Trio Capital manager faces jail after guilty plea
A MAN who raked off $6.4 million in cash in Australia's largest superannuation fraud faces up to 10 years' jail after he pleaded guilty to two charges of dishonest conduct yesterday.
A MAN who raked off $6.4 million in cash in Australia's largest superannuation fraud faces up to 10 years' jail after he pleaded guilty to two charges of dishonest conduct yesterday.Shawn Richard, 35, who was the investment manager of Trio Capital, faces an additional life ban from the financial services industry for his part in a fraud that led to more than $100 million being siphoned overseas.The guilty plea by Richard in Downing Centre Local Court marks the first scalp for the Australian Securities and Investments Commission since it froze $426 million in the Albury-based Trio in January.Richard, who was known to his Facebook friends as Shawny Cash, was a central figure in a debacle that has led to more than 10,000 investors facing massive uncertainty about their $300 million in superannuation investments.The guilty plea also marks ASIC's first formal recognition of the fraud perpetrated on Trio Capital investors by documenting the worthlessness of the overseas investments Richard placed through a hedge fund called Astarra Strategic. More than $100 million placed into Astarra Strategic has never been recovered.Richard pleaded guilty to a charge that he dishonestly received undisclosed payments in his role as the investment manager of Astarra Strategic. ASIC alleged Richard and his company received $6.4 million.He also pleaded guilty to making misleading statements about the value of the investments in Astarra Strategic, with the effect of encouraging further investments.Both offences carry jail terms of up to five years, and fines of $220,000, or both. Richard will be sentenced next year. He admitted a third charge of making false statements in relation to financial products.A separate enforceable undertaking with ASIC that bans Richard from any role in financial services detailed his role in sending money through Astarra Strategic to overseas companies controlled by a Hong Kong businessman, Jack Flader.ASIC outlined how investors' money was placed into five Flader-controlled overseas funds. The money was then swappedfor virtually worthless US shares Mr Flader owned. Much of the "profits" were then returned to Mr Flader's Australian businesses as "loans"."Richard knew, from at least April 10, 2007, that the statements he made about the value of the Flader controlled funds that were included in valuation statements to Trio, were materially misleading," ASIC said in its enforceable undertaking.
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