Michael Chalmers and Aaron Thomas say they are forced to pay too much for their rooms in a squalid boarding house.


Michael Chalmers and Aaron Thomas say they are forced to pay too much for their rooms in a squalid boarding house. Photo: Simon O'Dwyer
Tom Reilly
June 14, 2009

SLUMLORD John Pisani has two simple rules when it comes to business: be discreet and never let anything get in the way of making a profit — rules that have made him a very rich man.

Pisani and his three partners — all convicted criminals, three of them for sexual offences — are pocketing about $100,000 profit a week by controlling Melbourne's private rooming house market, a shadowy world where some of society's most vulnerable members are forced to pay exorbitant prices, often in cash, for squalid accommodation or face life on the streets.

The four — Pisani, George Maatouk, Arthur "Arty" Oshan and Joe Tomarchio — control at least 220 homes across the city from Frankston to St Albans via a long list of companies, most of which are not registered in their names.

Many of the properties are little more than slums, with toilets that don't work, cockroach infestations and bathrooms and kitchens shared by up to 12 people. It is believed that many premises operated by the men may be in breach of government residential, health and building regulations, especially in regard to fire safety.

In some cases, The Sunday Age has been told, tenants have been threatened with violence for complaining about the poor standard of accommodation, which typically costs $175 a week for a single room, $250 for a room with a double bed, and $30 a week extra per child.

One resident, Richard, who preferred not to give his surname, said that when he threatened to take his grievances to the Victorian Civil and Administrative Tribunal he was warned by one of Pisani's managers, who gave his name as Frank Bell: "Keep complaining and you'll be found dead in the gutter."

With unemployment rising, the cost of rental accommodation soaring and the waiting time for State Government-run public housing stretching into years, the rooms provided by Pisani and his partners are often the only option for the impoverished jobless.

The Sunday Age overheard a conversation between a real estate agent and Maatouk in which he boasted: "The demand is huge, it's insane, especially with a lot of people losing jobs. Families are being forced out and losing their homes or they can't afford to pay rent."

Mark O'Brien, chief executive of the Tenants Union Victoria, said the men were exploiting other people's misery: "These guys have worked out exactly what is the highest rent they can charge people which leaves them just enough to survive if they're on benefits.

"They know that with so little public housing and with these people … unable to get access (to) the private rental market that their residents will have to pay up or live on the streets."

State Housing Minister Richard Wynne has told The Sunday Age that the Government — which handed responsibility for rooming houses to local councils in December — is considering setting minimum standards for shared accommodation.

By law, rooming house proprietors are required to register any property with four or more tenants with their local council. However, charities and advocacy groups say many don't register and there need to be stronger penalties for those who fail to do so, stricter guidelines on standards in homes, and licences for those managing such premises.

Pisani and his colleagues, who met while working at McDonald's in the early 1990s, run their business on a simple model: they lease cheap, low-end properties and then rent rooms to those unable to acquire better accommodation because they cannot afford a bond, have no references or are unemployed or on benefits.

Like most businesses with multimillion-dollar turnovers, Pisani's group is well structured. The Sunday Age understands that Pisani is in overall charge while Oshan handles all VCAT issues, Maatouk the properties in the south-east and Tomarchio the upkeep of homes. They also employ about 10 managers, a bookkeeper, driver and maintenance man, all of whom work out of a two-storey office in a Thomastown industrial estate.

Taxpayers are funding the vast majority of the group's income. About 50 per cent of the residents have their rent directly debited from their CentreLink payments, while the State Government — through welfare agencies — purchases short-term emergency accommodation from the men, and other tenants pay their rent in cash from their benefits.

The Sunday Age met a family of four renting a converted garage in Pascoe Vale for $300 a week. To use the toilet or kitchen they had to cross the yard to share facilities with six others.

Such rents are typical for properties run by Northern Suburbs Accommodation and the Victorian Accommodation Centre , the two biggest companies the men control.

One of Pisani's former employees, speaking on condition of anonymity, said: "John, Joe, Arty and George couldn't give a damn what happens in their houses as long as they're getting their cash and they expect to have $500 a week profit from each property.

"By charging (residents) so much they guarantee they make a huge profit in the short term, while also making sure that (the residents) will never be able to save up for a deposit to move out in the future. These people get trapped in a horrible cycle."

But the cost of rent is often the least of tenants' worries. Numerous residents spoke of the standover tactics used by Pisani's managers and the poor standard of accommodation they are forced to endure.

"I wouldn't wish staying in one of their properties on my worst enemy," explains single mother Kellie Moorcroft, 31, who was forced to turn to the Victorian Accommodation Centre when the rental on apartments became unaffordable.

For two of the 11 months she lived in one of Pisani's properties in Reservoir, the home's one toilet — shared by up to eight people — would not flush. But her biggest concern was the constant revolving door of tenants, which included drug addicts, alcoholics and criminals.

She said: "One couple took a room and after a few days the wife, while drunk, told me that the husband had been convicted for abusing their three children.

"I was terrified, a nervous wreck. It was no place to bring up a four-year-old girl."

Ms Moorcroft refused to let the husband back in the house and claims that when she told managers, they rehoused him in a nearby property without warning parents in that home.

After leaving the house last September, Ms Moorcroft took the Pisani group to VCAT where she was awarded $998 for overcharged rent and compensation for the toilet which didn't work. Four months after the settlement, she has not received her money.

But while the group may not respect the orders of VCAT, they allegedly threaten residents with the tribunal. Michael Chalmers, 20, arranged to pay his rent in cash on a Thursday. When his house manager failed to turn up, he thought little of it until a notice of eviction was served on him the following day, citing a week's unpaid rent.

"They let me stay when I complained but it was like they were doing me a favour which is funny given the state of this place," he says, while talking to The Sunday Age in a filthy kitchen overrun by cockroaches. "I wouldn't let a dog stay here."

Like all the homes run by the group, it is in contrast to the luxury property — with swimming pool and sauna — spread over two blocks in Reservoir where Pisani lives with his family.

But Mr Chalmers was lucky; many residents never receive official notices to vacate. In every property visited by The Sunday Age, people spoke of how managers would throw residents' possessions out of their rooms and even on to the street with little or no warning.

And if any tenant needs to be convinced to pay rent or vacate a room, Pisani calls on the services of one of his senior managers — known only as Ron. Former workers have told how Ron, a tall, thick-set man, is used to threaten residents.

They say the building structure of some premises also poses a threat to tenants' safety.

In 2006, two people died in a fire at a Brunswick home run by Northern Suburbs Accommodation. A coroner's inquest, which is still sitting, has heard that a fire escape was obstructed because a communal living room had been converted into a locked bedroom. .

Only a few homes have fire extinguishers or clearly marked fire exits and residents in five properties visited by The Sunday Age said that smoke alarms were not working.

It is understood that Pisani, Maatouk, Oshan and Tomarchio have recently held discussions on how to try to improve their public relations. One tactic was the creation of a "ghost" chief executive who would talk to journalists enquiring about their properties, ensuring their real names were kept out of print. That alias is believed to be Frank Bell, the person Richard says threatened him over the phone about going to VCAT.

When The Sunday Age put this accusation to John Pisani he initially denied that he worked within the rooming house sector. He then admitted that he did occasional work for George Maatouk, but it was "nothing significant".

Maatouk refused to comment on the accusations in this story, saying: "You're going to write what you want anyway, what's the point in speaking to you?"

Arthur Oshan and Joe Tomarchio did not return calls.
Trio gave a different kind of 'shelter'

THE men who provide accommodation to many of Melbourne's most vulnerable people have a history of criminality.

In 2006, John Pisani, Joe Tomarchio and Arthur Oshan pleaded guilty to a series of offences connected to illegal brothels.

Melbourne's County Court heard how the men allegedly lured women, including an under-age girl, to work as prostitutes and sexually assaulted prospective brothel employees.

One 17-year-old victim was taken to an apartment where up to seven men, including Oshan, had sex with her over a number of hours. She was given $160.

After advertising for "topless work" in local papers, they would take the women to a strange location, pressure them into working as prostitutes and tell them to perform "trial massages" on two of them. The prosecution alleged the brothels turned over $5 million in two years.

During the trial, Oshan's lawyer insisted his client was now devoting himself to helping the poor through rooming houses. "Not only does he help in providing housing for people in need … he assists them in getting their life back together," said Steven Shirreffs, SC.

George Maatouk has been convicted of fraud and forgery.