Mortgage scammer’s second chance

Fraudster convinces real estate tribunal he is a changed man, writes John Weekes.

A convicted fraudster jailed for a mortgage scam can practice as a real estate agent again.

Phillip Julian Cavanagh and his supporters have persuaded the Real Estate Agents Disciplinary Tribunal to give him a second chance.

One supporter, Lyn Lockwood, said everybody made mistakes but Cavanagh deserved a fresh start.

Cavanagh teamed up with fellow Barfoot & Thompson agent Raghu Aryasomayajula in about 2006 to get subdivision-capable properties in Auckland ready for development and on-sale.

But the business faced financial pressure and degenerated into fraud, with mortgage applications containing false information. Lenders lost $3.84 million on loans advanced of $12.989m.

Aryasomayajula denied charges and was found guilty at trial.

Cavanagh admitted fraud, and in 2009 was sentenced to two years and five months in jail.

In a new decision, the Real Estate Agents Disciplinary Tribunal said Cavanagh was refused a salesperson’s licence in January but had asked for a review of that decision.

Lockwood, an agent in Auckland’s upmarket Freemans Bay, told the Sunday Star-Times that Cavanagh deserved a second chance.

‘‘I do believe in him,’’ she said. ‘‘It’s not always one person’s fault. Judging isn’t always the way to look at these situations.’’

Cavanagh was released from prison after serving about onethird of his sentence, the tribunal said. He then worked in property maintenance, building and related jobs.

Tribunal member Fiona Mathieson said Cavanagh started a building and construction apprenticeship in 2015.

Applying in 2019 for a salesperson’s licence, he included a letter from Lockwood’s agency, Hallmark, offering him employment.

He didn’t mention his convictions but said his licence was suspended in 2007 and cancelled a year later.

He was asked to supply the judge’s sentencing notes and did so in December.

The Real Estate Authority registrar said Cavanagh was not a fit and proper person for a salesperson’s licence, and voiced concern about the planning of the old fraud schemes.

The authority said Cavanagh incorrectly stated he hadn’t been convicted of a crime involving dishonesty in the 10 years preceding the application.

Cavanagh said he deserved a second chance in the industry if he could show he was now a fit and proper person despite the offending.

He addressed the tribunal, along with three supporting witnesses.

Mathieson said Cavanagh was closely questioned about the fraud schemes.

‘‘He said he had no addiction or personal issues, and at the time was young, successful at real estate sales, greedy, and thought he would succeed at everything he did.

‘‘He said he accepts that he was wrong and accepts full responsibility for his offending.’’

Cavanagh said his lifestyle and values had changed and he was no longer interested in property development.

Lockwood told the tribunal Cavanagh had rehabilitated, was open about his convictions and was a generous man.

She would supervise and mentor him.

Another supporter who’d known Cavanagh since 1991 and worked with him on multiple projects said he had no concerns about Cavanagh’s integrity. Cavanagh had already spent 13 ‘‘hard years in the wilderness’’.

Mathieson said the convictions could not be ignored, and Cavanagh might again have contact with fraud victims.

‘‘But the convictions are not necessarily determinative,’’ she added.

The tribunal heard mortgage scam victims had been compensated.

Mathieson accepted Cavanagh was now a different, and better, person. He did not try to conceal his convictions, and she noted Lockwood’s detailed supervision scheme. The application for review was granted. He is now listed as a registered agent.

Lockwood told the Star-Times Cavanagh wasn’t immediately available to comment.

‘‘He hasn’t had a chance to celebrate. He’s working too hard to complete his building certificate.’’

‘‘At the time [he] was young, successful at real estate sales, greedy, and thought he would succeed at everything he did.’’ Fiona Mathieson Real Estate Agents Disciplinary Tribunal