Business collapse A Team Property Group marketed the idea of riding the real estate boom but to many mum-and-dad investors, it turned into a nightmare, write Max Mason and Jessica Sier.

For Damien Rothstein it all started with a slick Face-book advertisement trumpeting ‘‘The Hopkins Formula’’ to property investment.

Canberra-based Rothstein had had some luck flipping properties in the United States and was keen to find new investments that would return more than 10 per cent. Buying old residential houses, developing them into units and on-selling them in a hot Australian property market seemed like a great opportunity.

In 2018, he contacted the A Team Property Group, a property investment mentoring and education business run by young Melbourne businessman Sasha Hopkins that was crowned the fastest-growing business in the country two years later.

Hopkins likes to tell prospective clients his personal rags-to-riches success story. The 33-year-old shot to prominence styling himself as a property mogul after founding A Team in 2014.

He made a name for himself in property development circles and built a following based on social media that depicted him as a smartly dressed, smiling, family man. Hopkins would release photos and videos showing himself with his two children and then-wife Alana Hopkins.

Persuaded by a slick sales pitch and a claimed track record of delivering returns of up to 40 per cent on money invested, Rothstein parted with $400,000 of his savings in May 2018 through a loan agreement.

But rather than increasing his investment, he is now the leader of a group of disgruntled mum-and-dad investors, many of whom spoke to The Australian Financial Review, and many of whom have sunk their superannuation money or savings into now collapsed project development projects.

A key player in four collapsed Hopkins’ entities is Melbourne-based property developer Greg Shaw. More than $11 million of ordinary investor funds were lent to seven companies associated with Shaw. And that money, plus promised returns, wasn’t repaid.

Now more than 130 investors are chasing $23.5 million of unpaid loans and interest from six companies linked to Hopkins, four of which advanced money to entities related to Shaw, a 47-year-old developer originally from South Australia.

The nearly $17 million of initial capital raised by A Team through loan agreements with everyday investors may be a small quantum, but in many cases it represents life savings and huge chunks of superannuation earned over decades.

‘‘The way [Hopkins] described it resonated because that’s the way I did it in the States — the only thing is I’ve never done any from ground-up builds,’’ Rothstein tells the Financial Review. ‘‘I’m very dubious of people who name things after themselves, but I don’t discount people.’’

An investigation by the Financial Review uncovered hundreds of pages of documents, including investor and loan agreements, liquidator documents, email trails, contracts, information memorandums, corporate filings and legal documents that go part of the way to explaining the frustration of investors who were promised up to 50 per cent returns.

But instead, they are chasing their life savings and the superannuation money they used to invest in Hopkins’ property scheme, and many claim they were unaware of Shaw’s involvement in the projects.

The saga is a sorry tale of what can happen when cashed-up investors chasing returns in a low-yield world lap up too-good-to-be true promises that are supercharged by social media advertising.

It also reignites debate on whether those pushing property investments need qualifications similar to those spruiking stocks, and whether more regulation is needed to protect Australians from outfits trying to profit from the mistaken belief that the property boom will never end.

Rothstein says he undertook extensive due diligence before investing. Previous investors said Hopkins had paid out, and he was a performing creditor at the time.

‘‘I was saving that money since 2008,’’ he says. ‘‘The thing is I’d like to say I’m angry. However, anger with no outlet or resolution just affects the people around me, and me. I’m not angry, I’m disappointed, I’m disappointed in him as a person.

‘‘I was angry. There’s a level of powerlessness that contributed to my anger. I had to resolve that or I’d be sitting here as a steaming pile of anger. I hear it and feel it in all the other investors, that’s how I connect to them and help them understand what they can control.’’

Dressed in sharp suits and wearing expensive watches, Hopkins featured in segments on the now-defunct YourMoney channel, 9News.com.au, The Daily Mail and more. Nine owns the Financial Review.

He often referenced his own $55 million property portfolio, which he said he had built over a decade ‘‘from nothing’’.

In 2020, A Team Property Group topped the Financial Review’s Fast 100 list after reporting a compound average growth rate of 152 per cent over the prior four years.

Hopkins and A Team hosted property seminars where the self-proclaimed mogul would teach people his investment strategy and pitch his ‘‘dream to help over 1000 Aussies invest in property and help those become financially free’’.

While Hopkins mostly marketed A Team as a property education business, he often offered ‘‘joint venture investment opportunities’’ to paying clients.

Neither A Team nor any of the collapsed businesses have an Australian Financial Services Licence, but property investment is not at present covered by the AFSL regime.

After finding investors through Facebook advertising, A Team would suggest to mum-and-dad investors that they pool their money to fund larger property developments, which could be sold at a profit.

Sometimes A Team would alert investors to the possibility of rolling money over from their superannuation balance to a self-managed super fund.

A Team would often refer people to an accountant named Jean-Marc Raffaut, who has a practice in Cheltenham in Melbourne’s south-east, to help them set up an SMSF. Raffaut is not accused of any wrongdoing and declined to be interviewed for this story.

For new developments, whether in Brisbane’s Clayfield or Melbourne’s Prahran, Hopkins would often set up a new company. He would accept investments from retail investors and charge a $15,000 fee for managing the project.

But Hopkins’ business opportunities have crumbled, along with his carefully crafted persona. The founder and face of A Team faces allegations, according to the liquidators’ report, of breaching his director obligations to act in the best interests of the company by failing to adequately secure loans, and unjustified director-related transactions related to project management fees the liquidators claim no benefit was received for.

According to documents, contracts and email chains seen by the Financial Review, 137 investors tipped in about $16.8 million, and those now unsecured creditors say they are also owed 6.7 million in unpaid interest.

Investors are chasing losses from six collapsed companies associated with Hopkins. Four of those lent $11.4 million to Shaw’s companies without adequately securing it, according to liquidators. (Shaw is a different Greg Shaw to the chief executive of property developer Mulpha.)

A Team – which sourced money for various related entities, but was not the borrower – remains an active company and did not fall into administration.

Liquidators also allege Hopkins’ A Team and Hunter Hopkins businesses were paid at least $2.2 million in project management fees by the collapsed companies, and that those fees were unjustified.

These transfers have raised liquidators’ eyebrows. They’ve looked at the contracts and can see no justification for the extra fees and no corresponding contracts. Hopkins contests this, arguing the fees were proportionate to the different work and timelines his companies did on the projects.

Investors began noticing things were awry when the completion dates of their projects were pushed back again and again.

Queensland blasthole driller Justin Hynes was one of them. The 46-year-old from Airlie Beach also came across A Team for the first time on Facebook, and invested $95,000 in a Brisbane-based project.

Hynes says Hopkins was arrogant but seemed ‘‘smart enough with a nice family who was good at this property game’’.

In the context of a booming Australian property market, the pitch was persuasive. ‘‘I thought it was all pretty straightforward,’’ Hynes tells the Financial Review.

‘‘He was a pretty arrogant guy on the phone, telling me he’d make me a millionaire, but he’d reckoned he’d done all this many times before, and I just wanted to put some of this money I had to work.’’

Hopkins’ LinkedIn page states his clients have a combined property portfolio value of more than $200 million. He says more than 500 properties over his career have reaped positive returns for investors.

Hynes was informed he could set up an SMSF, and an email chain seen by the Financial Review showed he was referred to the accountant, Raffaut.

Armed with his fresh SMSF, Hynes invested $80,000 plus a $15,000 fee for A Team into a project in Brisbane’s upmarket suburb of Clayfield.

The company was called Junction Road Clayfield and it was incorporated in 2018. The project was pitched to investors as a ‘‘joint venture’’ to knock down houses at 149, 151 and 153 Junction Road, Clayfield and develop nine townhouses.

Thirteen investors tipped in a total of $1.53 million, and were promised rates of return of 30 per cent to 50 per cent on the principal over 14 months.

Investing alongside Hynes was Vanessa-Lee Doller, a business owner from Tasmania who tipped in $147,000 through her SMSF and signed a loan agreement in 2018. Doller is Rothstein’s former partner and, coincidentally, they both had invested in A Team properties before meeting.

‘‘I went in wanting to invest with them,’’ she says. ‘‘I spoke with their consultants, who said, ‘What are you doing? You’ve got a house, so let’s talk about equity.’ I couldn’t move any of the equity from my own home at the time because I was a single parent. I wasn’t working at the time, I was still home with my child.

‘‘So super was suggested to me at the time — my super was in a REST account – and I had to transfer into a self-managed super fund and they did share their account details with me. It was very guided. At the same time, I take ownership of my decision. I did say yes. I did do it all.’’

But the Junction Road project almost immediately ran into difficulties, with the four directors of the company resigning and Hopkins forced to install himself as director.

According to the liquidators, Hopkins then set about borrowing more money to complete the purchase of the land, and then refinanced the properties several times using ‘‘risky borrowing strategies’’.

Despite the inadequate funding, A-Team Property sent updates to investors throughout 2019 assuring them the development was on schedule and on budget, using a colour-coded spreadsheet to illustrate progress.

But as time wore on, the upbeat emails turned to distress and the project was pushed out later and later. The initial 14-month plan blew out to 2 1/2 years.

In July 2020, Hynes had had enough of the delays and engaged lawyers Macrossan & Amiet to try to get his money out of A-Team Property or ‘‘wherever they’d sent it’’.

He sued Junction Road Clayfield in the Proserpine Magistrates Court, where the judge found the struggling entity must repay him $106,007.

Despite repeated attempts at contact, Hynes says A Team suddenly went quiet. His lawyers couldn’t reach them, and his contact at the company said he had left the business.

Doller, like Hynes, became increasingly worried about the project and frustrated with a lack of communication.

Three years after signing her official loan agreement, she issued a notice of default and a demand for payment in September 2021. No payment was made, and in October Doller’s SMSF applied to the Federal Court of Australia to wind up the Junction Road entity.

She was owed $229,000 all in all, including $147,000 of principal from the original loan, $73,500 interest on the loan and $8500 in legal costs under the variation deed.

In December 2021, the same day as the hearing where the court ordered Pitcher Partners be appointed to the Junction Road entity, investors received a curt email from A Team telling them liquidators had seized the entity, frozen all associated bank accounts and any communication would occur through liquidators.

‘‘We apologise for this unexpected turn of events,’’ reads the December 8, 2021, email.

The three properties on Junction Road in Clayfield still sitting vacant and fenced off, are are to be sold ‘‘as-is’’, with the proceeds distributed to investors.

‘‘I’m 42 years old, a single mum of two girls,’’ Doller says. ‘‘I’m coming to terms with the fact that I have zero money now in my super funds. I worked 25 years to get that amount of money.’’

Doller says she’s gone into debt pushing through with the liquidator to wind up Junction Road, ‘‘but my hope is that we at least get some sort of justice’’.

Hynes is also bracing for his solicitors to confirm he probably won’t see his money again. ‘‘I should have listened to my missus at the start,’’ he says. ‘‘She straight away said this whole thing was a dumb idea.’’

Sasha Hopkins agreed to speak with the Financial Review one Friday afternoon late last month.

Via video link from his Melbourne home, he said he wants to clear his name after furious investors banded together on Facebook, Reddit and their own website to complain about their lost property investments. Hopkins says he has issued concerns notices to Facebook and Google.

‘‘It’s been devastating,’’ he says. ‘‘Every time a client has lost money, I have also lost money. What’s been written online, it’s not who I am. I’m honest, I’m a dad.’’

Hopkins says he sold 11 properties from his own portfolio to keep the rest of his projects going following the first collapses in December 2020. He says he will donate any of the returns the liquidators can get from the failed projects and settlement with Shaw to investors who have lost their money.

Dressed in his trademark suit, complete with heavy gold rings and an expensive watch, Hopkins places the blame squarely on Shaw, the Melbourne-based property developer he met through a trusted acquaintance from a business coaching course.

Court documents show Hopkins began suing Shaw and his companies over the loans between the entities in April 2020 ahead of the collapse of many of the projects.

Hopkins says the pair met five or six times over several months in 2018, discussing Shaw’s past projects, looking at feasibility documents and photos, and planning ways they could work together.

‘‘It felt right,’’ Hopkins says of the decision to partner with Shaw, who was authorised to begin discussing plans with architects, interior designers and builders.

The pair launched eight projects, while A Team went on a fundraising blitz, recruiting 115 investors who tipped in about $14.1 million, $11.4 million of which was lent to seven entities associated with Shaw.

Hopkins felt so comfortable with Shaw that he also failed to adequately secure the money lent to Shaw’s entities. Often in large commercial partnerships, the lender will require some form of collateral that they can retain or sell in case the partnership turns sour or one of the parties fails to meet their obligations.

Liquidators sifting through the wreckage of entities say this failure forms one serious way Hopkins’ breached his director duties, according to their report.

Hopkins told administrators the reason for the collapses was the breakdown in his relationship with Shaw, which resulted in his entities not meeting agreed repayments under the loans to investors, and the COVID-19 pandemic.

However, the liquidators claim that is only part of the story. Hopkins – in his arrangement of timing for payback of funds borrowed from investors, plus returns – put Hunter Capital Investments Pty Ltd, which lent the lion’s share of funds to Shaw’s companies, in a tight bind. It left little working capital to keep the business running should Shaw’s businesses not meet the agreed timeline.

‘‘If the loans . . . were advanced to a third party, then appropriate security should have been sought and obtained by the director to protect the company’s advance,’’ the liquidator’s report said.

‘‘If the company held securities for the loans, the company could have exercised those securities when the relationship between the director and Mr Shaw broke down. We are of the opinion that the director has breached his obligation to act in the best interests of the company by failing to adequately secure the advances.’’

Hopkins insists he had no choice.

‘‘Additional security measures weren’t possible without actually owning the acquired site,’’ he says. ‘‘And, I’m speaking generally here, but no developer would put up their own assets as security. And even if we were able to lodge what’s known as a second mortgage over the property, it wouldn’t have made any difference as Greg’s done what he’s done, he’s taken this money and is in hiding, nowhere to be found.’’

Failing to properly secure his investors’ money didn’t emerge as a problem until 12 months into the partnership, when Hopkins says Shaw began missing targets and blaming power and water utilities or council approval for hold-ups across projects.

Hopkins sued Shaw and his companies in April 2020. However, he failed to resolve the issue before being forced to put the companies that were owed money into administration. After Hamilton Murphy were appointed to the collapsed entities, they took over the legal wrangling with Shaw, eventually hashing out a mediated deed of settlement for Shaw and his entities to pay back $9.55 million.

Shaw defaulted on the first two payments, leading Hamilton Murphy to eventually relaunch legal action against him and his companies. As of February 23, Shaw and his companies had repaid $120,000. The Victoria County Court made orders last month that Shaw and two of his companies pay back two of the collapsed Hopkins businesses $4.1 million.

Many investors who spoke to the Financial Review claim they were unaware of Shaw’s involvement in the proposed developments until various entities collapsed. Hopkins insists they knew.

‘‘People were informed,’’ he says. ‘‘We didn’t go into the exact details of every single bit about the external project manager because it’s a competitive industry and that’s intellectual property.’’

The nature of property investment schemes has changed over the past few decades, but the operations of property spruikers has largely remained the same. The topic has been subject to multiple parliamentary inquiries in the past 25 years.

Property investment is not covered by the AFSL regime despite many government inquiries dating back to 1997 recommending the need for more regulation in the property landscape.

Despite that, liquidators for Hopkins’ companies made a point of highlighting in their report that the A Team and Hunter Capital did not have an AFSL.

Those who have lost money investing in Hopkins’ entities join a long list of Australians who have lost money to property spruikers, who, according to the Australian Consumer Law government website, ‘‘invite people to their ‘wealth creation’ seminars, often for free, with the promise of investment tips or opportunities’’.

‘‘They typically promote a property investment system or market a specific property development.’’

In 1999, the Australian Securities and Investments Commission reviewed financial advice in real estate following the 1997 Wallis Financial System Inquiry, which made several recommendations around real estate agents and financial advice, including that agents should hold a financial advisory licence.

The ASIC review found a strong similarity between advice for real estate and investment in shares. The agency was of the view that there was a strong argument for comparable regulation.

One of the key recommendations from a 2016 parliamentary inquiry was making property investment advice a Commonwealth responsibility – it is now under the states and territories – as well as defining property investment advice in the Corporations Act and ASIC Act, and requiring anyone providing property investment advice to hold an AFSL. These recommendations were not taken up by the government.

‘‘There definitely needs to be some sort of registry that has teeth,’’ Rothstein says. ‘‘If you’re going to be involved in investment in any sort of property, it doesn’t need lots of legislation, you have to be on there, you have to open the kimono.

Rothstein says something similar to qualifying as a financial adviser is needed.

‘‘Whatever the certification is, it needs to have a stick, a very big stick, to prevent situations like this. You need something, so it doesn’t take us as the shareholders so much time, money, heartache to get something done. ASIC needs to step in straight away.’’