From caviar to porridge

THE frontman for Australia's largest superannuation heist, Shawn Richard, has spent his first night in prison.

The long night with Corrective Services NSW marks the final fall from grace for the former investment manager and playboy who dishonestly received $1.3 million in investors' money.

The fall of the man known as ''Shawny Cash'' was witnessed by his one-time business partner, Eugene Liu, and a former Trio director, David Andrews, as they sat in the public gallery in the New South Wales Supreme Court.

Yesterday Richard, 36, was formally convicted of two counts of dishonest conduct for his role in the Trio Capital fraud, in which investors lost $180 million.

Justice Peter Garling revoked Richard's bail and confirmed he would impose a prison sentence on the counts, which carry a maximum term of 10 years. Richard is due to be sentenced on August 12.

Yesterday the court heard Richard had received $1.3 million in secret payments directed to overseas bank accounts in the exotic tax havens of Liechtenstein and Curacao, a tiny Caribbean island.

Richard then splurged

hundreds of thousands on his personal expenses.

In one instance in 2009 Richard received $250,000 in Australian investors' money for his personal expenses.

These payments were on top of his annual salary of $113,000.

The Crown showed Richard's secret payments were raked off from Australians' investments into complicated overseas funds in a system likened by Justice Garling to a Ponzi scheme.

Richard's representative, John Agius, SC, said Richard had been naive, vulnerable and greedy when he had teamed up with a US citizen based in Hong Kong, Jack Flader, who was referred to as a sophisticated fraudster.

Mr Agius tendered a psychological report, arguing Richard had acted under the influence of Flader and was not responsible for the scheme itself.

But Anthony Payne, SC, acting for the Commonwealth Director of Public Prosecutions, said Richard's behaviour showed criminality of the most serious kind.

Justice Garling said he did not understand the principle by which funds regulated by the Australian Prudential Regulation Authority could receive federal government compensation but self-managed superannuation funds could not.

In the case of Trio, the former have received $55 million and the latter have received nothing.

''So the principle is if you are bigger and regulated you get compensation ? if you are smaller and vulnerable you don't?'' he asked Mr Payne.