Fraudster Philip Whitley liquidates tiny house company after taking client's life savings
A convicted conman who orchestrated a multi million-dollar fraud changed his name and took thousands of dollars from tiny house clients before putting the company into voluntary liquidation.
Philip James Whitley, now known as Philip James Dale, was shareholder of Duro while his wife was director. The company was launched last year to build tiny houses and trailers to carry them.
Tiny houses have become increasingly popular as a more sustainable and affordable alternative to traditional housing.
Although Philip allegedly told clients their tiny house builds were progressing and business was booming, the company has left several people tens of thousands of dollars out of pocket with little or nothing to show for it.
Philip was imprisoned for five years in 2010 after defrauding 490 investors of more than $5 million on the basis that he had invented computer software technology that could make him "richer than Bill Gates", co-founder of Microsoft.
Before his arrest in 2007, Philip had his own bodyguards, owned two black 300C Chryslers, was bankrolling Richmond Athletic Football Club and bought a $2m mansion in Redwood Valley, near Nelson.
Philip said after being convicted that he had a bi-polar condition and had exaggerated things. After leaving prison he remarried and took his new wife's last name.
Philip was removed as a shareholder on March 21, a little over two weeks before the company filed for liquidation. They were trading for about eight months and it is understood that they had taken about $500,000 worth of sales.
Liquidator Brenton Hunt, of Waterstone Insolvency, said it looked as though Duro owed creditors about $100,000.
However, the first liquidator's report doesn't name any of the creditors who spoke to Stuff.
"Our focus at the moment is we're seeking expressions of interest from someone who wants to buy [the company] as a going concern," Hunt said.
Philip could not be reached for comment.
The Serious Fraud Office said it's been alerted to the matter, but could not comment further.
LIFE SAVINGS GONE
Helen Armstrong, 26, said she invested her life savings - more than $33,000 - with Duro and wasn't "overly hopeful" that she'd ever see the money again.
The South Auckland-based early childhood education consultant signed a contract with the company in January.
She dealt directly with Philip, who she described as "charming". She was told her tiny house would be ready by March 31.
Philip told her he would email through photos showing how the house was progressing, but Armstrong said he always made excuses for why the build was held up.
"He was totally leading me on and trying to keep me happy until this point."
Philip kept in regular contact and two weeks before the company filed for liquidation he told Armstrong "how well the business was doing".
She said he recently told her he had hired a specialised joiner to work on the kitchen in her tiny house. As far as Armstrong knows, her tiny house and trailer don't exist.
"I guess I'm looking back and kicking myself that I trusted him. He was cunning and he was very charming. I look at it now and I think that it was all a huge deception. I think he really took advantage of me," she said.
"He comes across as a pathological liar, basically. He can't keep up with his own lies."
Armstrong said Philip once told her he had served in the military for 20 years and that he and his family were under surveillance after the 9/11 terrorist attack on the World Trade Centre.
She said he also told her he was once a youth pastor and an engineer. Based on the stories told to other creditors, Armstrong said there were about "70 years worth of different lives that this guy supposedly lived".
"Now we've discovered his past name and past convictions and stuff it's all making sense now."
Armstrong said "I refuse to believe" that the voluntary liquidation was a simple case of the company going under.
"[Philip's] told me all along that he's had thousands of clients and can't keep up with the demand."
Armstrong said she has filed a complaint with police and supplied them with all of her paperwork.
A 'FANTASY WORLD'
Another customer said they ordered a trailer at the end of January but there were constant delays and excuses.
"It was such a shock that Phil was taking money right to the end of March.
"He was chasing invoices. The amount of lies that he has spun - he lives in a fantasy world."
The woman eventually got her trailer but it was the wrong size and specifications and she would need to pay extra to have it fixed.
Daniel Roh, 27, hoped that a tiny house could mean a foot on the property ladder for him and his young family.
The architecture graduate started looking for companies that would do the basics of his design. The only one he could find was Duro Ltd.
Duro started the build in December and Roh paid $9000 and then another $6900 for the frame of the house.
"Through that process it looked OK. But things were very slow with how they progressed. He didn't seem to know any of the details I was talking about."
All up Roh paid $40,000. He was going to do the interior of the house himself.
The final payment he made was on March 28 - a week before Duro Ltd went into liquidation.
"I and my wife were dreaming about it so much. Everyday we were going out and checking out products. We were full of enthusiasm. It was going to be our first home."
He hoped that he could get the trailer and the frame back but said it would only be half finished and did not expect to recover any other money.
Kasia and Jake Walker were Duro's first clients and one of the few to receive their tiny house.
During the build process, Kasia became a rep for the company. It was her job to bring in more business.
"The first few customers received their goods and were happy, so everything was seeming great," she said.
"It was a dream job helping people into affordable housing."
But then Philip's stories started becoming more far-fetched and he was making promises he couldn't keep, she said.
The Walkers' tiny house was months overdue and Kasia said Philip put them up in a hotel to compensate.
Kasia said their tiny house had several issues, including leaky plumbing, not enough solar panels to power appliances, and a faulty inverter and water pump.
During a visit to the Kaiapoi factory, Kasia said she realised that many of the tiny house builds were behind schedule.
She said Philip wanted to change her employment contract without paying her what she was owed, so she quit her job.
Kasia said she was "completely devastated" when she heard that Duro was liquidating.
"I'm heartbroken for my past customers who have their home stuck with liquidators. How could a man who had been previously convicted of fraud be allowed to run a business again?"