ZIASUN'S JACK FLADER UNDER INVESTIGATION IN AUSTRALIA
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Canadian at centre of fraud probe Down Under
montrealgazette.com
Millions in savings missing
By Randy Boswell, Postmedia News July 16, 2010
A 35-year-old Canadian man is at the centre of a financial storm in Australia, where more than $110 million -- the pension savings of about 10,000 people, including 250 low-wage racecourse workers -- has gone missing and sparked a sensational public inquiry.
Shawn Richard is described in Australian news reports as a handsome, "clean-cut" Canadian fund manager who is also a "baseball freak" and a super-wealthy, "highly social" party animal nicknamed "Shawny Cash" by his Facebook friends.
But Richard -- apparently a New Brunswick native who has worked in Taiwan and Australia since the late 1990s -- has now come under intense scrutiny from Australia's top financial regulators as frontman of the recently suspended Astarra Strategic investment fund.
Along with its parent company Trio Capital, Astarra had seemingly defied all odds during the recent global financial crisis and reported major gains for its clients while other investment funds were suffering the effects of the meltdown.
But last fall, after suspicions emerged that Astarra was operating as part of a complex Ponzi-like investment scheme with funds shuffling among accounts in several countries, the Australian Securities and Investments Commission and Australian Prudential Regulation Authority jointly announced they were shutting down Trio and Astarra.
The agencies cited "numerous breaches" of investment fund licence conditions and Trio's "not being able to satisfy APRA's concerns regarding the valuation of superannuation assets."
Along with the $110 million in Astarra funds unaccounted for, about $400 million in investments under Trio's umbrella were frozen by the agencies' order.
Australian authorities also have reportedly launched investigations into the activities of Richard, his American business partner Eugene Liu, and their corporate overseer -- a mysterious Hong Kong businessman named Jack Flader.
Under questioning during a liquidation hearing held in a New South Wales court this week, Richard admitted that he had lied to clients and Australian licensing authorities about having a finance degree from the University of Moncton, and testified that he was little more than an "office boy" for Flader -- alleged mastermind of what is now suspected to be Australia's biggest pension fraud.
The story of Astarra's dramatic fall from investment darling to dud, tracked closely for months by the Sydney Morning Herald and other major Australian media, has the added intrigue of a murder -- the killing of Richard's first boss and Flader's predecessor, Matthew Littauer, in Tokyo in 2004.
Richard, according to various Australian news reports, repeatedly stated during the hearing that while nominally in charge of Astarra, he was always following the orders of the two men he worked for.
The Canadian man has not been charged with any crime and has reportedly agreed to assist investigators in recovering as much of the vanished $110 million as possible.
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