Construction scam built on forged documents and a licensing loophole

Unqualified builders who were licensed in Queensland using fraudulent documents have exploited a loophole to transfer to Victoria, where they have been employed to build homes and work on major commercial projects.

The widespread scam, which came to light this week in a court hearing, is the latest in a string of issues raised with Australia’s mutual recognition arrangements (MRAs).

As revealed by this masthead, Commonwealth MRAs have already led to under-qualified teachers and surveyors becoming registered in other states so they can transfer to work in Victoria, where they would not be qualified for direct registration.

The County Court of Victoria heard on Monday that Melbourne builder Alex Dimopoulos ran a scheme from 2014 to 2015 using fraudulent documents and the lower threshold required by Queensland’s construction regulator to gain building licences for Victorian-based migrant workers.

Dimopoulos, who owns commercial and residential building companies Oxford and Buildcense, pleaded guilty to one charge of using false documents to secure building licences for 16 builders in 2014-15.

An investigation by the Building and Plumbing Commission (formerly the Victorian Building Authority) and Victoria Police’s fraud and extortion squad initially linked Dimopoulos to 105 building licence applications and charged him with multiple offences, including obtaining property by deception.

However, after a decade-long legal process interrupted by the COVID-19 pandemic, the allegations were whittled down to the single, less serious charge.

Although the unqualified builders were working in Victoria, the prosecution was undertaken by Queensland authorities as the fraudulent documents were submitted there.

Prosecutor Kathleen Crennan said Queensland had a lower threshold for building registration than Victoria, including fewer fees and no examinations or panel interviews.

“It is alleged that Dimopoulos applied for building licences to the QBCC [Queensland Building and Construction Commission] ... in order to enable Victorian clients to obtain builder’s licences in Victoria through the mutual recognition scheme whilst circumventing the onerous licensing scheme in Victoria,” Crennan said.

“The VBA was obliged, under the MRA, to recognise the apparently validly issued Queensland licences without further scrutiny.

“Dimopoulos’ clients were primarily of migrant extraction who experienced language or educational limitations and who held concerns that they would likely have real difficulty in surmounting the VBA building licence application process.

“Other clients chose to pursue the loophole route in order to avoid the investment of time to the Victorian process, which obliged applicants to undergo an interview.”

The fraudulent documents were uncovered after the VBA noticed a 115 per cent increase in mutual recognition applications from Queensland builders in 2014-15, including many from Victorian residents who were newly registered and had no obvious connection to Queensland.

Almost 500 of those applicants were registered by the Queensland authority, prompting an investigation by the VBA’s Compliance and Enforcement Division that uncovered “promoters” who were charging unregistered Victorian builders a fee for a licence application on their behalf via interstate regulators.

The court heard that shortly after the interstate licences were granted, the promoters would apply for an automatic Victorian registration under the MRA.

Crennan said one of Dimopoulos’ clients, Farhad Younos, accused him of going too far in trying to exploit the loophole after his falsified application was rejected.

“He told Dimopoulos: ‘You f---ed up everything, because it’s all a bunch of lies. What you’re doing is wrong because you are making a loophole to business. There’s too many people with the wrong qualification and unqualified people. Using a loophole is one thing, making it a mass thing with people with no qualification, no history of work, making up job sites is wrong’,” Crennan said Dimopoulos was told.

Dimopoulos’ lawyer, Robert Richter, KC, said 40 to 70 people relied on Dimopoulos’ business for a livelihood, as did clients currently involved in up to $170 million worth of building projects.

He said his client had made a $52 million personal guarantee on one project that may be at risk if a conviction were recorded, as it may lead to his building licence being cancelled on character grounds.

Dimopoulos was found guilty of dishonesty charges in 1992 and 2009. But Richter said his client had spent the past decade rehabilitating and giving back to the community.

He said Dimopoulos did not obtain anybody’s property under false pretences and that there was no evidence of harm caused by those who obtained licences via his scheme.

“We’re talking basically about people who were migrants to this country, or the children of migrants to this country, who were trying to get work in the building industry,” Richter said.

“There is not the slightest evidence that they had caused harm or damage to anyone for whom they worked on the basis of a licence that they got.”

Judge Amanda Chambers said Dimopoulos faced a significant fine and a lengthy community corrections order. He is due to be sentenced next month.

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