HK-based trader `kingpin' of A$118m swindle
Wednesday, January 05, 2011
A Hong Kong-based trader has been linked with a multimillion-dollar Australian pensions fraud.
American-born Jack Flader, 48, is allegedly the mastermind behind Australia's largest superannuation swindle, in which A$118 million (HK$922.9 million) vanished into a Caribbean tax haven, according to the Sydney Morning Herald. Flader is also under investigation in Hong Kong, it said.
The allegation comes after the paper's investigation of company documents of failed erectile dysfunction company Advanced Medical Institute. Controversial medical entrepreneur Jacov "Jack" Vaisman placed AMI into administration last month, just before the paper said it was about to expose the company's dubious practices.
In the shadows controlling a 50 percent interest in AMI - whose products promoted "longer lasting sex" and for years was the subject of complaints for unethical medical practices and predatory tactics - was a network of unscrupulous financial engineers responsible for the pensions theft, the paper said, with the ultimate controller being Flader.
Flader is alleged to be behind the collapsed Astarra Strategic Fund, part of the Trio Capital group based in the New South Wales town of Albury. Trio Capital, through financial planning networks fed by kickbacks, encouraged Australian investors to put their savings in Astarra. The money was then funneled through Hong Kong to a British Virgin Islands company associated with Flader. There the trail goes cold, the Herald said. For a
year Australian investigators have been hunting for the missing A$118 million without success.
Just before Christmas, Flader's sidekick Shawn Richard, who had raked off A$6.4 million in payments from the Trio Capital scam, pleaded guilty in a Sydney court to two charges of dishonest conduct. Canadian-born Richard, 35, faces 10 years in jail. In court, he gave evidence that he was merely the puppet for the alleged mastermind, Flader.
Flader last month issued a statement to Australian media claiming to have been the victim of false statements by Richard. Flader - reportedly responsible for investing Astarra funds offshore from Hong Kong - issued documents he claims confirm that allegations made against him are without substance.
He also claimed he had been restricted from addressing the allegations by the secrecy provisions of Hong Kong's Securities and Futures Ordinance.
AMI boss Vaisman faces prosecution by the consumer watchdog for "unconscionable conduct," the paper said.
The Herald said Flader's first run-in with regulators came to light when Britain's Financial Services Authority exposed Pacific Continental Securities, to which he was closely linked, as a "boiler room" operation whose share dealers engaged in cold calling unsuspecting retail investors to sell overpriced and worthless company floats. |
