Former Courtenay House director Tony Iervasi has been 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.
The sentence included a significant discount considering Mr Iervasi’s guilty plea and other factors.
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.’
When handing down the sentence, Justice Sweeney said Mr 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’.
In sentencing Mr Iervasi, Justice Sweeney took into account ‘the total period of offending, of about 6½ 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’.
‘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.
Mr 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 (Cth) 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.
Mr Iervasi also pleaded guilty to an offence of carrying on an unlicensed financial services business contrary to s 911A Corporations Act 2001 (Cth). He also 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 three 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 Mr Iervasi, as a ponzi scheme.
The matter was prosecuted by the Office of the Director of Public Prosecutions (Cth) after an investigation and referral by ASIC.
Background
The Courtenay House companies appointed liquidators on 16 May 2017 ().
On the application of ASIC, the Supreme Court of NSW made interim orders on 1 May 2017 against Tony Iervasi, Courtenay House, Courtenay House Trading Group (and others) by consent.
These orders prevented those parties from carrying on a financial services business in Australia and limited the extent to which they could deal with their cash and other assets. ASIC sought these orders to preserve funds that might be available for the benefit of investors in the Courtenay House companies who had lost money and to prevent these companies from accepting further funds from investors.
The liquidators of Courtenay House Capital Trading have distributed dividends of 28 cents in the dollar. The liquidation process is ongoing.
ASIC’s website has information for consumers on the warning signs of a ponzi scheme and what to do if you suspect a ponzi scheme.
