Henry Kaye leaving the Magistrates Court in 2007

Henry Kaye leaving the Magistrates Court in 2007 Photo: Penny Stephens

A massive land banking scam linked to notorious property spruiker Henry Kaye is in tatters after the corporate regulator moved to wind up housing projects in Melbourne's outer west and Bendigo.

In a statement issued on Friday afternoon, ASIC said it was concerned the companies behind the two schemes were insolvent and that investors who had bought lots or options may have been mislead.

The two projects – among about 10 such schemes in Victoria and Queensland – are known as Foscari in Wyndham and Hermitage in Bendigo.

The ASIC statement noted that Foscari and Hermitage projects were not close to completion and "appear to be incapable of completion due to the financial position of the development companies".

The focus of a Fairfax investigation early this year, the Foscari project had been spruiked as an "iconic, architectural masterpiece" by shady marketing firm Market First. But years after it was flogged in manipulative and misleading seminars it remains a disused rubbish dump in Palmers Road, Truganina.

In March, Fairfax Media revealed that ASIC was investigating a string of projects linked to Kaye and or his sister, Julia Feldman. The inquiry followed Fairfax revelations in January about Foscari and a second Melbourne project, Veneziane in Melton.

Mum and dad investors have sunk as much as $100 million in schemes across Victoria and Queensland since 2010, buying lots and options on undeveloped farmland, supposedly earmarked for luxury development.

The regulator's action against the Foscari scheme will be troubling for high profile law firm Slater & Gordon.

In January, Fairfax revealed that the scheme's promoter, Market First, had recommended Slater & Gordon as legal representative to customers buying into projects in the two schemes in outer Melbourne.

Slater & Gordon later withdrew after an internal probe raised concerns about the secrecy around the individuals behind the schemes, and had warned investors that they may have overpaid and been misled.

On Friday, ASIC highlighted its concern that lawyers recommended by scheme promoters were "not independent enough to provide the best advice".

The Belarus-born Henry Kaye headed 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, and in 2010 was barred from managing companies for five years.

In its statement ASIC expressed concern that money invested in the schemes in Truganina and Bendigo could have been used for any purpose whatsoever, not just for development.

It has begun Federal Court action to liquidate Bilkurra Investments Pty Ltd and Foscari Holdings Pty Ltd.

It has also taken action against Project Management (Aust) Pty Ltd and its head, Kaye associate Michael Grochowski, who has been a key player in many of the banking schemes across Victoria.

The proceedings are the latest action by ASIC in its investigation into land banking, in which small and often inexperience investors have been lured into buying options on undeveloped land, often by notorious spruikers Jamie McIntyre and Rowan Burn,.

As part of the wider probe, ASIC in August moved against companies linked to McIntyre's 21st Century Group and five land banking schemes. In October, the Federal Court made orders appointing provisional liquidators to the companies which operated the McIntyre schemes.

Earlier this month, the court also made wind-up orders for failed land banking company Midland Hwy, another McIntyre-promoted scheme managed by Grochowski.