Fraudster had 'no bearing' on closure

CLAIMS that a defaulted loan to a convicted Gold Coast fraudster and extortionist had a direct bearing on the impending closure of East Coast Mortgage Trust have been vigorously denied by the trust's directors.

Former East Coast investor and borrower, Rod Lambert, released a public statement yesterday calling on the trust's board to disclose the details of the loan to Mario Girardo, who was sentenced to four-and-a-half years jail for extortion last year, having previously been convicted of fraud in 2001, when he was handed an 18-month suspended sentence.

Mr Lambert, who says he himself lost millions because of Girardo's fraudulent dealings on the Gold Coast, claims East Coast directors were made aware of Girardo's history prior to the $4m loan being issued.

A spokesperson for the $150m mortgage fund said it "strongly refuted any reported third-party claims of wrongdoing in relation to any of its loans".

"All our loans are subject to exami-nation by external legal advisors, accountants and auditors," the spokes- person said.

"All financial institutions are the targets of fraudulent actions from time to time. In this case we were the subject of fraud. The individual in question defrauded other leading financial institutions at the time."

The spokesperson said the 2008 loan had been cleared in 2009 and had no bearing on the decision to wind down the trust, adding that investors suffered no loss as a result of the default.

"It is a matter of public record, through the Supreme Court of NSW, that the trust has successfully under- taken proceedings against Mr Lambert for the recovery of money owing by Mr Lambert to the trust."

Topics:  east coast mortgage trust

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