Henry Kaye

Full Report

Key Points

• Henry Kaye is a Belarus-born Australian property promoter notorious for controversial real estate investment schemes targeting unsophisticated investors.

• His flagship National Investment Institute (NII) collapsed in 2003, owing 3,500 investors up to $60 million.

• Kaye has faced multiple legal actions, including charges of fraud, breaches of the Trade Practices Act, and a five-year ban from managing companies (2010–2015).

• Allegations include misleading seminar promotions, deceptive financial practices, and involvement in failed land banking schemes, such as Foscari, linked to significant investor losses.

• Despite legal setbacks, Kaye has continued to operate through associates and complex corporate structures, raising ongoing concerns about transparency and accountability.

Overview

Henry Kaye, born in Belarus and later an Australian resident, emerged in the late 1990s as a charismatic property investment promoter. He founded the National Investment Institute, which ran high-cost seminars promising to turn ordinary Australians into property millionaires through strategies requiring little to no personal capital. Described as a skilled salesman, Kaye targeted unsophisticated investors, amassing millions in revenue during the early 2000s property boom. His empire collapsed in 2003, leaving thousands of investors with significant losses. Kaye has since been linked to various property schemes, including land banking projects, often operating through associates and obscure corporate entities. While he has receded from public view, his activities continue to attract scrutiny from regulators and media.

Allegations and Concerns

• Misleading Seminar Promotions: Kaye’s seminars, costing up to $55,000, falsely claimed attendees could become millionaires without personal funds or risk. The Federal Court found these claims breached the Trade Practices Act in 2004.

• Oasis Apartments Fraud Allegations: In 2005, Kaye was charged with dishonestly obtaining financial advantage by deception related to the Oasis apartments project. He allegedly misled St George Bank by waiving rights to deposit bonds, securing $17.7 million in financing. The case was dropped in 2008 after a witness altered evidence.

• Land Banking Scams: Kaye was linked to the Foscari scheme, marketed as a luxury development but deemed “incapable of completion” by ASIC. Investors lost tens of millions, with Kaye and his sister, Julia Feldman, profiting through high-interest loans (up to 60%) via Bourke & Queen Mortgages.

• Regulatory Breaches: Kaye breached enforceable undertakings with ASIC post-2003 and was banned from managing companies from 2010 to 2015 for his role in 26 failed companies offering dubious investment education.

• Deceptive Practices: Kaye’s schemes often involved exaggerated claims about project viability and affiliations with reputable firms, such as Slater & Gordon, which were misrepresented to lure investors.

Customer Feedback

• Negative Feedback:

  • Investors in Kaye’s NII seminars reported significant financial losses, with one stating, “I paid $15,000 for a course that promised millions but delivered nothing but debt.” Many felt misled by promises of quick wealth.

  • Foscari scheme investor Bass Tadros said, “I realized there was never an intention to settle the property or complete the project. We’d been duped,” after losing $51,900 on an option and deposit with no claim to the property.

  • Real estate advocate Neil Jenman publicly criticized Kaye, stating, “Stay away from Henry Kaye. He creates pain,” highlighting widespread distrust among industry observers.

• Positive Feedback:

  • Limited positive feedback exists. Some early seminar attendees described Kaye as “charming” and “inspiring,” but these sentiments are overshadowed by subsequent financial losses and legal findings.

  • No verifiable positive reviews from investors in Kaye’s later schemes, such as Foscari, have surfaced, suggesting a lack of satisfied customers in recent ventures.

Risk Considerations

• Financial Risks: Investors face high risk of capital loss due to Kaye’s history of failed projects and unfulfilled promises. His schemes often involve complex financial instruments, like options, with no tangible returns.

• Reputational Risks: Association with Kaye could damage credibility, as his name is synonymous with deceptive practices and regulatory scrutiny. Businesses or individuals linked to him may face public backlash.

• Legal Risks: Ongoing investigations by ASIC and potential for future lawsuits increase the likelihood of legal entanglements for investors or partners. Kaye’s history of dropped charges does not eliminate future liability risks.

• Operational Risks: Kaye’s reliance on associates and opaque corporate structures (e.g., Bourke & Queen Mortgages) raises concerns about accountability and project viability.

Business Relations and Associations

• Julia Feldman: Kaye’s sister, a key player in Market First and Foscari schemes, profited from high-interest loans and was named in Federal Court findings.

• Jamie McIntyre: A controversial property spruiker associated with Kaye in land banking schemes, including Foscari and Midland Hwy. McIntyre’s 21st Century group faced ASIC action and liquidation.

• Michael Grochowski: A long-time associate described as a “shadow director” in Foscari and Bilkurra schemes, managing operations behind the scenes.

• Evans Ellis Lawyers: A Melbourne law firm linked to Kaye’s schemes, holding investor funds in trust and listed as a creditor in failed projects.

• Market First and 21st Century: Marketing firms used to promote Kaye’s land banking schemes, accused of manipulative and misleading tactics.

• Gennady “Gary” Braude: A former associate who sued Kaye for $589,519 in unpaid personal loans, alleging Kaye funded a lavish lifestyle during NII’s collapse.

Legal and Financial Concerns

• 2003 NII Collapse: National Investment Institute entered administration, owing 3,500 investors up to $60 million. Liquidator Richard Cauchi described Kaye’s empire as a “washing machine of money.”

• 2004 Federal Court Ruling: Kaye and NII breached the Trade Practices Act for misleading seminar claims. Permanent injunctions were issued to prevent similar conduct.

• 2005–2008 Oasis Case: Charged with fraud over $17.7 million from St George Bank. Case discontinued in 2008 due to changed witness testimony.

• 2010 ASIC Ban: Disqualified from managing corporations for five years due to involvement in 26 failed companies providing suspect investment services.

• 2011 Braude Lawsuit: Former associate sued Kaye for unpaid loans, alleging misuse of funds for personal expenses like nightclub visits and holidays.

• 2015–2016 Foscari Scheme: Federal Court found Kaye and Feldman charged 60% interest on loans to a failed land banking scheme, with investors losing millions. ASIC liquidated related companies.

• No Bankruptcy Records: No public records confirm personal bankruptcy for Kaye, though his companies have faced administration and liquidation.

Risk Assessment Table

Investors and businesses should avoid engagement with Kaye or his associates due to the high likelihood of financial loss and reputational damage. Thorough due diligence, including scrutiny of corporate structures and regulatory history, is essential before considering any related investment. ASIC’s public warnings and liquidator contacts should be consulted for updates on affected schemes.