Lifestyle employees plead guilty and jailed
Two Melbourne men associated with the failed Lifestyle property group have been sentenced to a total of seven years jail after pleading guilty to charges brought by theAustralian Securities and Investments Commission(ASIC), while another former proper authority holder has accepted an enforceable undertaking from the regulator.
Jon McKenney, a former managing director of the Lifestyle property group, was sentenced to four-and-a-half years jail, to serve a minimum of three years, while John Caust, a former employee, received two-and-a-half years jail, to serve a minimum of 18 months.
McKenney and Caust were also each ordered to pay in excess of $5 million reparation to their victims.
McKenney had pleaded guilty to charges including failing to act honestly, making improper use of his position as a director of companies within the Lifestyle group, and making a false or misleading statement in a document lodged with ASIC.
Caust pleaded guilty to seven Corporations Act charges relating to improper and dishonest use of his position as an employee within the company.
The charges for McKenney and Caust relate to their roles in obtaining and using approximately $5,467,000 of investors' funds for property development projects undertaken by the Lifestyle group.
The two men admitted they oversold units in property trusts promoted by the Lifestyle group and that funds received from investors for specific property developments were pooled in central accounts and used for general group expenditure. Creditors of the group are currently owed approximately $24 million.
The charges were brought by ASIC following an investigation into the collapse of the Lifestyle group in 2000, during which a number of accountants and financial planners who promoted Lifestyle group schemes were banned from acting as investment advisers.
Berge Anthony Der Sarkissian, a former proper authority holder, has also come into conflict with ASIC, though he has now had an enforceable undertaking accepted by the regulator.
He has undertaken not to apply to ASIC for an Australian Financial Services Licence or become a representative of such a licence holder for two years.
Der Sarkissian was involved in making 420 applications for Telstra 2 Instalment Receipts using names that may have been contrived between August and October 1999.
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
