Rick Otton has had a lasting impact on some of his students, and similar risks are there for students of other wealth mentors, including Dominique Grubisa. Also see ‘Rick Otton what harm did he do?’
Property guru Rick Otton didn’t tell Sheree Becker to commit fraud. However, a large part of Otton’s dogma was aimed at conditioning students like Becker to reject any views that challenged his teaching. This included opinions of friends, family, lawyers and government agencies.
Sheree Becker, one of Otton’s “advanced mentoring students” has been found guilty of seven charges of obtaining financial advantage by deception. (Update – Sentenced 29/11 to 3.5 years jail, minimum 15 months). Feted by Otton (he referred to her as “advanced mentoring student” and “Doctor of Real Estate”), Becker contributed to his podcasts, provided testimonials for his book and appeared on stage at his seminars – telling the audience “heaps of houses and heaps of money”.
Becker’s attendance at Rick Otton seminars was mentioned in court – noting that the principles behind Otton’s teachings were “preying on those in distress”.
On 22 June 2022, the Victorian regulator for lawyers announced that Grubisa “no longer holds a practising certificate in Victoria” and is “not entitled to engage in legal practice anywhere in Australia”.
ASIC has banned Grubisa for four years from “engaging in credit activity, providing financial services, performing any function in a credit entity, or controlling a credit entity or financial services business”
Dominique Grubisa claims that “there is a misconception that taking over distressed properties is preying on struggling families”, and she says that buying a property from a financially distressed owner doesn’t make you a “vulture”. See other posts about Dominique Grubisa / DG Institute.
This is not a legal question, but an issue of your ethics and values. I don’t think buying a house cheaply makes you a “vulture”, but my view is that taking advantage of an owner’s vulnerability, ignorance and/or trust is preying on them – and some of Grubisa’s teaching encourages that.
There are many others profiting from distressed home owners – not just Dominique Grubisa students. Once a bank issues repossession proceedings, the owners are contacted by numerous businesses (>10 letters is common) wanting to profit from their situation, including a number from Grubisa students competing for attention. Some of these businesses hope to find a cheap property, others want to offer various services (including debt negotiation), often taking a caveat over the property so they are paid when it is sold. Many of these are labelled “debt vultures” by consumer advocates.
So what, in my view, could make a ‘distressed property’ deal unethical?
Dominique Grubisa and her companies offer a range of courses and products, including a course on finding ‘below market value’ properties and negotiating deals with distressed sellers (which I write about here), a renovations course, debt management, legal services, loans, insurance – and her Master Wealth Control (MWC) product which purportedly protects your wealth from governments, bankruptcy, banks, individuals and creditors.
This MWC product (costing about $10,000) has ‘found its moment’ during the COVID19 pandemic. Unlike some other DG Institute (DGI) products, it doesn’t rely on live seminars, and COVID provides just the right environment to increase people’s anxiety and sell a solution.
These are my views on some content of Grubisa’s seminars and videos.
Grubisa is a lawyer – I’m not – but these issues may raise questions that you want to check with Grubisa – or get your own legal advice about.
Grubisa promotes the fact that some of her strategies are new, for example she says about her Real Estate Rescue program “The process has never been taught or practised before in Australia”. When there is an unusual application of any law, it can mean that it has not been thoroughly tested in a court, and therefore the legal situation may be unclear.
Some strategies are presented in a way that links them to recent legislative reforms.
National Consumer Credit Code (NCCC) Regulations (2009)
Grubisa mentions the NCCC in relation to her “takeover” strategy – which involves students locating “motivated” vendors, controlling the property by way of an irrevocable power of attorney, a signed blank land transfer and other documents; and taking over mortgage payments until the house is sold for a price determined by the student.
On 15 November 2018, Rick Otton and We Buy Houses received the highest penalties ever imposed in Australia for breach of Australian Consumer Law.
The Federal Court imposed penalties totalling $18 million against We Buy Houses Pty Ltd (We Buy Houses) and sole director, Rick Otton, for making false or misleading representations about how people could create wealth through buying and selling real estate, following ACCC (regulator) action.
A $12 million penalty was imposed against We Buy Houses, and $6 million imposed against Otton personally. The penalty followed a Court hearing in August 2017 .
I have not attended a DG Institute (DG) seminar, however I have concerns that her students (“investors”) may be entering into complex financial arrangements with distressed house owners, and may have a grossly inadequate understanding of the owner’s situation and options, and possibly of the risks they face themselves.
I maintain this view despite references in DG information to “helping” owners, ensuring the owner has done “everything possible to keep their home from being repossessed”, and being “fair minded and genuinely want[ing] to help property owners solve their financial problems while earning a fair and reasonable profit in return”.
I base my comments on:
some of the information provided by DG online (including videos),
a manual DG has provided to students in relation to the Real Estate Rescue program, and
my background in consumer credit & debt advocacy.
I’m not a lawyer, but I have worked in policy and executive roles in the community legal sector for over 20 years, mainly in specialist consumer and debt legal services. Many of my colleagues are lawyers who specialise in credit, debt and consumer law, assisting clients by negotiation, in the Australian Financial Complaints Authority (AFCA, formerly Financial Ombudsman Service), and in courts and tribunals.
DG has been teaching property investment and wealth strategies for some years. She says that after the global financial crisis she went from “many millions of dollars in wealth” to “many millions in debt”. Continue reading →