| Top Estate Agent 'Took Money' |
Top Estate Agent 'Took Money'
Top estate agent Wendy Machanik’s property agency was in such deep financial trouble that she had to dip into clients’ deposits to keep the business afloat and fund her lifestyle.
This is according to a forensic report, which formed the basis of a provisional court interdict prohibiting Machanik from touching money in her agency’s trust accounts.
A former employee claimed in the report that Machanik spent R80 000 of trust account funds on earrings at a charity auction.
The Estate Agency Affairs Board (EAAB) tasked risk management firm Pasco to investigate Machanik's company, Wendy Machanik Properties (WMP), after receiving anonymous complaints.
The EAAB subsequently brought an urgent application against WMP and Machanik personally, and on New Year’s Eve Judge Margaret Victor of the South Gauteng High Court ruled there was a “substantial risk to the public” if Machanik continued to control her agency’s trust accounts.
'No missing money'
On Friday WMP issued a statement in which the agency claimed that there was no money missing from their trust accounts.
“WMP would also like to reassure anyone who has recently purchased or rented a property through Wendy Machanik Properties that there is no reason to fear losing their deposit. The company would also like to state that at no time in the past has it failed to pay anyone who was owed money that had been held in one of its trust accounts.”
A letter was found on WMP financial chief, Bruce Bernstein's computer, in which he explained to Machanik why they had to use the money. It stated: “The business is under-funded and until August 2006 was loss-making by approximately R400 000 to R500 000 per month. As from September 2006, the business appears to be almost breaking even and may start becoming profitable depending on sales. The business remains under-capitalised even if the debt to the receiver of revenue is settled in full.”
Fictitious account
In order to pay salaries, creditors, agents’ commission, bonds “and your personal expenses”, Bernstein created a fictitious account called Cross/Kline. This apparently stood for "Cross the Line".
According to Pasco’s report, “not less” than R25 million was drawn from the agency’s trust accounts between March 2007 and February last year. In the same period, only R10 million was repaid into the trust accounts.
Pasco found it was an "organised and thoroughly established practice at WMP to use client money held in trust to finance WMP business and Machanik's personal expenses."
A former employee told how clients' money was used to cover expenses like salaries as well as personal expenses like Machanik's house. Ahmed Patel, Adriaan Basson and Nicola Lazenby - City Press |
