Court Freezes Assets as $160m Property Scheme Unravels

A $160-million network of investment schemes has come under scrutiny in the Federal Court, freezing assets across more than 30 companies and trapping hundreds of self-managed superannuation investors (SMSFs).

The schemes were run under the Australian Fiduciaries banner, a web of entities connected to financial adviser Lee Rushton (pictured).

They include SRI Fiduciaries 2 and 3, Emporio Fiduciaries and a suite of SDA Fiduciaries trusts—now either in liquidation, receivership or subject to Court-ordered freezes.

ASIC said the intervention was necessary “to preserve the assets of the scheme and obtain a clearer picture of the financial position”.

Around 600 investors, mostly through SMSFs, have tipped in $160 million since 2020.

The vehicles stopped taking new money in September last year.

Receivers, appointed on September 11, must trace the funds and provide a report to the Court within 45 days.

Projects named in filings and creditor material include the Vaero apartments at 34 Tedder Avenue, Main Beach, and land at 3000 Springbrook Road, Springbrook.

Other identified holdings include a block at 2-10 Maroochy Boulevard, Maroochydore and a 13-storey Vista Street tower at Southport with 15 NDIS apartments and luxury residences.

Creditor reports also point to a Tamborine Mountain mansion and multiple SDA property trusts.

▲ Source: The Urban Developer

The reports further show Alroe Constructions has lodged claims for about $61,000 against SDA Fiduciaries 7 and $4.7 million against Emporio Fiduciaries for unpaid work.

ASIC told the Court it was investigating whether investor money was mismanaged across the network, citing “inadequate management of conflicts of interest, the ways investors were sold units in the schemes and how their funds were ultimately invested into a complex group of entities controlled by related parties”.

It also raised concerns about “suspected failure … to conduct regular valuations” and “loss of value in the underlying assets”.

The regulator said it sought the orders to preserve assets and obtain a clearer picture of the group’s financial position.

The Court has not made findings of misconduct and no public response from Australian Fiduciaries or Lee Rushton has been reported.