This is not a scam or a Thai cheat or thief as in most cases .... it's a developer that went bust, which happens in Australia, UK and everywhere.
The legal process being usually forces the liquidated company to sell all assets to retrieve the customers deposits and payments made. However, the problem being, as in Australia and everywhere, the directors transfer assets, funds, anything of value over to relatives, in-laws or whoever to avoid repossession.
I am sure the Australians are aware of this ....
Just look at Australia's Kingsgate Mines ..... they lost millions because of Thailand's antiquated justice system.
Thailand's legal system won't work as it does in the west, I doubt the directors will spend one night in jail if no assets or funds are recovered.
I've seen it, I've been in the thai courts, I know what they are like. The legal system here is dubious to say the least.
I would guess their 5 million is gone and not coming back.