The Australian Securities and Investments Commission (ASIC) has announced that former financial adviser and director of Australian financial services licensee (AFSL) CFS Private Wealth, Graeme Miller, has been sentenced to six years’ imprisonment for dishonest conduct, including misappropriating $1.865 million of client funds.
Acting Judge Woods of the Downing Centre District Court described Miller’s conduct as a “Ponzi scheme” which involved a “significant breach of trust” and a “cruel and deceitful betrayal inevitably leading to financial disaster”.
In April 2020, Miller pleaded guilty to six counts of engaging in dishonest conduct and the charges related to 10 of his clients whom he had encouraged to transfer between $50,000 and $950,000 by way of an investment for the benefit of the client. However, Miller misappropriated those funds for his own purposes, with four counts being related to funds he had invested through self-managed superannuation funds (SMSFs) held by his clients, the regulator found.
Of the $1.865 million of client funds that were misappropriated by Miller:
- $987,000 was transferred to bank accounts and credit cards held by Miller and his family members;
- $318,500 was used to pay dividends, interest or return of capital to other clients in relation to their investments with Miller;
- $135,000 was used to pay other personal and business expenses; and
- $27,000 was withdrawn in cash or transferred overseas.
In January 2019, the Federal Court banned Miller from providing financial services for 25 years, and disqualified him from managing corporations for three years.
“As a financial adviser Miller ought to have protected the interests of his clients. His sentencing should send a strong message that such conduct will lead to individuals involved being brought before the court to face criminal charges,” ASIC’s deputy chair, Daniel Crennan QC said.
Miller would be eligible for parole after serving four years.
The Commonwealth Director of Public Prosecutions prosecuted the matter after a referral from ASIC.
