Investors watch $680,000 go down the drain
It is highly unlikely that 37 investors who lost approximately $680,000 in a Gold Coast-based investment scam will ever recover their money, according to the Australian Securities and Investments Commission (ASIC).
The financial services regulator has discovered an unlicensed financial services business on the Gold Coast, which allegedly used cold calling and a website to induce investors to deposit funds into a number of bank accounts with the promise that the funds would be used to buy shares and generate returns well above markets.
ASIC further alleged operators of the scam - Lea O'Donnel, Russel Lewis and John Pritcher - withdrew $680,000 of $790,000 deposited in total.
"[The money] was withdrawn in cash, meaning it is likely the funds may not be recovered," ASIC stated.
The regulator had obtained court orders against operators of the scam, preventing them from carrying on any financial services business in Australia without a licence, while their companies - West Trade Group, West Trade Cars and West Two - are wound up.
The remaining $110,000 in the company bank accounts are to be frozen, ASIC had announced.
In the meantime, ASIC and state and territory police services have urged consumers to be alert to investment fraud, having seen an increase in cold-calling activity across Australia.
Recommended for you
Melbourne advice firm Hewison Private Wealth has marked four decades of service after making its start in 1985 as a “truly independent advice business” in a largely product-led market.
HLB Mann Judd Perth has announced its acquisition of a WA business advisory firm, growing its presence in the region, along with 10 appointments across the firm’s national network.
Unregistered managed investment scheme operator Chris Marco has been sentenced after being found guilty of 43 fraud charges, receiving the highest sentence imposed by an Australian court regarding an ASIC criminal investigation.
ASIC has cancelled the AFSL of Sydney-based Arrumar Private after it failed to comply with the conditions of its licence.
