$50m property loan scheme in court

Malcolm Duncan Mayer. Photo / Steven McNicholl

A bankrupt property developer allegedly used fronts and false information to borrow more than he otherwise could have as part of a $50 million loan scheme, a court has heard.

Malcolm Duncan Mayer has pleaded not guilty to 36 charges in a Serious Fraud Office case - 26 for dishonestly using a document and 10 for using forged documents.

The 55-year-old's trial began for a second time in the Auckland District Court yesterday before Judge Brooke Gibson.

Crown prosecutor John Dixon alleged in his opening statements that Mayer had dishonestly used documents to obtain almost $50 million of loans from a company called Trustees Executors Ltd (TEL).

TEL is chaired by former Prime Minister Jim Bolger and Mayer allegedly made loan applications with false information to the company to buy 26 Auckland properties between 2003 and 2007.

Dixon said in some instances TEL received documents which gave the impression someone unconnected to Mayer was buying a property when in reality the defendant or his alleged co-conspirator Simon Turnbull was the purchaser. Dixon said Turnbull could not appear as a witness or a defendant as the man had left the country and his whereabouts was unknown.

By disguising who was really purchasing a property, Mayer was able to sidestep TEL's $4 million limit on what one individual person or connected set of people could borrow, Dixon said.

In one example, Dixon said Mayer arranged to buy a building for $1.74 million in the name of Lou Roderick Martin. Dixon said no one involved with the sale ever dealt with Martin and the Crown had not been able to track him down.

Despite not being the named purchaser, the court heard yesterday how Mayer paid $130,000 in cash as a deposit, which the real estate agent involved described as a "very odd" situation.

In a second sale and purchase agreement for this property, Martin sold it to Mayer's MDM Holdings, Dixon said. Mayer obtained a valuation of $1.85 million and applied for finance for the second purchase from TEL. Because of the higher valuation, Mayer was able to get $70,000 more from TEL than he would otherwise have been able to under the original sale price of $1.74 million.

Mayer first went to trial in this case almost two years ago. However, the proceedings were aborted due to Mayer's health at the time.