A former director of unlicensed Sydney financial services business, Pegasus Leveraged Options Group, has been jailed for eight years for the theft of $2.1 million from clients.
The sentence imposed on Craig John McKim, of Labrador, Queensland, by the Sydney District Court on Friday October 28, includes a non-parole period of five years, which means he will become eligible for parole on October 19, 2010.
Australian Securities and Investments Commission (ASIC) chair Jeffrey Lucy personally welcomed the sentence imposed on McKim, who has also been banned from being a company director for 30 years.
“This case demonstrates the very serious consequences of anyone fraudulently taking investors’ money for their own use,” Lucy said.
In June this year, McKim pleaded guilty to fraudulently taking funds totalling $2,187,963 from investors in the Pegasus scheme for his own use between July 2000 and March 2001.
He was convicted of seven charges under the Crimes Act 1900, following an investigation by ASIC, which originally wound up Pegasus in April 2002.
These included three counts of funnelling client funds into various gaming accounts, and four counts of falsifying documents to make the Pegasus scheme appear genuine.
ASIC alleged that the funds taken by McKim were withdrawn from an account that Pegasus held with the National Australia Bank, which McKim allegedly deposited into three gaming accounts.
McKim was also convicted of a further two charges brought by ASIC, under the Corporations Act 2001, for inducing six Gold Coast investors to provide him with funds to trade in foreign currency on their behalf.
Six investors provided him with over $135,000, most of which McKim used for gambling and other personal expenses. Investors’ funds totalling more than $107,000 remain outstanding.
He was also convicted of two charges of forgery brought by the Australian Federal Police (AFP) under the Commonwealth Criminal Code Act 1995.
The AFP alleged that McKim used a letter, sent to him by ASIC, to prepare a forged ASIC document stating that his funds had been frozen by ASIC.
McKim sent the document to a Gold Coast business broker to whom he owed payment of a deposit on the purchase of a company so as to delay making the payment.
