WARNING TO INVESTORS
Warning concerning John Rossi and Brett Neeson
This is a warning to potential investors considering dealing with John Rossi and Brett Neeson, in Brisbane Australia.
Who this warning concerns
Authorised to draw $600,000. Drew $1.6 million.
All you need to know
Reproduced in full and unaltered. The twenty-six numbered points below are the investors’ own account, published exactly as written.
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John Rossi and Brett Neeson were the company directors of Neuman Lee Group Pty Ltd(“Neuman Lee”).
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John Rossi and Brett Neeson represented themselves as experienced and knowledgeable property developers. Around August 2020, John Rossi and Brett Neeson promoted, on the Australian Investment Network website, a property sub-division in Karalee, Ipswich City, providing an Information Memorandum which outlined the terms of the development, the proposed fees and profit split arrangement. Whilst the initial block of land offered did not proceed, we proceeded with a similar subdivision project on a different block of land in Karalee – 293 Junction Road, Karalee.
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In October 2020 Neuman Lee identified a second block which would be included in the project – 23 Rea Road, Karalee.
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At the time of the investment John Rossi was a licensed real estate agent and Brett Neeson an Associate Member of the Queensland Bar Association.
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Russell Douglas Egan, Russell Thomas Egan and Thomas John Egan (“Egans”) invested $3.1m in this development via investment entities. This investment was the sole investment in the project and was represented by Neuman Lee to be sufficient to conduct this subdivision, as it would be developed in stages using this progressive cash flow instead of debt.
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The Information Memorandum represented that Neuman Lee Group was entitled to $600,000 in management fees for the life of the project.
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In addition to this the Egans secured two important management oversight concessions: firstly, Egans were granted access to the Xero accounting system and secondly, Egans were granted access to the project’s Westpac bank account. Access was cancelled without agreement by Mr Rossi.
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Egans decided to enter into the investment for the following reasons a. the directors were licensed professionals b. Egans had read access of the project’s bank accounts c. there was no debt to be incurred on the project d. the town planning report indicated the project was code assessable and straightforward.
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The process for obtaining development approval of the subdivision encountered many delays and was not obtained until October 2022. During this time Neuman Lee continued taking monthly retainer payments for their management fees without any material progress.
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Neuman Lee took out a development finance loan against the two properties, contrary to the Information Memorandum and without Egans’ consent, and continued to draw management fees using this debt.
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In August 2022 Egans raised concerns with Neuman Lee about the lack of cash in the project accounts and Neuman Lee’s continued drawing of fees for a project which was not progressing. It was evident at this time that their total drawings had already exceeded the $600,000 total project fee.
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Neuman Lee were requested to return access drawings and cease drawing any further management fees in line with the project information memorandum. Neuman Lee refused to stop drawing management fees or refund already drawn management fees.
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In September 2022 Egans commenced legal action against Neuman Lee, John Rossi and Brett Neeson, alleging – amongst other things – equitable fraud by the directors.
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The Neuman Lee directors resisted this litigation at all opportunities, frustrating Egans both within the litigation process and internal shareholder meetings where they refused to answer questions.
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Neuman Lee and its directors throughout the course of litigation used five different law firms, causing delays to the litigation.
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During the litigation, Neuman Lee requested a private mediation at a cost of $5,500 for the day. Egans resisted this request, as they knew there was no reasonable prospect of settling the matter and preferred a decision at trial about Neuman Lee’s conduct. The court ordered that the mediation occur. Brett Neeson did not attend the mediation. During this mediation Neuman Lee did not provide a single settlement proposal. It was another delay tactic.
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The trial was set for hearing in October 2023 where Mr Rossi advised on the day prior to the first day of trial that he had changed lawyers and requested an adjournment which was resisted.
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By the time the claim was set for hearing, Neuman Lee drawings totaled $1.6 million, an excess of $1 million against a project which was only 50% completed and was now insolvent. The remainder of the funds were wasted through the inefficient use of construction finance, consultants and outgoings.
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No physical works on the project site ever commenced by the time the development collapsed.
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The district court granted Mr Rossi an adjournment on the day of the trial and Egans were granted a costs order for the day personally against Mr Rossi.
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Mr Rossi refused to pay this court orderand on 6 March 2024, a sequestration order was made against his estate having the effect of making Mr Rossi bankrupt.
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Egans sought to pursue their claim against Mr Neeson who, on 22 March 2024 presented a debtor’s petition, thereby making himself bankrupt.
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Egans lost $3.1 million due to the conduct that that Egan’s considered to amount to fraud on behalf of John Rossi and Brett Neeson.
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Egans incurred over $250,000 in legal costs pursuing justice in their claim against the parties involved. Egans pursued this claim of equitable fraud to ensure Mr Rossi and Mr Neeson could not defraud other people in the future.
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The Egans are now considering making a criminal complaint regarding the offenders’ conduct.
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The public are warned that John Rossi and Brett Neeson are not to be trusted and should not enter into business transactions with these people.
Supporting documents are available on request
The matters described above are supported by the project’s Information Memorandum, accounting and bank records, the court file, and the bankruptcy records held by the Australian Financial Security Authority.
These are not published here. If you are considering a transaction with either man, or you have had dealings of your own, you can ask to see them.
Checking an investment before you commit
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Queensland planning
Why Queensland Development Approvals Take Longer Than the Timeline Says
Code assessable, impact assessable, and the gap between the statutory clock and the real one. What drives approval delay and how to test a projection.
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Due diligence
Management Fees in Property Syndicates: How They Are Structured and Where They Go Wrong
How syndicate management fees are calculated, why caps matter far more than rates, and what to do when drawings exceed the amount you agreed.
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Due diligence
Property Development Syndicates: How They Work and Where Investors Get Exposed
Development syndicates concentrate risk where the pitch does not show it. Where money is actually lost, and the contractual controls that protect it.
For more information get in touch
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