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FIND MANNINGHAM | OCTOBER 2021
www.findmanningham.com.au
Be Wary of Property Spruikers and Fake SMSF Advisers ACCOUNTANT By Warren Strybosch
If you have anything to do with a SMSF you, like me, are seeing a proliferation of Facebook ads promoting the use of a SMSF to purchase your home. These ads are misleading as you cannot purchase your home which implies the house you live in. You are not allowed to purchase assets that you will personally use or gain benefit from directly or indirectly. ASIC is also getting tired of property spruikers who are targeting individuals to set up SMSF for the sole purpose of investing in property investments and developments. As an example, the corporate regulator, back in August, commenced Federal Court proceedings alleging a property development company provided unlicensed advice around SMSFs. In a statement, ASIC said it had issued Federal Court proceedings alleging the Property group operated an unregistered managed investment scheme and provided unlicensed financial advice to consumers.
Recently, a Victorian man who posed as an adviser and stole more than $2.7 million in life savings from relatives and associates through SMSF rollovers has been sentenced to eight years in jail. The advisor was sentenced to eight years and four months in jail. Court documents reveal the fake advisor had used SMSFs as the primary vehicle in conducting several superannuation rollovers, which were set up to defraud victims. Once having access to the client’s funds, he took those funds and used them for his own personal use. He would then invite others to set up similar SMSFs, and use their money to pay back ‘dividends’ to the previous investors to make it look like they were getting a return. It was another classic “Ponzi Scheme” built around SMSF investors. In victim impact statements, it was revealed the fake advisors actions had inflicted mental, emotional and physical harm, with most victims and their families were left in a position worse than ever before financially. In the judgement, Justice Trapnell said the level of dishonesty that was shown towards close family members and others was “nothing short of breathtaking”.
The action follows the regulator obtaining asset freezing orders against the directors of the property group.
“Your crimes were sophisticated, well planned and executed and involved sustained fraudulent conduct on your part. While there was an element of ‘robbing Peter to pay Paul’, your motive for committing these crimes was also to support your lifestyle,” Justice Trapnell said.
"ASIC alleges that between at least 1 March 2017 and 16 December 2020, [the directors] encouraged around 300 investors to establish SMSFs and invest in property investments and developments…," ASIC said.
“The funds you defrauded were very quickly dissipated, and there is no evidence, on the agreed facts, that, in most cases, you ever intended to ever reimburse or otherwise compensate your victims.
"ASIC is seeking winding up and disqualification orders and the appointment of liquidators and receivers to secure assets of the alleged scheme."
“While it is true some of your victims were not unsophisticated in matters of business and investment, they were nevertheless easy prey to your appallingly dishonest conduct. Some of your other victims were quite vulnerable.
This property group is now permanently closed for business. Regarding financial advisors, it is important to make sure that they are licensed and have the appropriate qualifications.
“They have all suffered greatly as a result of your depravations, some losing their life savings. The serious breach of trust you owed to your family members and clients is a significant
