UPDATE ON JACK FLADER STOCK FRAUD:
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Trio's 'Mr Cash' faces 10 years
Stuart Washington
December 8, 2010
A MAN who raked off $6.4 million from Australia's largest superannuation fraud faces up to 10 years in jail after pleading guilty to two charges of dishonest conduct yesterday.
Shawn Richard, 35, former investment manager of Trio Capital, faces an additional life ban from the financial services industry for his part in a fraud that led to more than $100 million being siphoned overseas.
Richard - known to Facebook friends as ''Shawny Cash'' - was a central figure in a debacle that has left more than 10,000 investors facing massive uncertainty about their $300 million superannuation investments.
Advertisement: Story continues below His guilty plea in a Sydney court is the first scalp for the Australian Securities and Investments Commission since it froze $426 million in the Albury-based Trio in January.
It also marks ASIC's first formal recognition of the fraud perpetrated on Trio Capital investors, by documenting the worthlessness of the offshore investments Richard placed through a hedge fund called Astarra Strategic. More than $100 million placed in Astarra Strategic has never been recovered.
Richard pleaded guilty to a charge that he dishonestly received undisclosed payments in his role as investment manager of Astarra Strategic. ASIC alleged Richard and his company received $6.4 million.
He also pleaded guilty to making misleading statements about the value of the investments in Astarra Strategic, with the effect of encouraging further investments.
Both offences carry jail terms of up to five years, and fines of $220,000, or both. Richard is due to be sentenced next year.
He also admitted a third charge of making false statements in relation to financial products.
A separate enforceable undertaking with ASIC that bans Richard from any role in financial services detailed his role in sending money through Astarra Strategic to overseas companies controlled by a Hong Kong businessman, Jack Flader.
The money was then swapped for virtually worthless US shares owned by Mr Flader, and the ''profits'' returned to Mr Flader's Australian businesses as ''loans''.
ASIC found that Richard had profited from his position without fully disclosing that he acted under the instruction and control of Mr Flader. |
