“Those facts reveal that very significant sums of money were turned over in the casino over some 17 months. The lowest monthly amount turned over was just short of $500,000 and the greatest amount turned over in excess of $5 million. In each month, there was a net loss.”
The Federal Court was told that ASIC initially received a referral from the QOLGR in February this year revealing that between 1 October 2022 and 29 February 2024, McWilliams “made bets across all gambling streams at Star casinos (excluding Keno) totalling $39.53 million with a total net loss of $3.87 million”.
“Having traced at least some of the funds provided by investors, ASIC concluded that the $39 million used for gambling appeared to have been from those funds,” says Justice O’Sullivan.
ASIC says the newly appointed receivers have been ordered to investigate the total amount of investor funds received by ALAMMC Developments and its related entities and to provide a report to the Federal Court within 28 days.
According to evidence from ASIC, three LAMMC group companies each issued information memoranda to investors looking to invest in purpose-built properties for NDIS participants who receive federal funding for specialist disability accommodation.
The investments were presented as an “invitation to invest in convertible notes” which offered fixed returns of 10 per cent annually, with distributions paid monthly. Investors also had an opportunity to receive a 15 per cent bonus payment on the completion of the development project.
McWilliams is described on the ALAMMC website as having more than 30 years of experience in the finance and property sectors.
Among the current projects in the company’s pipeline are a 12-apartment project in North Freemantle and a mixed-use development at Midlands in Western Australia with each of the projects targeting NDIS tenancies.
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