The ‘biggest monkey’ WhatsApp texts that led to Fuoco’s conviction

Joshua Fuoco described himself as the “biggest monkey” at AFSL Group and provided financial advice via WhatsApp messages, all while being banned for 10 years, according to court documents.

Fuoco was sentenced on 2 July by the Federal Court to 12 months’ imprisonment to be suspended for two years after being found guilty of 18 charges of contempt of court. In addition to the sentencing, Fuoco will never be allowed to be involved in financial services or credit activities, following an undertaking he gave to the court. 

This was enforced after he knowingly contravened orders made in 2018 banning him from conducting or being involved in a financial services business for 10 years for engaging in misleading and deceptive conduct while he was a director of advice licensee Wealth and Risk Management, Yes FP, and Jeca Holdings. 

In his judgment, Justice Horan detailed how Fuoco was involved in five financial service businesses which generated over $2.2 million in income – $2 million in commission from the advice business, and $223,000 income from the loan business. 

Both advice and loan businesses operated from Fuoco’s family home.

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“There were multiple withdrawals of money by Mr Fuoco and his family from bank accounts held by State Advice, AFSL Group and Ansa Finance, including around $400,000 for personal expenses such as restaurants, private school fees and holidays,” the judge said.

The companies were:

• State Advice  
• Ansa Finance  
• AFSL Group 
• About Advice 
• Advice Now 

During the relevant period, Fuoco had overall control of the businesses, was involved in the process of providing financial advice, including arranging appointments and communicating with clients and staff about clients’ individual circumstances, the financial advice to be given, and the financial products that were available.

He also instructed and trained staff and held regular strategy sessions. Staff reported to him about the status of client files, the achievement of targets, and the payment of commissions by insurers. 

While there were 18 charges overall, ASIC drew the court’s attention to Charge 9 which was based on specific evidence of a WhatsApp message that was sent by Fuoco to staff at AFSL Group on 31 January 2022. 

The WhatsApp message detailed “a reminder of who’s who in the zoo (with me the biggest monkey of course)” to staff at the firm.

This demonstrated he was aware he was the superior at the firm and was knowingly carrying out financial services in defiance of his ban, ASIC said.

This was not the only instance of WhatsApp messages leading to Fuoco’s downfall as ASIC detailed two further charges where he sent messages to financial advisers within AFSL Group to discuss particular clients or products.

“The particulars to these charges relate to WhatsApp or text messages that were sent by Mr Fuoco to various financial advisers at AFSL Group, in which he directed the advisers as to financial product advice that should be provided to particular clients or to clients generally, discussed the advice that was to be given to particular clients, or directed the advisers to obtain information in relation to clients which was relevant to the financial product advice provided to them.”

“ASIC drew particular attention to Charge 15, by which Mr Fuoco was personally involved in the provision of financial product advice by exchanging WhatsApp messages with a financial adviser in which he disagreed with the advice that was proposed to be given to a client, following which Mr Fuoco arranged for a different financial adviser to provide contrary advice to the client.” 

The regulator said this was a “particularly egregious example” of Fuoco having “descended to a level of engagement with individual clients that was at the heart of what the restraint order was designed to prevent [him] from doing: being in any way involved in the provision of financial services to clients”.

‘Targeted exploitation’

Separately to whether Fuoco should have been providing advice in the first place, ASIC submitted that his business model of the five new firms involved the “targeted exploitation of financially vulnerable individuals through unfair and unconscionable marketing practices”. 

The fact he was continuing to operate a model in this way, having already been banned for a similar practice in 2018, was “far from accidental”. 

A large number of his customers were individuals who were “desperate for a loan” from Ansa Finance, but who were then funnelled into obtaining financial advice through State Advice, AFSL Group or About Advice, and taking out insurance. 

The result of this was substantial advice fees and insurance premiums which were typically deducted from their superannuation. Clients typically agreed to take out insurance only because they were told it would increase their chances of obtaining a loan.

“The evidence adduced by ASIC contained examples of the impacts on particular clients of the advice business and the loan business. Those examples illustrate the pressure that was placed on individual clients to roll over their superannuation and to take out insurance in order to obtain a loan. There is also evidence of a financial adviser who worked for State Advice and AFSL Group having become concerned that the advice he was giving was not in the best interests of his clients.”

This model closely resembles that to when he was working at Wealth and Risk Management, Yes FP, and Jeca Holdings which had offered “fast cash” to clients with poor credit histories, who were required to receive and implement financial advice that recommended switching superannuation and taking out “high-end” insurance policies.