Illustration: Simon Bosch They used the cash to buy membership in a club known as 21st Century Property Direct and made their first payment on options of farmland earmarked for luxury residential developments outside Shepparton and Bendigo. Five years later – the couple now have a three-year-old son and are expecting a second child – not a house has been built, not a sod turned. The Shepparton project, promoted by Sunshine Coast-based McIntyre, is a trainwreck. Last week the news got worse for Johnson, with the company behind the Bendigo scheme in administration and the Australian corporate watchdog announcing it would liquidate five more of McIntyre's projects. "If I had left everything alone and done nothing, we'd be better off," says the young sparkie.

A property development at Melton. Credit:Simon O'Dwyer "We'd at least own our own house outright." The Australian Securities and Investment Commission's (ASIC) concerns about such land banking schemes are not limited to McIntyre's operation. Nor is it alone in its concerns. A Fairfax Media investigation of the land banking schemes has also triggered a Senate inquiry, which is due to begin hearings later this year. Over a period of five years, McIntyre and companies associated with Julia Feldman, the sister of notorious property spruiker Kaye, have sold thousands of "options" on land lots in at least eight land banking schemes in Victoria and Queensland. Conservative estimates suggest more than $100 million has been tipped in. Now everyone from Johnson to ASIC and the Senate committee are asking the same question. Where is the money? The deluxe developments proposed on the outskirts of Shepparton, Bendigo, Ballarat, Melbourne's west and south-east, and Townsville, have been spruiked by fast-talking salesmen at seminars organised by 21st Century and Feldman-linked company Market First.

If I had left everything alone and done nothing, we'd be better off. David Johnson The targets are Mum-and-dad investors from across Australia lured by the promise of windfall profits once the farmland is developed for housing. Glossy brochures and videos feature luxury golf or vineyard estates, "unique communities" and "architectural masterpieces" supposedly designed by big-name architects, such as Fender Katsalidis, who have since distanced themselves. Even renowned legal firm Slater and Gordon had a role at one stage advising investors in the elaborately named Veneziane and Foscari schemes proposed for Melbourne's west. The seminars, conferences, and cocktail gatherings have featured a who's who of international get-rich luminaries, including the prolific Rowan Burn from company Market First, and headline-grabbing speakers Virgin founder Richard Branson, Arnold Schwarzenegger and US spruiker John Demartini. Fairfax Media does not suggest that Branson, Schwarzenegger or Demartini played any improper role in the marketing of the land banking schemes. In the wings were 21st Century and Market First's recommended accountants and lawyers with option contracts, legal disclaimers and self-managed super fund structures. All Johnson, and his fellow investors, had to do was sign the paperwork. And it has cost them.

The options, costing up to $40,000 each, give buyers the ability to buy a block of land up to 15 years in the future. But they are not legally linked to a land title, and they limit the buyers' rights, specifically precluding them placing caveats on any property. Few of the investors questioned by Fairfax Media fully understood the risks associated with their investment. Last week, the regulator launched court action to force McIntyre and his brother Dennis to hand in their passports and it is seeking further orders to tip five of their projects into administration. In a written statement ASIC describes the projects as unregistered managed investment schemes, and alleges the ... 21st Century group of companies and Mr McIntyre has been "unlawfully carrying on a unlicensed financial services business". McIntyre needed to be restrained from promoting the schemes, ASIC says.

On Friday Senator John Williams grilled ASIC about what it was doing to address the problem. And the mainstream development industry has also weighed in with concerns, warning investors about buying options in future housing estates that may never be built. Former Urban Development Institute of Australia chief executive Tony De Domenico has described such options as "high-risk investment products, not land sales". Slater and Gordon, too, has been caught in the fallout. After being drawn into the schemes as an adviser to clients on two projects in Melbourne's west, the company withdrew. Last year it wrote to clients warning they may have been misled, and paid too much for their lots. Notably, it also withdrew because the lawyers acting the developers would not disclose the identity of all of the individuals behind the projects.

The catalyst for the latest round of controversy is Midland HWY Pty Ltd, the company behind the 700-lot project north of Bendigo called Hermitage. Mum-and-dad investors like Johnson have tipped more than $25 million into the estate on the lure of Fender Katsalidis-designed homes adjoining a lush golf course. Midland HWY is now in the hands of administrators PPB Advisory. The company's previous administrators, Hall Chadwick's Richard Albarran and David Ross, were forced out by recent ASIC legal action. But prior to their departure they that had noted that large sums of investor money placed in legal trust accounts had quickly flowed out. At least $23 million was paid for unspecified services to Project Management Australia, a company controlled by Michael Grochowski, himself a prominent player in many of the land banking ventures. Grochowski and Project Management Australia have played a frontline role, dealing with councils, authorities and consultants in projects in Melbourne's west, Ballarat and Bendigo. Grochowski refused to be interviewed for this story.

The administrators note that Hermitage had won development approval last year and town plans have been submitted. But the challenge of unravelling what has happened to creditors' money at Midland HWY will delay the project for at least a year. Its collapse mirrors the failure of another 21st Century project in Shepparton called Moira Park Green City, later known as Botanica. In March, Fairfax Media revealed how Shepparton developer Nejat Mackali worked on the early stages of Moira Park with Kaye, Feldman, McIntyre and 21st Century. Shepparton appears to have been the prototype for the other options-based land banking schemes across Victoria, and in Townsville. However, the relationship between Mackali and the 21st Century team collapsed and the project imploded. The Shepparton scheme fell into liquidation.

Administrators Jirsch Sutherland told Moira Park creditors $4.7million was invested as options, about $2.4 million is unaccounted for. From the legal row ensued emerged evidence of the involvement of Kaye and Feldman. The documents also reveal Kaye's early involvement in the Bendigo scheme promoted by 21st Century as Acacia Banks, rebadged as Hermitage. Belarus-born Kaye first came to prominence in the early 2000s as the head of a get-rich-quick property empire that targeted unsophisticated investors. It collapsed in 2003 owing 3500 investors up to $60 million. He was later found by the Federal Court to have breached the Trade Practices Act. His five-year ban from managing companies expired this July. In a surprise move this week, ASIC ramped up its challenge to the schemes seeking orders to get administrators appointed to the rebirthed Shepparton Botanica project, another in Bendigo, a third in Wallan, an estate in Mount Cottrell and one in Townsville. It is an uncharacteristically strident move by a regulator often criticised – especially by Senate committees – for its lack of aggression.

The court action could prove disastrous for McIntyre and his associates if ASIC is successful in declaring that land banking schemes are really unregistered managed investment schemes in disguise. Managed investment schemes require an ASIC-issued financial services licence and a level of transparency not seen in land banking schemes. Of mounting concern to those who scrutinise land banking schemes is the investors' use of self-managed super funds to buy "options." The Abbott government's sweeping Murray inquiry into the financial system recommended that self-managed super funds be banned from borrowing to buy assets such as property and shares. Such funds are covered by financial products legislation and regulated by ASIC whereas property is one of the few asset classes that is not.

In the hothouse of rapidly rising property prices in Australia's capital cities, regulators are particularly concerned about people moving funds from existing super accounts to self managed funds to finance property purchases. Philip LaGreca, from SMSF fund administrator Multiport, points to some "very unusual behaviour in this space". At last count, Australia had about 550,000 self-managed super funds with up to $15 billion invested in property. How much has gone into McIntyre-style schemes is not clear. "Nobody really knows," LaGreca says. "Is it a runaway problem? Probably not. Do we want to stop it turning into that? Absolutely." He says McIntyre's 21st Century "cleverly" sells itself as an "educational" service, thereby skirting rules requiring a licence for those who give financial advice.

ASIC and McIntyre will fight out the claims in the Federal Court in the coming weeks and months. 21st Century says it will defend the matter. On his 21st Century blog McIntyre confirms the company's intention to defend the ASIC action. He says ASIC's allegations are "deliberately misleading "in and part of a "typical tall poppy witch-hunt". And he calls for a Royal Commission into ASIC. But even if the regulator wins, its job is only part done. Similar schemes operating in Melbourne's outer west and spruiked by a separate but closely related property firm, Market First, have so far avoided ASIC action.

Feldman has been a key player in both 21st Century and Market First. Insiders confirm that she plays an identical marketing role in both Market First and 21st Century and has had a role in most of schemes. Also central to the operations of both Market First and 21st Century is Greg Klopper, the man behind Global1, and another name linked to Kaye, whose company organises major spruiking events for both 21st Century and Market First based on its massive database. A few investors have tried to opt out after signing up in seminars. In March, Liesl Baxter, an investor in the Foscari project, got her $45,000 investment back after an extraordinary personal campaign. She told Fairfax Media: "I think the game plan is to construct a money-making scheme using the integrity that comes from reputable names within the building and legal industries, to gain the consumer's trust and confidence so they part with their money. Meanwhile, the developer has no intention to follow through with the project." Well-placed insiders have explained how, in fact, the spruikers had most – or as many as possible – of the lots through the marketing seminars and, the one-on-one pressuring that follows them.

The growing list of projects have so far failed to produce a single house, much less the helipads, sky lounges, and waterfront lifestyles depicted in brochures and videos used to promote them. The outlandish claims of "lifestyle" precincts and "architectural masterpieces" in the backblocks of Melbourne's outer west are now something of a joke among the property and development industry. Fairfax Media has confirmed from several well-placed sources that at the very time Market First was stepping up pressure on investors to tip money into the Foscari scheme, those behind it were trying to on-sell their own project. In 2014, real estate agents were confidentially commissioned to sell the entire Foscari site. A former Market First insider insists this was always, and still is, the plan: sign up naive punters sold on the idea of a lifestyle project designed by fancy architects. Then, with pre-sales in hand, flip the site to Joe Blow builder/ developer to roll out a standard suburban estate.

Another common link in many of the schemes is law firm Evans Ellis. Trust accounts controlled by the firm were used for the Bendigo project. Evans Ellis also represents undisclosed owners of land via holding companies of projects in Melbourne's west. Partner Ben Skinner claims Hermitage, Foscari and Veneziane were legitimate land subdivision projects "in accordance with standard industry practices." Kaye, Burn and Feldman all failed to return calls. The whereabouts of the money is a key focus for ASIC's investigators grappling with the details of the Bendigo scheme. In an exclusive interview, the regulator's financial enforcement leader, Tim Mullaly, points to a "degree of complexity" around the options agreements and how the money was to be used: "Whether or not the money must be kept on trust and, if so, for how long, or whether that money can be used for other purposes such as the development of the property so it can be subdivided". "At the moment, it is not clear what the obligations are ..." he said. It's not surprising then that Johnson is having sleepless nights. "I lie awake at night thinking. I'm a tradesman. I'm a straight-shooter. I was taught if you do the right thing, good things will happen. I feel taken advantage of."

Just last week, McIntyre's 21st Century wrote again to Johnson urging him to invest in its latest venture, an "exclusive cashflow" property opportunity in the Pilbara. "As long as you have an income in excess of $80,000 (this can be combined) you can potentially secure one of these positively geared properties," says the McIntyre promotion. "It all has to do with the mining boom which by the way has no chance of drying up any time soon." To which Johnson replied: "Are you f------ kidding me?" * Not the investor's real name. Identity withheld at his request NOTE: This article is about Jamie McIntyre and his associates who use the term 21st Century group to describe their various property activities. Fairfax Media accepts assurances that Mr McIntyre's activities are in no way associated with 21st Century Group Pty Ltd (Australian Company Number 108 150 545), a Sydney-based property development company that was registered in 2004. Full details about 21st Century Group Pty Ltd can be accessed at www.21stcenturygroup.com.au.