Athan Papoulias, former contractor to and promoter of Courtenay House investments, has been sentenced to two years’ imprisonment for his role in a $180 million Ponzi scheme by the unlicensed financial services business.
The Courtenay House companies had represented to investors that their funds would be traded in the Forex and Futures markets when only a small proportion of funds were traded. Instead, monthly amounts were paid to investors from the capital invested by other investors in a Ponzi scheme.
Papoulias pled guilty in January 2023 to one charge of carrying on an unlicensed financial services business between 2 November 2017 and 21 April 2017, reckless about the fact that the business did not have the required licence.
He also pled guilty to one charge of dealing in the proceeds of crime worth $100,000 or more, reckless as to it being derived from the carrying on of an unlicensed financial services business.
During this period, he received commissions to a total amount of $670,860 for promoting investments in Courtenay House.
His sentence would be served by way of an intensive corrections order and 120 hours of community service.
Papoulias was unaware that the funds were used to fuel a Ponzi scheme, though the judge remarked that his actions “undermined public confidence in the regulatory regime of the financial services industry”.
Previously, on the application of ASIC, the Supreme Court of NSW made interim orders in May 2017 against Courtenay House, Courtenay House Trading Group, Papoulis, director Tony Iervasi, and others, which prevented those parties from carrying on a financial services business in Australia and limited the extent to which they could deal with their cash and other assets.
Iervasi was restricted from leaving Australia and in November 2022, he pled guilty to five criminal charges. Four of those charges included engaging in dishonest conduct between 13 December 2010 and 21 April 2017 in relation to $180 million raised by the Courtenay House companies from around 585 investors.
In February 2023, a third individual, David Sipina, was charged with criminal offences relating to alleged misconduct at the Courtenay House group of companies.
Like Papoulias, Sipina was engaged by Courtenay House Capital Trading Group to promote the Courtenay House business but he was not aware of the Ponzi scheme, though their conduct facilitated the continuation of the scheme and that they benefitted from it.
“ASIC has taken civil action to freeze assets, assisted liquidators and is now seeing justice for investors through the criminal court,” said ASIC deputy chair Sarah Court.
“To ensure a fair and strong financial system, and to protect consumers, financial services businesses need to be licenced. Those promoting unlicenced businesses should not assume they are immune from criminal consequences”.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral by ASIC.
