An Adelaide accountant and financial planner has pleaded guilty to a fraudulent scheme that fleeced investors out of about A$1m.
George John Nowak, director of EJ Property Developments, formerly Charterhill, faced the District Court where it was alleged he used the money to prop up his business and pay personal expenses including his own house mortgage, credit card debts and travel expenses.
"Charges laid against Nowak concern the misappropriation of A$1.2m in SMSF monies by not holding those funds in a designated account and by not applying those funds towards the intended property purchase," ASIC said.
In essence, the defendant deceived people into thinking that their deposit money would be held in a trust account, safe and secure and available when needed"
He has pleaded guilty to 17 counts of aggravated deception and one count of dishonest dealings with documents.
"In essence, the defendant deceived people into thinking that their deposit money would be held in a trust account, safe and secure and available when needed," commonwealth prosecutor Heath Barclay QC told the court.
"In truth, on the prosecution case, the money wasn't safe and was used effectively as general revenue.
"The money, on the prosecution case, was applied to whatever the defendant wanted."
Charterhill group operated as a 'one stop shop', providing advice to clients on the establishment of SMSFs, rollover of existing superannuation funds into an SMSF, sourcing and purchase of investment properties, property management, insurance and taxation.
The group of companies he was associated with has gone into liquidation with debts of more than A$15m.
ASIC announced in February 2014 it had made an application to the Federal Court in Adelaide, which froze all assets owned or otherwise held by Nowak, and his wife, Betty. Nowak was banned from providing financial services by ASIC in March 2015 after the collapse of the Charterhill Group.
The charge of dishonest dealings with documents carries a maximum penalty of 10 years, while the charges of aggravated deception each carry a maximum penalty of 15 years.