A LONG-RUNNING investigation of a ponzi operation in which more than $30 million in superannuation money was invested has resulted in two of the people involved pleading guilty in court.
Last week's guilty pleas come nearly five years after the Australian Securities and Investments Commission obtained an injunction preventing the operation of the scheme, the Integrity Plus Fund, and securing investors' remaining funds. In mid-2008 the NSW Supreme Court ordered the winding up of the illegal, unregistered managed investments schemes, Integrity Plus Fund, and another related scheme, the Super Save Superannuation Fund. Some $22 million in investors' funds was recovered in Australian and overseas accounts from the two funds.
The liquidator, Barry Taylor of HLB Mann Judd, said in an affidavit in other court proceedings that the Integrity scheme operated between September 2004 and January 2008.
"During this period it accepted approximately $US29,399,627 from investors and paid total 'returns' of $US9,128,821. However the Integrity scheme was a ponzi scheme that is to say the 'returns' were not paid from profits on funds invested, but rather from capital contributed by other investors".
Mr Taylor said the Integrity scheme was administered by PJCB International, which was incorporated in the British West Indies.
Mr Taylor said some investors in the Integrity scheme attended seminars by a company called Future Trading Corporation, which described itself as an "innovative supplier of financial education material". Most of the 270 investors were from Sydney and the southern highlands, and were encouraged to set up self-managed superannuation funds, which then invested in Integrity.
Last week in the Downing Centre Local Court, Brian Wood, of Davistown, and Jimmy Truong, of St Johns Park, pleaded guilty to charges of making false statements to investors. Wood also pleaded guilty to charges of misappropriating investors' funds. In a statement ASIC said that both men had falsely stated to investors that they would earn returns of 4 per cent per month, and that their capital was guaranteed.
Wood and Truong were two of the "beneficial owners" of PJCB International.
ASIC said a third man, Con Koutsoukos, of Wiley Park, had not entered a plea to three charges of making false statements to investors. The matter returns to the District Court later this month.
ASIC has previously said it was assisted in the investigation by the Commodity Futures Trading Commission in the US.