Peter Berlowitz, the founder of HLP Mortgage and related companies in the HLP Group was found to be conducting an unregistered managed investment scheme by the Federal Court two weeks ago. The Australian Securities and Investments Commission publicised the decision on Friday following the issue of orders on Thursday.ASIC's action related to HLP Financial Planning and thirteen related companies but did not, in the end, extend to HLP Mortgage. The latter, a provider of non-conforming loans, folded in early 2007 and is now in liquidation.Fifty-five investors subscribed $4.3 million to HLP companies during 2005 under a private prospectus and intended to be applied to the purchase of loan books. Whether any of the funds were used for this purpose is unclear, but by the end of 2005 HLP was in trouble and by early 2006 Berlowitz was describing the investments as a loan to one of his companies.According to the court's judgement investors are now owed $35 million, liabilities exceed assets by $12 million and there is little prospect of any recovery.While the federal court ruled that the investment scheme was illegal the court declined to issue any injunctions as ASIC wanted, on the grounds that ASIC may bring criminal charges against Berlowitz.