Former Courtenay House director sentenced over Ponzi scheme
A former director of Courtenay House has been sentenced for his role in the operation of a Ponzi scheme.
Tony Iervasi was sentenced in the Supreme Court of NSW to 11 years’ imprisonment, with a non-parole period of seven years for criminal charges relating to the operation of the Courtenay House Ponzi scheme.
This took into account the total period of offending, of about 6.5 years, the nature and circumstances of the offending – which included sustained deceit, the large number of victims, the total amount of money they deposited, the total net loss to victims of $54 million, and the total amount of dishonestly obtained funds used for the offender’s benefit, of about $12 million.
When handing down the sentence, Justice Sweeney said Iervasi was dishonest on an “egregious scale”, “establishing the veneer of a successful wealth creating business ... which sought to reassure and persuade victims to invest”.
“As well as the loss of life savings and family homes, the harm went beyond financial losses to breakdowns of marriages and family relationships, emotional, physical and mental health issues, and the need to delay retirement or resume working in the face of a loss of financial security in their mature years,” Justice Sweeney said.
The sentence included a significant discount considering his guilty plea and other factors.
Iervasi pleaded guilty to four offences of engaging in dishonest conduct in relation to a financial product or financial service contrary to s1041G Corporations Act 2001 between 13 December 2010 and 21 April 2017, when he was the sole director and shareholder of Courtenay House, which raised around $180 million from around 585 investors.
He also pleaded guilty to an offence of carrying on an unlicensed financial services business contrary to s911A Corporations Act 2001. He admitted his guilt in relation to a further two s1041G offences which were taken into account on sentence.
The Courtenay House companies, based out of Bondi Junction, NSW, represented to investors that their funds would be traded in forex and futures markets when only around 3 per cent on moneys deposited was actually traded. Instead, monthly amounts paid to investors were derived from capital deposited by new investors. This has been referred to, and admitted by Iervasi, as being a Ponzi scheme.
ASIC deputy chair Sarah Court said: “ASIC pursued this matter as part of our commitment to protect investors. Mr Iervasi’s actions betrayed the trust of his clients and inflicted damage on hundreds of people. Today’s sentence demonstrates that such deliberate fraudulent activities will not be tolerated.”
The matter was prosecuted by the Office of the Director of Public Prosecutions (Cth) after an investigation and referral by ASIC.
AUTHOR
Laura Dew
Recommended for you
AZ NGA has entered into a strategic partnership with national advice firm MiQ Private Wealth, as a way to provide a succession solution, as well as career development opportunities for staff.
While the advice profession struggles under growing operating costs, Adviser Ratings has found more than half of practices – some 58 per cent – that generate less than $250,000 in revenue report no profit at all.
The Federal Court has ordered the freezing of assets and the appointment of receivers to two entities linked to Australian Fiduciaries, ASIC’s latest move in an ongoing investigation into the company’s managed investment schemes.
Off the back of the August adviser exam results, the profession has seen 17 new entrants hit the Financial Adviser Register (FAR) this week, helping numbers return to positive territory.
