THE front man for Australia's largest superannuation heist, Shawn Richard, has spent his first night in prison.
The long night with the Department of Corrective Services 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 NSW 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 offshore bank accounts in the exotic tax havens of Liechtenstein, in Europe, and Curacao, an island in the Caribbean Sea.
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, including $67,800 spent on rent. In another example, in 2005 Richard received $US800,000 in a bank account in Curacao. The 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 offshore 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 Mr 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 questioned the absence of investment committees, directors and auditors in the case of Trio Capital.
Justice Garling also 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?" Justice Garling said to Mr Payne.
Frequently Asked Questions about this Article…
What was the Trio Capital fraud and how much did investors lose?
The Trio Capital fraud was a large superannuation heist in which investors lost about $180 million. The court found that money was siphoned into complicated offshore funds and secret payments, and the scheme has been likened by Justice Peter Garling to a Ponzi‑style arrangement.
Who is Shawn Richard (aka "Shawny Cash") and what role did he play in the Trio Capital case?
Shawn Richard, nicknamed "Shawny Cash," was the front man and a former investment manager in the Trio Capital operation. He was convicted of two counts of dishonest conduct after receiving around $1.3 million in secret payments directed to offshore accounts and spending hundreds of thousands on personal expenses; his bail was revoked and he is due to be sentenced on August 12.
Were offshore accounts used in the Trio Capital scheme and where were they located?
Yes. The court heard that secret payments were sent to offshore bank accounts in Liechtenstein and Curacao, and that investors' money was routed into complicated offshore funds as part of the scheme.
Did any investors receive government compensation after the Trio Capital collapse?
Some investors did receive government compensation, but only those in funds regulated by the Australian Prudential Regulation Authority (APRA). In the Trio case APRA‑regulated funds received $55 million in compensation, while self‑managed superannuation funds (SMSFs) received nothing — a disparity highlighted by Justice Garling.
How did the court characterise the Trio Capital structure and governance?
Justice Garling criticised the absence of basic governance — noting a lack of investment committees, attentive directors and auditors — and the Crown presented the payments and structures as being raked off from investors into opaque offshore vehicles. He likened the system to a Ponzi‑style arrangement.
What examples of personal misuse of investor money were revealed at the trial?
The court heard several examples: Richard received $250,000 in 2009 that was used for personal expenses (including $67,800 in rent), and in 2005 $US800,000 was deposited into a Curacao bank account. These payments were above his reported annual salary of $113,000.
What legal penalties does Shawn Richard face for his convictions?
Richard was convicted of two counts of dishonest conduct; those counts carry a maximum term of 10 years. His bail was revoked after conviction, he has spent time in custody, and sentencing is scheduled for August 12.
What practical lessons should everyday investors take from the Trio Capital fraud?
Key takeaways are to prioritise transparent governance and independent oversight: check for robust investment committees, independent directors and external auditors; be cautious of opaque offshore structures and unusually complex fund arrangements; and understand whether a fund is APRA‑regulated (which may affect compensation options) or a self‑managed super fund.
Call 1300 880 160
Start a chat
Schedule a call
