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  4. R v Madhoji - [2016] QDC 171

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R v Madhoji[2016] QDC 171

R v Madhoji[2016] QDC 171

DISTRICT COURT OF QUEENSLAND

CITATION:

R v Madhoji [2016] QDC 171

PARTIES:

THE QUEEN

v

SANDEEP MADHOJI

(defendant)

FILE NO/S:

1516/14

DIVISION:

Criminal

PROCEEDING:

Sentence

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

8 July 2016

DELIVERED AT:

Brisbane

HEARING DATE:

18 and 21 March 2016; 26 and 29 April 2016; 30 June 2016

JUDGE:

Smith DCJA

ORDER:

  1. I find that the losses to a number of the complainants as a result of the fraud counts amounts to $3,251,281.35.
  2. The other factual findings are set out in the judgment.

CATCHWORDS:

CRIMINAL LAW – SENTENCE – CONTESTED SENTENCE – Findings of fact for the purposes of sentence

Evidence Act 1977 (Q) s 132C

Macquarie Bank Ltd v The Two Eagles Pty Ltd [2014] NSWSC 367

R v Lovell [2012] QCA 43

COUNSEL:

Mr M. Connolly for the crown

Mr L. Ackermann for the defence

SOLICITORS:

Office of Director of Public Prosecutions for the Crown

Raniga lawyers for the defence

Introduction

  1. [1]
    This is a contested sentence relating to the defendant Mr Madhoji. The defendant has pleaded guilty to 55 counts of fraud. The counts relate to his time as a part owner and director of Redwood Securities Pty Ltd.
  1. [2]
    The issues are as follows:
  1. (a)
    What the defendant told others his qualifications were and his experience;
  1. (b)
    Whether the procedures and practices engaged in by the defendant were endorsed by others;
  1. (c)
    The way in which transaction were recorded and who compiled them;
  1. (d)
    Whether this was a Ponzi scheme;
  1. (e)
    Whether others acted actively to conceal his dishonesty;
  1. (f)
    The losses suffered by the clients and the benefit received by the defendant.

Background

  1. [3]
    The evidence reveals that Redwood Securities Pty Ltd was incorporated on 17 November 2009 with the defendant being a director of the company. The incorporation of the company came about after negotiations between the defendant and Brook Monahan who controlled a company called Redwood Capital Group Pty Ltd which held an Australian Financial Services licence issued by ASIC and which could carry on business as a financial advisor and funds manager. At the time of these initial discussions the defendant worked for Advestra Capital Markets and was dealing in securities on behalf of clients of that company. It was decided that Redwood Securities would offer investment advice and trade on behalf of clients.
  1. [4]
    A number of clients came across from Advestra Capital Markets with the defendant. The defendant had each of the clients open an account or multiple accounts with Macquarie Bank on which he was given authority to operate. The clients also set up accounts with brokers such as Pension Financial and later with First Prudential Markets (FP) on which the accused could also operate on their behalf. It appears the defendant initially actively traded in securities on behalf of the clients.
  1. [5]
    The first fraudulent transaction occurred in late 2010/early 2011 when the defendant transferred funds from the Macquarie account of Two Eagles Pty Ltd, a company controlled by Mr Monahan’s family, to a number of associated clients. Around 16 February 2011 a client, Michael Sherlock, requested a return of $910,000 from his investments. $910,000 was transferred from Michael Sherlock’s FP account to his Macquarie account on 16 February 2011 and from there to Michael Sherlock’s benefit on the following day. After this time a number of transactions occurred whereby funds were transferred between clients’ accounts and sums were paid out to clients from these transfers. Between September 2011 and July 2012 $977,558.48 was transferred from various clients’ Macquarie accounts to a Westpac Bank account of Redwood Securities and from there used to make distributions to the defendant, Mr Monahan and others and to pay for operating expenses of the company.
  1. [6]
    Also, in the latter part of 2011, the defendant transferred large sums of clients’ funds into accounts with MF Global, both in Australia and in Singapore. In October 2011 MF Global was placed into administration and the funds held by it were frozen. From at least October 2011 the accused used the funds of clients, both existing and newly introduced, to make payments to other clients leading to the scheme and provided investors with false statements of returns generated. He also received some brokerage fees for services not performed which funded primarily the business.
  1. [7]
    By mid-2012 the defendant became difficult for clients to contact and they had difficulty getting information from him.
  1. [8]
    By July 2012 the defendant admitted to Mr Monahan that he had engaged in the activity the subject of the charges. ASIC and the Police became involved and the defendant was arrested. I now turn to the particular evidence given in this case.

Evidence

  1. [9]
    As at 2009/2010 Brooke Monahan operated the Redwood Capital Group. He met the defendant in mid-2009 when the defendant was employed with Advestra Capital Markets (“Advestra”) as a stockbroker. They established Redwood Securities Pty Ltd (“Redwood Securities”) in late 2009. The defendant came across to be the sole stockbroking advisor. It was planned that he would grow the business. The initial clients were clients he brought across from Advestra. The defendant told Mr Monahan he had a Diploma of Financial Planning and a Bachelor of Economics degree with Honours from a Brisbane university.[1]Mr Monahan said that the defendant only provided “wholesale” advice. The reason for this is that wholesale advice requirements were not as extensive under the financial services regulations. It was later discovered the defendant never provided a copy of his degree[2].
  1. [10]
    In terms of his position at Redwood Securities, the defendant was the sole client advisor and placed trades on behalf of the clients. He was a 50% owner of the business. He also had a corporate credit card and received wages. His wages came predominately from profit distributions. The profits came from commissions from trading.
  1. [11]
    In late 2010 Mr Monahan put some money into Redwood Securities though a family trust which his wife controlled. This included a contribution from his wife and father-in-law. It was in excess of $200,000.
  1. [12]
    In respect of compliance, from 2006/2007 Heather Richmond was a fulltime compliance officer. In late 2010 they appointed someone with greater experience as an external compliance consultant, i.e. Jenny Mulders. Mr Monahan claimed to have met with the defendant on a regular basis (minimum weekly meetings). Also, John Sharpe provided significant trading mentoring advice after the first twelve months. The defendant used the support of the broader group for compliance, administration, accounts and trading advice and also employed personal assistants. Kerry Croker became his personal assistant from 2011 and was involved with implementing directives concerning compliance.
  1. [13]
    A monthly performance report was to be sent to clients. In essence, each client had a discretionary account with Macquarie Bank in their own names. The clients were supposed to have received bank statements from Macquarie Bank and their own brokerage statements with respect to trades being placed on their account. In addition, the Redwood Securities performance report, which was to accompany the bank statements and brokerage statements, were put together by the assistants under the instruction of the defendant. The assistants had viewing access to the Macquarie Bank but did not have advisor access. The biggest issue in the formulation of these reports was that it was discovered in an audit by Jenny Mulders that the defendant had more access than the assistants. The assistants could only see cash balances and not the term deposits. The reports were reconciled by the personal assistant for the defendant but the defendant would make it very clear that he was the only one who could see the term deposits[3].
  1. [14]
    The audit concerning the accounts occurred from about March 2012 to May 2012[4]. There had been internal audits prior to that time but the audit in March/May 2012 was an external one. A significant recommendation which came out of the audit was that the defendant was supposed to be providing Macquarie Bank term deposit numbers but these were not independently verified by the assistant, so a request was made for accesses to be changed. There were a multitude of excuses as to why it was not changed and Mr Monahan demanded no further reports in May/June 2012 until all numbers could be independently verified. The defendant had confirmed this would be the position in July 2012. Mr Monahan himself had no authority or access to withdraw funds from the clients’ accounts in Macquarie Bank.
  1. [15]
    John Sharpe had joined Redwood Securities in 2005 and was responsible for reviewing all trading activity.
  1. [16]
    Mr Monahan was of the opinion that the defendant was resistant to anything that was compliance related.
  1. [17]
    On 15 July 2012 the defendant contacted Mr Monahan and they subsequently met on 16 July 2012 in Maleny. The defendant was distraught and upset and told Mr Monahan that he had “screwed me and everybody else and all of his clients over and that he can’t believe it and he wanted to kill himself”.[5]
  1. [18]
    There was a further meeting with members of the defendant’s family at one of their factories in Sumner or Carol Park. It seems that a confession was made. Mr Monahan then telephoned Ms Croker and told her of the confession and asked her to check the previous month to see whether what the defendant was saying was correct. She did check this and she told Mr Monahan that the reconciliations balanced.[6]Mr Monahan contacted the defendant about this who told him “it’s all bullshit mate all the statements are all bullshit, I created them”.[7]Exhibit 1 was an email sent by the defendant to Mr Monahan dated 18 July 2012.
  1. [19]
    Mr Monahan in cross-examination accepted he was involved in the draft document which related to the rebranding of Redwood Securities to Silverwood Securities.[8]He provided some of the information to the authors which inter aliawas complimentary of Mr Madhoji. This document was dated June 2012. He also said that Mr Madhoji contributed to the draft. With respect to a holiday in Fiji, Mr Monahan said that the defendant demanded for them to stay at their villas at the Hilton as he had credit there. He denied requesting accommodation. He said they were there for about eight to ten days. There is an email in this regard, Exhibit 8, dated 5 April 2012. He denies contacting the defendant whilst in Fiji saying he was running out of money and did not instruct him to transfer money from M Investments Pty Ltd[9]. He denied that he instructed the defendant to transfer $40,000 into his personal account from M Investments Pty Ltd and, further, denied instructing him to pay for his expenses at the Hilton[10]. Mr Monahan had his own credit card at the time. He said that he did not receive any cash for the holiday.
  1. [20]
    Mr Monahan said that he put in more than $40,000 by way of start-up capital for the business[11]. Mr Monahan disagreed that there was poor compliance with respect to Redwood Capital and disagreed that training was poor[12]. Redwood Capital held the financial services licence. He said that the fee structures were created in consultation with the defendant. He said that he was not involved in the defendant’s trading for the first 18 months but became more involved after April 2011 when John Sharpe became involved[13]. He said that he did not manage every part of the defendant’s activities. He said that he had access to parts of the file server, i.e. the G drive, but not all folders. He said that there were a lot of documents on the defendant’s personal hard drive. He denied meeting with every new client, but with regard to the clients he did meet he told them to see him if they had any problems. He said that he only spoke to three clients. The bulk of the clients were the defendants. He claimed he did not use any passwords with FP. He said that both he and John Sharpe counselled the defendant. He denied receiving significantly more distributions than the defendant from the business. He was shown Exhibit 9, Ms Bundesen’s addendum forensic accounting report, in which it is alleged that distributions to Mr Monahan, or his entities, totalled $354,534 and distributions to Mr Madhoji totalled $245,000 but he denied that this was an accurate document[14]. He accepted he had a company credit card and accepted that a suit was bought for him on this.[15]He also authorised personal payments to the defendant.[16]He denied being in charge of the clients’ funds or the brokerage fees. He also denied receiving monthly FP reports and he said he did not determine the commissions[17]. He said that in the last six to 12 months after the new system was put in place some charts were provided to him by the defendant[18].
  1. [21]
    He agreed that until early August 2011 he was a director of 35 Ash Street Pty Ltd and P2WD Pty Ltd. He agreed that he asked the defendant to assume directorships in those two companies because he was concerned about an action by the Macquarie Bank and wanted to remove himself as director[19]. He removed himself until the matter was resolved, which it has been. He said it was the defendant who came to him at Maleny. He said the defendant told him his life was in jeopardy and that his grandfather would pay the missing money. Mr Monahan denied asking for $5 million[20]. He said that he met the Raniga family. The defendant said that his family would clear up the mess because clients were threatening him. After he and Sharpe looked over the books of account they determined there was about $3.3 million of loss[21]. He said that every cent could be traced. He denied calling the defendant a “dead man” if he did not come up with the money. He accepted being involved with emails, Exhibits 12 and 13[22].
  1. [22]
    In re-examination Mr Monahan said that the villas in Fiji were available to them in credit. Mr Monahan paid the laundry, food and housekeeping. He did not run out of cash and did not request funds[23]. With respect to the emails, Mr Monahan said they had a good relationship but it did deteriorate in the last six to 12 months. He said that the meeting with the members of the defendant’s family were the defendant’s idea. He accepted that existing clients spoke highly of the defendant. Mr Monahan accepted that there should have been better auditing in the period before Ms Mulders commenced and the discrepancies may have been picked up if that had occurred[24].
  1. [23]
    Sally Douglas, a business manager with Redwood Capital gave evidence that she was the general manager of the Redwood Capital Group. She first met the defendant in January 2011. She gave evidence that John Sharpe was involved in the risk management process concerning compliance procedures. In early 2011 he overhauled a lot of the trading and risk management processes of Redwood Securities.[25]She also gave evidence that Jenny Mulders was involved in this process. In July 2012 she became aware of the matters involving the defendant. She seized the hard drives of the defendant’s computer.[26]In cross-examination she said that it was Brooke Monahan and her who looked at the business from the process perspective, i.e. a compliance and reporting perspective.[27]
  1. [24]
    Kerry Croker gave evidence that she was the assistant to the defendant from February 2012 with Redwood Securities. She reported to both the defendant and Mr Monahan. She had access to the FP Market trades and the CMA (Cash Management Accounts). She worked mainly for the defendant. She also worked with Ms Mulders concerning compliance. The clients would receive a monthly report with respect to trades as well as their own statements.[28]She would prepare the reports. The balance, i.e. the cash balance, would be seen in the CMA. She only had access to the CMA and the trading account. She would get the term deposit figure from the defendant.[29]An audit process was developed by Jenny Mulders in or about May or June of 2012. There was some clients that the defendant insist that he dealt with himself.[30]She was not able to obtain information concerning the term deposits despite a lot of asking.[31]She alleged the defendant would not allow her to have full access to the Macquarie Bank accounts.[32]The defendant was not supportive of compliance records being kept.[33]The defendant would be the person who sent the invoice to the clients.[34]She agreed that she received a telephone call from Mr Monahan and conducted an examination of the accounts and they all appeared to be authorised.[35]
  1. [25]
    Heather Richmond gave evidence that she worked at Redwood Capital between 2007 and 2012. She said that there was a monthly compliance report to comply with licence conditions for Redwood Securities.[36]The defendant was the person who signed the monthly reports. She was not able to say who was responsible for auditing the funds.[37]She checked monthly compliance reports between July 2010 and June 2012 and did not note any concerns in reports signed by the defendant.[38]She gave evidence that she requested from the defendant a copy of his Bachelor of Commerce degree but it was never provided. In cross-examination she said that the degree was referred to in his CV.[39]She conceded that it may be that he never told her that he had a degree qualification.[40]
  1. [26]
    Jenny Mulders gave evidence that she was engaged by Redwood Capital in May 2011 as the external compliance consultant. She met the defendant on a number of occasions. Her focus was on the licence of the Redwood Capital Group, not just Redwood Securities. She put together an audit schedule looking at risk focuses of the business. In October 2011 she commenced an audit of Redwood Securities looking at the trading and management structure.[41]John Sharpe took her through how the trading structures worked and verified any allocations and actual trading. A number of items were raised of need, particularly around record keeping and the reporting of CMA balances as well.[42]She discussed these issues with the defendant, Mr Sharpe and Mr Monahan and it was determined to rectify those deficiencies. The defendant frustrated this at a number of stages.[43]Ms Mulders gave evidence that from what she saw there had not been any relevant audits from 2009 until 2011.[44]
  1. [27]
    Kerry Croker was put there to be a second pair of eyes concerning the accounts and reconciliations. Ms Mulders stated that because this was wholesale rather than retail there was no financial requirement for an external audit.[45]I might say, in my view, this fact was a considerable contributor to what later happened in this matter. Ms Mulders said that Ms Croker was not able to access all information regarding the Macquarie Bank accounts, the defendant being the only person with such access. Ms Mulders spoke to the defendant and Mr Monahan as to Ms Croker needing access to the accounts.
  1. [28]
    As at June 2012 the numbers did not reconcile to what was showing in the Macquarie Bank statements. Ms Mulders recommended that the reconciliations be independently verified and reconciled. As at 16 July 2012 she was advised of irregularities that had come to light. Exhibit 2 and 3 were emails tendered during cross-examination. As was Exhibit 4.
  1. [29]
    Mr John Sharpe, a consultant to hedge funds, gave evidence that he has known Mr Monahan for about 10 years. He had been involved in the trading side for that time. His role was to watch the trades. He also assisted the defendant develop a trading system[46]. He first met the defendant in about 2010 and assisted with refining his trading method. Mr Sharpe had access to all of his trades. He said there were discrepancies across the clients[47]. He thought that the account in the name of “Nameless” was an experimentation account. After speaking to Mr Monahan he sat down with the defendant one morning and found that his trading was flawed[48]. He would have to open 10 different accounts and buy shares for each account. In 2011 they changed the trading method to long and short trading. By mid-2011 this new system was adopted by him. Between May and August 2011 the trading went well. However, in August 2011 there was a Standard and Poors downgrade of the USA and things did not go so well after that[49]. After September 2011 he said that the defendant became “sloppy” and tended to engage in wilder trades outside the method. The method was a disciplined system whereby stocks would be sold once there was a 2.5% loss or 6% to 7% profit.
  1. [30]
    Mr Sharpe spoke to the defendant about this. The fact is that after the USA was downgraded, markets became volatile and after this he thought the defendant had become gun-shy and was reluctant to put some trades on. They also tried to move to bulk broking and developed some software so this could be achieved. He also thought there needed to be more “eyes on the trading”. The defendant and he put together a template once the software program was written and he needed the clients’ balances and was waiting on the defendant to provide these but they were not forthcoming. Mr Sharpe conceded that control measures had not been put in place between 2009 and Christmas 2011. He said this was because it was a lengthy process. He also said that when Kerry Croker started, the defendant did not provide her with the trading numbers. He also said that the trading got “sloppy”. In this regard he bought some Westpac Banking Corporation shares but did not split it up. The defendant blamed FP markets for this. Mr Sharpe alleged that the defendant was becoming more erratic, although he said the system was now more transparent. In July 2012 Mr Sharpe engaged in a detailed examination of company dealings[50]. They did not know at that stage where all the money had gone. He went through all of the trades. He spoke to the Macquarie Bank and had access to the trading accounts and the cash management accounts and observed that there were lots of transactions of money being moved from one account to the other. It was like a round robin[51]. He thought there were about 35 transactions. He thought things went downhill after the MF Global collapse[52].
  1. [31]
    In cross-examination Mr Sharpe conceded he had started at Redwood Securities in 2010. He agreed that he had limited experience as a responsible officer. His role was to assist in the trading, his role was not on the compliance side. Jenny Mulders was responsible for compliance. He had access to the trading portal, i.e. Iress. He denied executing any trades through this. He did not recall putting any trades through in June 2012 through his book, although he may have[53]. The problem with doing separate trades on separate accounts was that some clients would be paying more for particular shares. It was clear that the defendant was inexperienced with bulk buying. He explained what he meant by “wild trades”. He denied that the defendant seemed overwhelmed. He accepted that two pairs of eyes were needed in this sort of situation. He said that he did not have access to the cash management account data. He said that the software, called “virtual worker”, did work. He also said that after the MF global collapse the investors received a return of 100 cents in the dollar both in Australia and Singapore[54].
  1. [32]
    The defendant gave evidence that he never told Mr Monahan or anyone else associated with him that he had tertiary qualifications aside from the diploma of financial services.[55]Towards the end of 2009 the defendant commenced business with Mr Monahan, namely Redwood Securities.[56]The defendant’s role was to be a private client advisor like a traditional stockbroker. He was to take instructions from Mr Monahan. Mr Monahan assured the defendant that he was the one who would go about setting up compliance, administration systems and back office procedures.[57]Mr Monahan set up the company structure and also had dealings with Macquarie Bank.[58]Mr Monahan was in charge of managing all company expenses etc.[59]The defendant did not have access to Redwood Securities Westpac Bank accounts.[60]When the business first commenced it was a traditional stockbroking model but it started to change when they used contracts for difference (“CFD’s”). Mr Monahan was responsible for having managed discretionary account (“MDA”) agreements signed by clients (investors) and was also responsible for calculating company business expenses.[61]The defendant brought two clients from Advestra Capital Markets, namely Zenonos and Khakh Trading Company. The defendant said he was quite inexperienced at the time and relied on Mr Monahan to take him under his wing and he reported to Mr Monahan multiple times via phone and email and would be guided by him. He would speak to Mr Monahan seven to ten times a day.[62]He also had contact with Mr Sharpe and relied heavily on his experience.[63]Mr Monahan had access to the trading portals.[64]Mr Sharpe wanted to move Redwood Securities into a discretionary trading model whereby they would execute their strategy on behalf of clients which was between 2% and 7%.[65]The defendant said that his main priority as he understood it was to implement and execute the trading strategy and it was up to John Sharpe and Kerry Croker in consultation with Mr Monahan to ensure that the post trade allocations were done. In this regard they relied on their own trade data access including the cash management account.[66]He thought that Ms Croker had access to the term deposits. He alleged that everybody had access to the trade data.[67]He said that the data was gathered by John Sharpe and Kerry Croker and the defendant had input when they needed clarification and they would collate it into an Excel spreadsheet and then Mr Monahan would reconcile all of the source documentation provided by Mr Sharpe and Ms Croker.[68]As the business grew in terms of trading strategy it became more complex and as a result Mr Sharpe purchased software called Portfolio Tracker.[69]The defendant had concerns about properly analysing the clients’ accounts and alleged that he raised his concerns with Mr Sharpe and Mr Monahan.[70]He alleged that the software which was purchased never actually worked properly. The software was not on top of or in control of the record keeping.[71]
  1. [33]
    On 31 October 2011 MF Global went into liquidation. They had client accounts with MF Global Australia as well as MF Global Singapore. S and P had downgraded MF Global (or its parent company) to junk status. He telephoned Mr Monahan and was told to move to cash so there was no exposure to CFD’s. Mr Monahan spoke to the managing director of MF Global.[72]His understanding was that the Australian and Singapore businesses were fine and were not exposed to any of the Greek debt that the American arm of the business had been exposed to. He did not believe the clients’ portfolios would be affected at that point. It became very difficult to get in touch with people at MF Global Australia and then the stocks were placed on hold, i.e. there was a trading halt.[73]The clients’ funds were then frozen and could not be accessed. At that stage the defendant panicked. He was contacted by some of the investors who had funds tied up with MF Global and the defendant told them that their funds were safe and would be okay.[74]Some of the clients demanded the return of their money and he used funds from other clients to pay those clients back.[75]These transfers were unauthorised.
  1. [34]
    With respect to the statements he agreed that $40,000 was transferred to his Westpac Bank account. Regarding the purchases with that money he did not know what CBD Gold was.[76]The sum of $6,020.89 he thought was for Mr Monahan’s Fiji trip and the $17,424.15 was for Mr Monahan’s Fiji holiday payment.[77]He accepted that the payment for Glen Road was for his personal benefit. There was an internet banking payment of $10,000 to Mr Apolakiatis.[78]Regarding the payment to Mr Monahan for his holidays he alleged that Mr Monahan called him and said he did not have enough funds on his credit card and asked the defendant to cover the cost for him.[79]
  1. [35]
    After the MF Global situation he continued to trade and he was hoping for MF Global to “come good so we could redistribute the funds correctly”.[80]As it turned out this did not happen. Ultimately the defendant sent the emails the subject of Exhibit 1 to Mr Monahan. The defendant said that he was extremely distressed and was intending to do the right thing by the clients. He alleged there was no intention to try and take the funds out for himself or for anybody in particular.[81]He alleged that Mr Monahan told him that he had to come up with $5 million or his life and his family’s life were in jeopardy and he wrote the emails in a distressed state.[82]He was shown particular emails and alleged that his statement that he had been lying to clients and had been reporting fake brokerage figures was a “poor choice of words”.[83]He also attempted to explain the use of his words “fabricated internal spreadsheets”.[84]He denied fabricating documents stating that there were errors instead. He said that he was not doing this to line his own pockets.[85]
  1. [36]
    The defendant was cross-examined on 30 June 2016. He said he did not recall Ms Richmond asking for his certificates and did not recall “fobbing her off”.[86]He then denied he represented to Mr Monahan that he had particular qualifications, namely a bachelor of commerce.[87]I did not find the defendant’s evidence on this point very convincing.
  1. [37]
    He alleged that he did not represent himself as having a fair degree of experience in financial matters. He said that Mr Monahan knew of his limited experience and this is why Mr Monahan introduced him to John Sharp.[88]There is probably some truth in that answer.
  1. [38]
    He accepted that he transferred clients’ funds without authority, acting dishonestly, and did this repeatedly.[89]In answer to the question as to whether he took steps to deceive clients he said, “I guess so”.[90]It was then put to him that he had told lies to clients and he was quite equivocal in his response concerning this.[91]He also did not want to distinctly admit that he had falsified documents. I found him relatively nonresponsive on these points. Indeed, his evidence in this regard is contrary to Exhibit 1, namely emails (in particular the email dated 24 July 2012) where he admitted fabricating false statements in June/July 2012. The defendant in evidence tried to suggest that Mr Monahan had dictated the contents of the emails, the subject of Exhibit 1.[92]I do not accept the defendant’s evidence on this. It is my view that the statements made in the emails are entirely consistent with the evidence. It is my view that Mr Monahan would not have been fully apprised of the details of what had happened prior to the time of the emails. I think it unlikely that the defendant’s evidence is correct. I do not find that Mr Monahan dictated the emails and the defendant simply wrote what was in them. I find that he made the admissions through remorse and was telling the truth at that stage. I have referred to the full details of these admissions later in this judgment.
  1. [39]
    The defendant disagreed that he had obstructed others from obtaining information. I do not accept the defendant’s evidence on this point.[93]In light of the fact he was involved in a significant fraud, I think it is likely, as claimed by the witnesses for the prosecution, that he did obstruct them from obtaining full information, in particular Ms Croker. He denied making false statements to his colleagues.[94]I do not accept this. Again, it is more likely that he would have been covering up his fraud, certainly by early 2012.
  1. [40]
    With respect to the emails, Exhibit 1, I do not accept the defendant’s contentions that he was forced to write the matters in those emails. At one point the defendant in evidence denied that he had fabricated spreadsheets but then admitted that he had fabricated an Excel document which recorded clients’ balances and profit and loss and then considered it was a spreadsheet.[95]He accepted that the transactions were complicated and he was unable to keep a track himself of all of these transactions which is consistent with that which is stated in the first email dated 18 July 2012.[96]
  1. [41]
    Despite his denials, I think this is a case where the defendant was remorseful at the start but over time has been trying to shift the blame from himself, at least in part, to Mr Monahan. He admitted manipulating files.[97]He denied he kept people from accessing files[98]but, again, I do not accept this in light of the admissions made in the emails. He agreed that he had confessed to his honesty in the emails. Ultimately, when asked about the details of the email dated 24 July 2012, he admitted that the answers he gave to the particular questions were correct.[99]
  1. [42]
    He was cross-examined about whether he paid for Mr Monahan’s holiday to Fiji to impress him. Exhibit 16 is an email concerning a Hong Kong trip in or about April 2012. The defendant admitted paying for other people’s overseas trips.[100]
  1. [43]
    Ultimately, I am persuaded that Mr Monahan’s evidence as to the Fiji trip is correct. He accepted that he had difficulty keeping track of matters for some months between April and June 2012 and matters had got “out of control”. He admitted it had become concerning and he was preoccupied by these matters.[101]He alleged his own financial position was not relevant and denied entering into any contract to purchase a house.
  1. [44]
    The defendant did not recall having any discussions for the purchase of the property at Glen Road. He was confronted with emails in this regard (Exhibit 17) but this did not refresh his memory.[102]I do not accept his denials on this- surely one would recall the negotiation of a significant contract concerning the purchase of property.
  1. [45]
    In re-examination Mr Madhoji gave evidence that he had, through his lawyer, advised the Crown that he was willing to cooperate in any way.[103]

Accounting evidence

Mr Bennett

  1. [46]
    Mr Bennet an accountant employed by the Crown has provided a report dated 16 March 2014.[104]
  1. [47]
    Mr Bennett has prepared a summary of Mr Madhoji’s dealings with the client’s funds. He says that this goes into the background of matters disclosed in the statements and identifies relevant transactions, and a loss incurred or profit earned by various clients. He concluded that total fees paid to the company, Redwood Securities from the accounts of clients were $1,109,371.58 with $419,695.83 relating to fees earned from conducting trading. Between September 2011 and June 2012 a total of $155,000 was transferred from Redwood Securities to a Westpac account numbered 668283 in the name of the defendant. In addition to this on 20 April 2012 $40,000 was transferred directly to the personal account of the defendant from the Macquarie account of MInvestments Pty Ltd.
  1. [48]
    He then as attachment C sets out a “listing of transactions in chronological order which totals $6,013,632.19”. Turning then to the summary of dealings with the client’s funds each of the complainants have been dealt with separately. Mr Bennett opines as follows:
  1. (a)
    The net loss to entities associated with Mr Apolakiatis was $41,482.17.
  1. (b)
    The benefit to Barlow was $182,925.29.
  1. (c)
    The benefit to entities associated with Burdon was $525,925.93
  1. (d)
    The loss to Kylie Deane was $98,995.39.
  1. (e)
    The loss to entities controlled by Dimetriou was $405,498.45.
  1. (f)
    The loss to KAKH Trading Company Pty Ltd was $21,974.62.
  1. (g)
    The loss to entities associated with Mr Kilvert was $662,001.65.
  1. (h)
    The loss to GMS Group Nominees is $459,096.32.
  1. (i)
    The loss to entities associated with Joseph Mathews is $716,003.83.
  1. (j)
    The gain for Mr Sherlock and his entities was $180,451.73 for J S Sherlock Super Fund and $161,359.09 for M Investments.

(k)The gain for Brooke Monaghan and Two Eagles was $83,204.68.

(l)The loss with respect to the gain for Stone Cold Pty Ltd is $376,297.35 estimated.

(m)The loss for Tapsall is $70,000.

(n)The loss for Oniviro Super Pty Ltd was $347,531.

(o)The loss for Kinghorn’s entities was $85,004.74.

(p)The loss for Agjit Viswilingan was $63,700.

(q)The loss for Paul Parker was $100,000.

(r)The loss for Kieran and Susan Burns was $90,000.

(s)The loss for Timothy Sherlock was $18,213.63.

(t)The profit for Michael Sherlock was $665,000 estimated.

(u)The benefit for Andrew Pavlou was $269,395 estimated.

  1. (v)
    The benefit for Nicholas Pavlou was $235,464.84.

(w)The benefit for Dykstra was $70,000.

  1. (x)
    The benefit Carolyn Berry was $19,000.04.

(y)The benefit for Gibbs Hurley & Co Pty Ltd was $25,000.

(z)The benefit for Gilbride Management Pty Ltd was $16,975.

(aa)The benefit for Paul Gedaun Construction & Development Pty Ltd was $46,000.13.

  1. [49]
    As I calculate it the net loss is $3,555,799.15 and the gain $2,489,701.73.
  1. [50]
    After the two experts met Mr Bennett agreed with Ms Bundesen’s supplementary report (Exhibit 9).
  1. [51]
    In the attachment to Exhibit 6 Mr Bennett opined that it would seem from at least October 2011 the defendant ceased to operate an investment scheme and began to operate more as a “Ponzi” scheme in that he used the funds of clients both existing and newly introduced, to make payments to other clients leaving the scheme and providing investors with false statements.[105]
  1. [52]
    Mr Bennett, in evidence, said that he had access to all of the Exhibits to prepare his report[106]. He said that the total transfer of funds from clients’ accounts to other clients or other parties totalled $6,013,632.19. He said that a number of transfers were to cover up earlier transfers. He said that with respect to the “gains” by some clients some of those clients have “double dipped” but a number of clients remain out of pocket[107]. He had seen the revised report of Ms Bundesen[108]and conceded that the net gains and net losses balanced out[109]. With respect to the Ponzi scheme issue he conceded that legitimate trading was going on[110], but in other cases clients’ funds were used to pay back other clients. He said that the major difficulties seem to have commenced after the MF Global problem in October 2011. He said that the only direct benefit the defendant seemed to have received was $40,000[111]. His director fees totalled $265,000, therefore a total benefit of $305,000. He conceded that some of this was legitimate money. With respect to Exhibit 9, the $4,133 payment for Glen Road was to the landlord.
  1. [53]
    In cross-examination Mr Bennett conceded he had looked at further documents received on subpoena and conceded that also there was legitimate trading after October 2011[112]. With respect to Exhibit 5, Ms Bundesen’s first report, aside from her evidence concerning the “Ponzi” scheme he did not take issue with pp 34-35. He also noted that $816,000 remained to be distributed to the remaining clients.

Ms Bundesen

  1. [54]
    Ms Lisa Bundesen has provided a forensic accounting report dated 16 March 2016[113]. She has examined a number of the clients of the business and has determined the trading losses/gains.
  1. (a)
    In respect of entities associated with Peter Apolakiatis there is a net loss of $41,480.70.
  1. (b)
    With respect to Marcus Barlow she has determined that the net gain was $182,925.29.
  1. (c)
    With respect to Andrew Burdon Entities she has determined a net gain of $525,925.93.
  1. (d)
    With respect to Kieran Burns there was a net loss of $90,000.
  1. (e)
    With respect to Kylie Deane the net loss was $98,995.39.
  1. (f)
    With respect to Charlie Dimetriou Entities the net loss was $405,498.45.
  1. (g)
    With respect to GMS Group Superannuation Fund the net loss was $459,096.32.
  1. (h)
    With respect to the KAKH Trading Company Pty Ltd the net loss was $22,671.09.
  1. (i)
    With respect to entities of Robert Kilvert the net loss was $664,737.73.
  1. (j)
    With respect to Klint Dykstra the net gain was $70,000.

(k)With respect to Russell Kinghorn and his entities the net loss was $234,030.74.

(l)With respect to entities controlled by Joseph Mathew the net loss was $697,936.02

(m)With respect to entities involving Justin Sherlock the net gain was $109,381.09.

(n)With respect to the Two Eagles Pty Ltd the net gain was $83,204.68.

(o)With respect to Oniviro Super Pty Ltd the net loss was $347,531.

(p)With respect to the Parker Super Fund the net loss was $100,000.

(q)With respect to Vanessa Pavlou the net gain was $285,464.84.

(r)With respect to the Pavlou Superannuation Fund the net gain was $269,395.80.

(s)With respect to Timothy Sherlock the net loss was $18,213.63.

(t)With respect to Agjit Viswilingan the net loss was $63,700.

(u)With respect to Tapsall Pty Ltd the net loss was $70,000.

  1. (v)
    With respect to Stone Cold the net loss was $440,978.

(w)With respect to Bahruz Bahram the net gain was $5,953.85.

  1. (x)
    The net gain to CL Platinum Pty Ltd was $60,145.

(y)The net gain to CL Vitali Super Fund was $69,985.32.

(z)The net gain to Merryside Pty Ltd was $55,856.04.

  1. [55]
    As I calculate it the net loss is $3,754,869.07, the net gain is $1,718,237.84.
  1. [56]
    This was amended in Exhibit 9 to a net loss of $3,251,281.35 and a net gain of $3,251,281.35. Also $814,585.78 remains to be distributed proportionally as a result of Macquarie Bank Ltd v The Two Eagles Pty Ltd.[114]
  1. [57]
    It is Ms Bundesen’s analysis that the funds from the investors had been used in one or more of the following ways:
  1. (a)
    invested through FP Markets or similar trading facilities;
  1. (b)
    transferred to MF Global;
  1. (c)
    returned to the investor/used by the investor;
  1. (d)
    transferred to another investor;
  1. (e)
    paid as brokerage to Redwood Securities Pty Ltd;
  1. (f)
    Transfers to the defendant;
  1. (g)
    bank fees/withholding tax.
  1. [58]
    At [150] Ms Bundesen points out that a full reconstruction of the client accounts has not been possible as statements from various accounts are not available including MFGlobal and some Macquarie Bank accounts.
  1. [59]
    As to whether this is a Ponzi scheme Ms Bundesen refers to the various definitions of such schemes and notes at [164] that:

  • a Ponzi scheme would involve funds being received into the scheme by investors and used either totally or a significant proportion to pay capital and returns to early investors. In my opinion this has not happened in this matter as funds had been used for investment purposes and have not in their entirety been used to repay earlier investors.

  • There are no real investments in a Ponzi scheme. In my opinion based on the documents provided, real investments were made in this matter through accounts such as FP Markets and Pershing/Pension.

  1. [60]
    As to the financial benefits to Mr Madhoji her analysis is at paragraph [165]. In the 2009/2010 financial year $13,514 was distributed to Silver Lining Group Trust (Mr Monahan) and Karega Family Trust (Mr Madhoji). In the 2010/2011 financial year $135,696 was distributed to Silver Lining Group Trust & Karega Family Trust.
  1. [61]
    In the 2011/2012 financial year $243,835 was distributed to Silver Lining and the same amount to Karega Family Trust.
  1. [62]
    In addition, a review of the Westpac Bank accounts of Redwood Securities and of MrMadhoji showed Mr Moynihan received $327,034; Mr Madhoji $225,000 and further deposits of $265,000. These amounts seemed to reflect the drawings of each of the parties although there is some discrepancy.
  1. [63]
    At paragraph [171] it is noted that $40,000 was deposited into the Westpac Bank account of Mr Madhoji on 20 April 2012.
  1. [64]
    Ms Bundesen has provided a further report, Exhibit 9. In the further report, after further examination, she has determined that the net gains were $3,251,281.35 and net losses were $3,251,281.35, leaving a difference of zero dollars.
  1. [65]
    She has also determined that distributions to Mr Monahan, or his entities, totalled $354,534; and distributions to Mr Madhoji were $245,000, including other deposits to his account. The total to the defendant was $265,000.

Particular transactions

  1. [66]
    There is no great dispute between the two experts as to the particular transactions in this matter. I have attached as Annexure A, a summary of the amounts involved with each count the details of which are discussed below.

Peter Apolakiatis[115]

  1. [67]
    Mr Apolakiatis invested about $114,000 with Redwood Securities in December 2011/January 2012. With respect to count 26, on 19 January 2012 there were three transfers from his Superannuation Funds Macquarie account to other investors’ Macquarie accounts as follows:
  1. (a)
    $68,891.08 to M Investments (J Sherlock);
  1. (b)
    $1,096.48 to Khakh Trading;
  1. (c)
    $1,004.61 to Kylie Deane.

Following the receipt of these funds into these accounts the following funds were transferred on 24 January 2012 to the Westpac Bank account of Redwood Securities as brokerage fees:

  1. (d)
    $69,911.98 from M Investments;
  1. (e)
    $1,096.48 from Khakh Trading;
  1. (f)
    $1,004.61 from Kylie Deane.

These funds were primarily used to make a $30,000 distribution to the defendant and Mr Monahan and to pay monthly invoices owing by Redwood Securities ($14,513.20).

  1. [68]
    With respect to count 45, on 10 May 2012 $40,000 was withdrawn from the Superannuation Funds account and paid to M Investments. On the same day $40,000 was withdrawn from the M Investments account and paid to Zenonos. On 30 March 2012 a second account in the name of Apolakiatis was opened with Macquarie. The $10,000 deposit to that account on 30 March 2012 was sourced from the Macquarie account of M Investments. There were two subsequent withdrawals totalling $7,500 from this account. On 12 April 2012 a further $9,500 was transferred from M Investments and $11,600 was transferred from this second account. On 28 May 2012 a further $50,000 was transferred from M Investments and this sum was withdrawn on the same date with the notation “loan to atrium”. All of the withdrawals from this account were completed by Apolakiatis.
  1. [69]
    No brokerage was paid by him. The net loss to him was $41,482.17.

Marcus Barlow[116]

  1. [70]
    Mr Barlow invested $200,000 with Redwood in 2009/2010. There was considerable trading using Pension Financial in the early years, later with First Prudential markets (FP). In late August to early September 2010 there was a selling down of the investment securities of Barlow. The defendant transferred $21,665 from the Macquarie account of the Two Eagles Pty Ltd into Mr Barlow’s account so that when the equities were realised the balance of Mr Barlow’s account was $215,348.43. Without this sum from Two Eagles Pty Ltd the investment would have been in a loss situation (count 1). On 28 June 2011 $49,026 was transferred from Kinghorn’s Macquarie account to the FP account of Mr Barlow (count 10) and this sum, with the balance held for Barlow, were returned ($200,895.87) on 30 June 2011 to Barlow’s Macquarie account. On 5 July 2011 the $49,026 was returned to Kinghorn’s FP account from Barlow’s Macquarie account. During the period March 2011 to June 2012 Redwood withdrew fees of $27,528.23 from Barlow’s account. The balance was only $134,000. When Barlow asked to close his trading account in early July 2012 the defendant recovered $134,742.17 from FP and used $161,995.37 of Mathew’s funds (counts 54 and 55).
  1. [71]
    Brokerage of $27,528.23 was paid from Barlow’s accounts to Redwood Securities. The benefit to Barlow was $182,925.29.

Andrew Burdon[117]

  1. [72]
    The first transaction on Andrew Burdon’s account occurred on 24 November 2010 when $6,000 was transferred from his Macquarie Bank account to the Commonwealth Bank account of Justin Sherlock (M Investments) (count 3). At the time of this transfer there were not sufficient funds in Sherlock’s Macquarie Bank account to make this transfer. Mr Burdon had an account called Pagoda Macro Plus with MF Global in Singapore. The sum invested was in excess of $500,000. It would appear that Mr Monahan also had an interest in this account but it not clear what the interest was. The defendant transferred funds on 1 November 2011 from the following clients’ Macquarie Bank accounts into an account with FP in the name of Zenonos (Stone Cold) who the defendant had advised he had invested considerable funds with MF Global in Singapore:
  1. (a)
    Adam Kilvert - $500,000;
  1. (b)
    Joseph Mathew - $270,000;
  1. (c)
    Joseph Mathew - $57,000.
  1. [73]
    $700,000 was transferred from the FP account of Zenonos to the Macquarie account of Zenonos on 4 November 2011. On 8 November 2011, there were two withdrawals from Zenonos’ Macquarie account, namely $238,000 and $268,000. The funds were deposited to the Macquarie accounts of Burdon (count 18). The bulk of the funds in Burdon’s Macquarie account were returned to him on 9 November 2011. As to count 29, on 16 February 2012 the following funds were transferred out to Burdon’s Macquarie account into the Macquarie accounts of the following:
  1. (a)
    Adam Kilvert - $776.92;
  1. (b)
    Kurisummoottil - $9,899.34;
  1. (c)
    Charlie Demetriou - $3,997.81.

All of these transfers were made so that brokerage payments could be paid to Redwood Securities on 17 February 2012, as there were insufficient funds in each of the above three accounts, to make the following payments:

  1. (a)
    Adam Kilvert - $3,637.97;
  1. (b)
    Kurisummoottil - $9,899.34;
  1. (c)
    Charlie Demetriou - $6,995.05.
  1. [74]
    With respect to count 44, on 10 May 2011 $5,000 was transferred from Burdon’s account to the account of King Horn Holdings Pty Ltd. This transfer was made so that a brokerage payment of $5,013.78 could be paid to Redwood Securities on that day as there were insufficient funds in the account of King Horn Holdings Pty Ltd to make the payment. Burdon closed his super account with Redwood and wanted all funds transferred to him. On 25 June 2012 the balance of his Macquarie accounts ($39,174.41) was transferred to him. On 28 June 2012 two sums totalling $40,600 were transferred into the Macquarie account from two Macquarie accounts in the name of Demetriou, $13,800 was transferred from the Charlie Demetriou Family Trust, and $31,800 from the Sergios Family Trust (count 51). These funds and some interest paid by Macquarie were paid to Burdon on 2 July 2012 to close the Burdon Superfund account with Macquarie. Overall, Burdon benefitted from his trading with Redwood. The losses he incurred with MF Global were covered by other investors’ funds and he received funds from Demetriou to cover the alleged profits.
  1. [75]
    Brokerage of $47,538.03 was paid from Burdon’s accounts to Redwood Securities. The net gain appears to have been $525,925.93.

Kylie Leanne Deane[118]

  1. [76]
    Ms Deane paid $100,000 into the Macquarie Bank account on 31 August 2011. With respect to count 16, these funds remained in the account up until 4 November 2011. On that date the $100,000 was transferred to the Macquarie account of Two Eagles Pty Ltd. At the same time this amount was transferred, a further $135,000 was transferred from Kurisummoottil (Mathew). On 7 November 2011 $242,000 was withdrawn from the Macquarie account by Two Eagles. It would appear there was no trading undertaken on behalf of Deane. However, on 23 January 2012 $1,004.61 was transferred from the Macquarie account to Redwood Securities. These funds had been transferred into the account from Peter Apolakiatis’ Macquarie account on 19 January 2012 (count 26).
  1. [77]
    Total brokerage of $1,862.04 was paid from Deane’s account to Redwood Securities. The loss by Deane was $98,995.39.

Charlie Demetriou[119]

  1. [78]
    Mr Demetriou had three Macquarie Bank accounts. The first was in the name of Gikos Pty Ltd as trustee for Tsiakos Superannuation Fund which commenced in September 2011. Various sums totalling $260,000 were deposited into this account in the period up to 1 November 2011.
  1. [79]
    As to count 20, the $260,000 was transferred from the account on 25 November 2011 and deposited into an account at FP. However, it was not deposited into an account in the name of Demetriou or his company but into an account in the name of Andrew Pavlou, who was another client of Redwood. Pavlou’s funds had been invested by the defendant with MF Global and were frozen after that company went into administration. The defendant arranged for Demetriou’s funds to be deposited into the FP account and then on 28 November 2011 the funds were transferred to Pavlou’s Macquarie account and from there deposited to Pavlou’s Ord Minnett share trading account. On 10 May 2012, Demetriou invested a further $150,000 through this account.
  1. [80]
    As to count 46, these funds were withdrawn from the account on 28 May 2012 with the notation “trading transfer”. They were in fact transferred to another Macquarie account in the name of M Investments Pty Ltd (J Sherlock). The funds were dispersed from M Investments as follows:
  1. (a)
    28 May 2012 – Apolakiatis – $50,000;
  1. (b)
    29 May 2012 – Kilvert – $4,000;
  1. (c)
    29 May 2012 – Kurisummoottil – $50,000;
  1. (d)
    29 May 2012 – Kinghorn – $2,500;
  1. (e)
    31 May 2012 – Behouz Bahrami – $5,953.85;
  1. (f)
    4 June 2012 – Christos Thomas – $4,500;
  1. (g)
    5 June 2012 – Christos Thomas – $4,500;
  1. (h)
    8 June 2012 – Redwood Securities – $29,598.90.
  1. [81]
    On 12 June 2012 Demetriou received an FP statement dated 8 June 2012 which showed an account balance of $577,914.70.
  1. [82]
    The second Macquarie account opened was styled Charlie Demetriou as trustee for the Charlie Demetriou Family Trust. It was opened with a deposit of $14,775.48 on 5 December 2011 from Pension Financial.
  1. [83]
    As to count 21, on 6 December 2011, $9,395.80 was transferred to FP to an account in the name of Pavlou. On 16 December 2011 $5,379.08 was transferred to Redwood Securities as fees.
  1. [84]
    On 16 February 2012 $3,997.81 and $2,997.27 was transferred to the account from the Macquarie accounts of Burdon and Kinghorn respectively. On 17 February 2012 $6,995.08 was transferred to Redwood Securities as fees (counts 29 and 30). On 14 March 2012 $14,627.01 was transferred into the account from the Macquarie account of Kinghorn and on the following day $14,627.34 was transferred to the Redwood Securities account as fees (count 34).
  1. [85]
    On 12 April 2012 $37,875.26 was transferred into the account from the Macquarie account of M Investments and on the following day the same amount was transferred to Redwood Securities as fees. On 20 June 2012 a deposit of $13,825.50 from Pershing Securities was made to the account.
  1. [86]
    As to count 51, on 28 June 2012, $13,800 was transferred to the Macquarie account of Burdon.
  1. [87]
    The third Macquarie account for Demetriou was styled Charlie Demetriou as trustee for the Sergios Family Trust. It opened with a deposit from Pershing Securities of $31,870.80 on 20 June 2012.
  1. [88]
    Also as to count 51, on 28 June 2012, $31,800 was transferred to the Macquarie account of Burdon. These funds along with funds from another client paid to Burdon’s account on 28 June 2012 were paid to Burdon on 2 July 2012 to close the Burdon’s Superfund account with Macquarie.
  1. [89]
    Total brokerage of $65,965.11 was paid from Demetriou’s accounts to Redwood Securities. The net loss by entities controlled by Demetriou was $405,498.45.

Khakh Trading Company Pty Ltd[120]

  1. [90]
    Khakh deposited $50,000 for the defendant to invest on its behalf. In a monthly report sent to Khakh in January 2012 the company was advised that the balance of the investment had grown to $69,621.55. In fact, there had been transfers to and from Pension Financial, the last transaction being on 26 October 2011 when $21,545.49 was deposited by that company into the Macquarie account in the name of Khakh. Following this transfer the balance of the account stood at $27,231.11.
  1. [91]
    On 20 December 2011 $10,000 was transferred to the Macquarie account of Mathews Superfund (count 24). With respect to count 24, on the following day, $15,000 was transferred from the Macquarie account of Khakh to the Bank of Queensland account of Andrew Gibbs (GM Trust) described as “RWS transfer”. Also on that date $20,179.03 was transferred to the Westpac Bank account in the name of Christopher Zenonos. It was also described as a “RWS transfer”.
  1. [92]
    On 19 January 2012 $1,096.48 was transferred into the Macquarie Bank account of Khakh from the Macquarie account of Apolakiatis (count 26). These funds were withdrawn on 23 January 2012 and paid to Redwood Securities as brokerage fees.
  1. [93]
    On 16 February 2012 $1,411.46 was transferred into the Macquarie Bank account of Khakh from the Macquarie account of Kinghorn. These funds were withdrawn on 17 February 2012 and paid to Redwood Securities as brokerage fees (count 30).
  1. [94]
    On 12 March 2012 $696.47 was transferred from the Macquarie account of Tim Sherlock to FP on behalf of Khakh (count 32).
  1. [95]
    Total brokerage of $11,982.91 was paid from Khakh’s account to Redwood Securities. Khakh lost $21,974.62.

Robert Adam Hugh Kilvert[121]

  1. [96]
    Robert Kilvert is the controller of Gisana Pty Ltd. He invested about $220,000 with the defendant. The funds were deposited to an account in the name of Gisana Pty Ltd as trustee for the Nanazel Superannuation Fund No 2. The $220,000 was deposited to the account on 31 May 2011.
  1. [97]
    With respect to count 5, on 16 June 2011, $14,295.73 was transferred from the account to the Commonwealth Bank account of Justin Sherlock.
  1. [98]
    With respect to count 6, on 22 June 11, $70,000 was transferred to the Suncorp account of Clint Dykstra.
  1. [99]
    With respect to count 7, on 28 June 2011, $100,000 was transferred to FP to an account in the name of Nameless Pty Ltd (M Sherlock). At the same time as this the following funds were withdrawn from other clients:
  1. (a)
    Kinghorn Family Trust - $99,000 applied to M Sherlock;
  1. (b)
    GMS Group - $86,000 applied to Nameless Pty Ltd;
  1. (c)
    Kinghorn Family Trust - $100,000 applied to Nameless Pty Ltd;

Total - $267,000.

The total of these four transfers was $367,000. On 29 June 2011, $154,419.55 was deposited to M Sherlock’s Macquarie account and $327,201.95 was deposited to the Macquarie account in the name of Nameless Pty Ltd by FP.

  1. [100]
    On 20 December 2011, $10,000 was deposited to the Gisana account from the Macquarie account of Tim Sherlock (count 24). At the time of the deposit, the Gisana account only had $11.30 in the account. On 21 December 2011 $4,971.08 was paid to Redwood Securities as fees and on 7 February 2012 further fees of $2,205.18 were paid to Redwood.
  1. [101]
    On 16 February 2012, $776.92 was paid to the account from the Burdon SuperFund Macquarie account (count 29). The following day $3,637.97 was paid to Redwood Securities. This reduced the account to a zero balance.
  1. [102]
    On 12 March 2012 $696.47 was transferred from the Macquarie account of Tim Sherlock to FP on behalf of Kilvert (count 32). Further funds were drawn from Tim Sherlock’s account, $2,736.08 on 14 March 2012 (count 35) and $2,045 on 10 April 2012 (count 40). The day following each of these deposits, fees of $2,736.08 and $2,044.30 were paid to Redwood Securities.
  1. [103]
    On 29 May 2012, $4,000 was withdrawn from the account of M Investments and deposited to the Gisana account. On the same day $3,516.73 was paid to Redwood Securities as further fees.
  1. [104]
    There was another account opened at the Macquarie Bank for Kilvert and this account was in his own name. It was opened with a deposit of $500,000 with the notation “same day deposit Gisana Pty Ltd”. With respect to count 13 the $500,000 remained in the account until 1 November 2011 when it was transferred along with $327,000 of funds belonging to J Mathew into an account with FP in the name of another client, Zenonos (Stone Cold). $700,000 was transferred from FP to the Macquarie account of Zenonos on 4 November 2011. On 8 November 2011 there were two withdrawals from the Zenonos’ Macquarie account, i.e. $238,000 and $268,000. The funds had been deposited to the Macquarie accounts of Burdon. The bulk of the funds in the Burdon’s Macquarie account were returned to him on 9 November 2011.
  1. [105]
    Total brokerage of $34,815.16 was paid from the Kilvert’s accounts to Redwood Securities. The total loss of Kilvert and his superfund was $662,001.65.

GMS Group Nominees Pty Ltd[122]

  1. [106]
    GMS Group was a company controlled by George Mathew Sample and Michael Crouch. $500,000 was invested with the defendant of which $250,000 was deposited the Macquarie account in the company name on 24 February 2011 and a further $100,000 was contributed on 1 December 2011.
  1. [107]
    With respect to count 8, on 28 June 2011, $86,000 was transferred from the Macquarie account to FP but those funds were applied to the account of Nameless Pty Ltd (M Sherlock). The money was then used to make payments to M Sherlock and Nameless Pty Ltd. On 4 November 2011, $100,000 was returned from FP and this, together with the further $100,000 deposited on 1 December 2011, led to a balance of $275,941.52 in the Macquarie account in December 2011.
  1. [108]
    With respect to count 22, on 7 December 2011, $241,000 was transferred from the account to the FP account in the name of Stone Cold (Zenonos). This $241,000 of GMS funds were used to partially return the funds to Zenonos’ FP account. On 23 January 2012 a further $228,169 was redeemed from GMS’s FP account. This meant that the Macquarie account had a balance of $257,489.62.
  1. [109]
    With respect to count 27, on 24 January 2012, $240,096.32 was transferred from the GMS Macquarie account to the FP account in the name of Stone Cold (Zenonos). On 4 April 2012 $312,000 was transferred into the Macquarie account of GMS (count 38). These funds came from the Macquarie account of Oniviro Super Pty Ltd (Palmer). Palmer had deposited about $500,000 of superannuation funds into this Macquarie account between November 2011 and February 2012. The deposit of Oniviro’s funds into the account resulted in the balance being $319,708.93. During the period 17 April 2012 to 11 July 2012 the funds were disbursed as follows:
  1. (a)
    17 April 2012 (count 41) $65,000 to Macquarie account of M Investments Pty Ltd (T Sherlock);
  1. (b)
    19 April 2012 (count 42) $100,000 to Macquarie account of M Investments Pty Ltd (T Sherlock);
  1. (c)
    27 April 2012 $100,000 to the FP account in the name of GMS;
  1. (d)
    11 July 2012 (count 54) $39,000 to the Macquarie account of Kurisummoottil (Mathew);

Total - $304,000.

  1. [110]
    Only the transfer on 27 April 2012 was for the benefit of GMS. The $65,000 deposited to the M Investments account was dispersed on 18 April 2012 with $19,000.94 transferred to the Macquarie account of C Barry and $46,000.31 transferred to the Macquarie account of Paul Gedoun Construction and Development Pty Ltd. During March 2012 the FP account of Gedoun had been realised and $64,354.40 paid to Gedoun. On 19 April 2012 the Macquarie account was closed and $46,079.70 was paid to Gedoun.
  1. [111]
    The $100,000 paid to M Investments on 19 April 2012 was dispersed on 20 April 2012 as follows:
  1. (a)
    C Zenonos - $30,000;
  1. (b)
    Wendshel No 13 (Solomon) - $30,000;
  1. (c)
    The defendant - $40,000.
  1. [112]
    On 11 July 2012 $39,000 was paid by GMS to Kurisummoottil (Mathew) and $120,000 was also paid to the same account from Zenonos. On 11 July 2012 $161,260.29 was transferred from the Kurisummoottil account to the Macquarie account of Barlow.
  1. [113]
    Total brokerage of $41,342.16 was paid from the GMS account to Redwood Securities. The company’s loss was around $459,096.32.

Joseph Mathew and Kurisummoottil Pty Ltd[123]

  1. [114]
    Mr Mathew and his company made total investments of $1,370,000 to be managed by the defendant. The sums paid were as follows, according to Dr. Mathew:
  1. (a)
    12 March 2010 - $335,000;
  1. (b)
    2 June 2010 - $600,000;
  1. (c)
    3 March 2011 - $85,000;
  1. (d)
    6 September 2011 - $250,000;
  1. (e)
    16 July 2012 - $100,000;

Total - $1,370,000.

  1. [115]
    On 1 November 2011 the defendant transferred the following funds into an FP account in the name of Zenonos:
  1. (a)
    Kilvert - $500,000;
  1. (b)
    Mathew - $270,000 (count 14);
  1. (c)
    Kurisummoottil - $57,000 (count 15).
  1. [116]
    $700,000 was transferred from the FP account to the Macquarie account of Zenonos on 4 November 2011. On 8 November 2011 there were two withdrawals form the Zenonos Macquarie account, namely $238,000 and $268,000. These funds were deposited to the Macquarie accounts of Burdon. The bulk of the funds in Burdon’s Macquarie accounts were returned to him on 9 November 2011.
  1. [117]
    With respect to count 17 there was a transfer of $135,00 from the Kurisummoottil account to Two Eagles Pty Ltd on 4 November 2011. Two Eagles Pty Ltd (associated with Mr Monahan) had given the defendant $375,000 to invest on its behalf. It would appear that few funds were actually invested on behalf of Two Eagles Pty Ltd and, indeed, there was only $7,145.72 in its Macquarie account. The accused transferred $100,000 from the Macquarie account of Kylie Deane and $135,000 from the Kurisummoottil account to the account of Two Eagles Pty Ltd. Also, on 7 November 2011, $242,000 was transferred from the Macquarie account to the Silver Lining Trust operated by Two Eagles. In early November 2011 $300,000 was returned to the Macquarie account of Mathew from FP.
  1. [118]
    With respect to count 19, on 23 November 2011, the defendant transferred $285,464.84 from Mathew’s account to an FP account in the name of Vanessa Pavlou. On 29 November 2012, $285,464.85 was paid by FP from the account of Pavlou to Pavlou’s Macquarie account. On the following day the balance of the funds in the Macquarie accounts, namely $329,930.98, was paid to Pavlou to close the account. With respect to count 25, on 20 December 2011, $10,000 was transferred from the Macquarie account of Mathew’s Superfund to the Macquaire account in the name of Khakh Trading. By this time the two Macquarie accounts of Mathew were virtually exhausted of all funds. On 16 February 2012, $9,899.34 was transferred to the Kurisummoottil account from the Macquarie account of Burdon. This same sum was withdrawn from the account the following day and paid to Redwood Securities as brokerage fees (count 29). On 10 April 2012 $4,978 was transferred to the Kurisummoottil account from the Macquarie account of J Sherlock (count 39). $4,977.09 was withdrawn from the account the following day and paid to Redwood Securities as brokerage fees.
  1. [119]
    On 10 May 2012, $47,000 was transferred to the Kurisummoottil account from the Macquarie account of J Sherlock (count 44). On the same day $24,189.45 was paid to Redwood Securities as brokerage fees. On 11 May 2012 $16,000 was paid to Michael Sherlock for mentoring fees. On 29 May 2012, $50,000 was deposited to the Macquarie account of Kurisummoottil. These funds were transferred from the account of M Investments Pty Ltd. The funds to make this transfer had come from Demetriou who had deposited $150,000 into his Macquarie account on 10 May 2012 and which had been transferred to M Investments on 28 May 2012.
  1. [120]
    With respect to count 47, on 28 May 2012, $55,856.04 was transferred to an ANZ Bank account of Merryside Pty Ltd, a company controlled by Barlow and Michael Sherlock. On 31 May 2012, $450,000 was transferred from the Macquarie account of Stone Cold Pty Ltd as trustee for the Zini Superfund (Zenonos) into the Macquarie account of Kurisummoottil (count 48). The funds were mostly sourced from the FP account of Stone Cold as $300,000 was transferred to that account on 30 May 2012.
  1. [121]
    Regarding count 48, on the same day the $450,000 was transferred from Kurisummoottil’s Macquarie account to the ANZ Bank account of Nameless Pty Ltd (Michael Sherlock). This basically paid out funds that Michael Sherlock had been informed were held on his behalf by Redwood Securities.
  1. [122]
    On 12 June 2012, $100,000 was transferred to the account of Kurisummoottil from the Macquarie account of Paul Parker. Paul Parker had transferred $100,000 into his Macquarie account on 30 May 2012. The transfer to Kurisummoottil was described on the statement of account for Parker as “trading transfer” (count 50).
  1. [123]
    The $100,000 was dispersed from the Kurisummoottil account on 14 June 2012 with $40,000 and $60,000 being transferred to Westpac Bank accounts controlled by Zenonos.
  1. [124]
    On 2 July 2012 $63,700 was transferred into the account of Kurisummoottil from the Macquarie account of Ajit Viswalingam (count 52). Viswalingam deposited $79,000 into his Macquarie account in March 2012. On 7 June 2012, $75,000 of these funds were transferred to an FP account in his name.
  1. [125]
    On 28 June 2012, $60,000 was returned from the FP account into the Macquarie account. This ensured there were sufficient funds to make the deposit into the account of Kurisummoottil. Viswalingam continued to receive statements from Redwood Securities claiming the balance of his investment exceeded $100,000.
  1. [126]
    With respect to count 53, on the same day as the funds were transferred into the account of Kurisummoottil $60,000 was transferred to another Westpac account controlled by Zenonos. In July 2012 Marcus Barlow decided to close his account with Redwood Securities. There was only $134,000 held on his behalf. On 11 July 2012 $161,260.29 was transferred from the Kurisummoottil account to the Macquarie account of Barlow so he could be paid out. In order for there to be sufficient funds for this to occur on 11 July 2012 $120,000 was transferred from the Zenonos account of Stone Cold (count 55) and $39,000 was paid by GMS to the Macquarie account of Kurisummoottil (count 54).
  1. [127]
    Total brokerage of $152,198.03 was paid from Mathew’s accounts to Redwood Securities. The loss to Dr Mathew and his entities was $716,003.83.

Justin Sherlock and M Investments (Qld) Pty Ltd[124]

  1. [128]
    Justin Sherlock had been an investor since 2010. According to his statement he claims the following amounts were invested:
  1. (a)
    J Sherlock - $39,000;
  1. (b)
    M Investments (Qld) Pty Ltd - $65,000; and
  1. (c)
    J and S Sherlock Superfund - $79,000;

Total - $183,000.

There is evidence in the Macquarie account for the J and S Sherlock Superfund that there were deposits to an account in that name of about $79,000 in the period April to June 2012. There is no evidence of the other two deposits.

  1. [129]
    Sherlock was in receipt of the following funds paid to his Commonwealth Bank account from the Macquarie accounts of other clients of the defendant:
  1. (a)
    24 November 2010 – $6,000 – Burdon’s Superfund (count 3)
  1. (b)
    16 June 2011 – $14,295.73 – Nanazel Superfund (Kilvert) (count 5)
  1. (c)
    11 August 2011 – $50,000 – V Pavlou (count 12)
  1. (d)
    11 August 2011 – $175,000 – Zini Superfund (Zenonos) (count 11)
  1. (e)
    Total $245,295.73.

It is not known why Sherlock was paid these funds which were in excess of the investment he claims to have made up until the end of 2011. Amongst the material Mr Sherlock provided to the Police was a copy of an MF Global statement in his name dated 29 August 2011. It shows that in excess of $360,000 was held on his behalf. MF Global went into administration in late 2011 and any funds held in that business were frozen. The Macquarie account of M Investments was almost inoperative since March 2011. From 19 January 2012 the accounts began to be used by the defendant as accounts from which he would transfer funds from one client’s account to another and to Redwood as follows:

  1. (a)
    On 19 January 2012 he transferred $68,881.08 from Apolakiatis Macquarie accounts (count 26).
  1. (b)
    On 24 January 2012 $68,911.68 was transferred to the Westpac account of Redwood Securities described as “M Investments (Q) Nov transfer”. The deposit of this sum allowed the accused to withdraw $40,000 as distributions for himself and Monahan and to pay $14,513.20 to Redwood’s creditors.
  1. (c)
    On 29 March 2012 $90,000 was transferred from the account of Burns (count 37). The Burns had invested $100,000 which they had borrowed against their home. The funds were deposited to their account on 14 March 2011. None of their funds were ever invested on their behalf and they withdrew the $10,000 to repay their loan accounts. The $90,000 was withdrawn on the M Investments account as follows:
  1. (i)
    30 March 2012 – $11,195.05 – Christos Thomas
  1. (ii)
    30 March 2012 – $10,000 – Apolakiatis
  1. (iii)
    30 March 2012 – $21,395.50 – Redwood Securities (Demetriou)
  1. (iv)
    10 April 2012 – $37,875.26 – Demetriou
  1. (v)
    11 April 2012 – $9,500 – Apolakiatis

Total – $89,965.81

  1. (d)
    It is unknown what the funds transferred to Christos Thomas related to. The two sums paid to Apolakiatis were deposited to a Macquarie account in his name and appear to have been used for him to make payments for his own benefit. The $21,395.50 was paid directly to the account of Redwood Securities, whereas the payment of $37,875.26 was paid to Demetriou’s Macquarie account and on 11 April 2012 that sum was withdrawn and paid to Redwood Securities as brokerage fees.
  1. (e)
    On 17 April 2012 $65,000 was transferred from the Macquarie account of GMS into the account (count 41) and was dispersed on 18 April 2012 with $19,000.04 being transferred to the Macquarie account of C Barry and $46,000.31 transferred to the Macquarie account of Paul Gedoun Construction and Development Pty Ltd. During March 2012 the FP account of Gedoun had been realised and $64,354.40 paid to Gedoun. On 19 April 2012 the Macquarie account was closed and $46,079.70 was paid to Gedoun.
  1. (f)
    On 19 April 2012 $100,000 was transferred from the Macquarie account GMS to the account (count 42). This sum was dispersed on the following day as follows:
  1. (i)
    C Zenonos - $30,000;
  1. (ii)
    Wendshel No 13 - $30,000;
  1. (iii)
    The defendant - $40,000;
  1. (g)
    On 27 April 2012 $16,978 was deposited to the M Investments accounts from the Macquarie account of Zini Superfund (Zenonos) (count 43). $16,975.48 was withdrawn from the M Investments account on the same day and paid to the Gilbride Management account.
  1. (h)
    On 10 May 2012 $40,000 was withdrawn from the Superannuation Funds account of Apolakiatis and paid to M Investments (count 45). On the same day $40,000 was withdrawn from the M Investments account and paid to Zenonos.
  1. (i)
    Also on 10 May 2012 $70,000 was transferred to the Macquarie account from SAT Superfund (Steven Tapsall) (count 44). The majority of the $70,000 was distributed from the account on 10 May 2012 with $30,328.37 being paid to Redwood Securities as brokerage fees and $20,000 being paid to Wendshel No 13 (Solomon). The $30,328.37 paid to Redwood Securities was partly utilised to make a $60,000 distribution to the defendant and Mr Monahan.
  1. (j)
    On 23 May 2012 a further $12,000 was transferred from the M Investments account and paid to the National Bank account of Tony Porter. This payment was described as “May transfer”.

(k)On 10 May 2012 Demetriou paid $150,000 to the Macquarie Bank account of the Tsiakos Super. These funds were withdrawn from the account on 28 May 2012 with the notation “trading transfer”. They were in fact transferred to M Investments (count 46). The funds were dispersed from M Investments as follows:

  1. (i)
    28 May 2012 – Apolakiatis – $50,000;
  1. (ii)
    29 May 2012 – Kilvert – $4,000;
  1. (iii)
    29 May 2012 – Kurisummoottil – $50,000;
  1. (iv)
    29 May 2012 – Kinghorn – $2,500;
  1. (v)
    31 May 2012 – Behouz Bahrimi – $5,953.85;
  1. (vi)
    4 June 2012 – Christos Thomas – $4,500;
  1. (vii)
    5 June 2012 – Christos Thomas – $4,500;
  1. (viii)
    8 June 2012 – Redwood Securities – $29,598.90

Total – $151,052.75.

(l)Sherlock also operated an account in the name of J and S Sherlock Superfund with Macquarie. Between April and 3 May 2012, almost $48,000 was paid to the account by Sherlock. With respect to count 39, on 10 April 2012 $4,978 was transferred from the account described as “trading transfer” into the account of Kurisummoottil. $4,977.09 was withdrawn from that account the following day and paid to Redwood Securities as brokerage fees.

(m)With respect to count 44, on 10 May 2012 $47,000 was transferred from the account described as “trading transfer” into the account of Kurisummoottil. On the same day $24,189.45 was paid from Kurisummoottil to Redwood Securities as brokerage fees. This sum and $30,328.37 paid to the Redwood Securities account from the M Investments account were utilised to make a $60,000 distribution to the defendant and Mr Monahan. On 11 May 2012, $16,000 was paid to Michael Sherlock for mentoring fees.

(n)Total brokerage of $150,434.45 was paid from M Investments account to Redwood Securities. The J and S Sherlock Superfund gained a benefit of $180,451.73 and M Investments gained $161,359.09 with much of that gain being paid to Redwood Securities as brokerage fees.

The Two Eagles Pty Ltd[125]

  1. [130]
    The Two Eagles Pty Ltd opened an account managed by the defendant in June 2010. These funds were provided primarily by Mr Monahan’s wife and her father. The initial deposit was $375,000. It would appear from the Macquarie Bank’s statements of account that there were initially acts of trading in securities with the funds in the account. The first transaction involved funds transferred to the Macquarie Bank account of Barlow. In late August to Early September 2010 there was a selling down of the investment securities of Barlow.
  1. [131]
    As to count 1, the defendant transferred $21,665 from the Macquarie Bank account of the Two Eagles Pty Ltd into Barlow’s account on 2 September 2010 so that when the equities were realised the balance of Barlow’s account totalled $215,348.43. Without this sum from Two Eagles Pty Ltd the investment would have been in a loss situation.
  1. [132]
    As to count 2, on 30 September 2010, $60,145 was transferred to the Macquarie Bank account of CL Platinum. These funds were dispersed from the account of CL Platinum in 12 withdrawals of $5,000 to Letitia Vitale between 7 and 28 October 2010.
  1. [133]
    As to count 4, on 28 January 2011 $69,985.32 was transferred to the Macquarie account of CL Vitale Superfund. During 2011 Two Eagles Pty Ltd legitimately withdrew funds from the Macquarie Two Eagles account. $120,000 was withdrawn on 28 February 2011, $20,625 on 18 May 2011 and $30,000 on 26 July 2011, thereby decreasing the funds under the control of the defendant to around $200,000. In November 2011 Two Eagles Pty Ltd redeemed the majority of funds the defendant claimed he held on their behalf. On 4 November 2011 the defendant transferred $135,000 from the Macquarie account of Kurisummoottil Pty Ltd (Joseph Mathew) – count 17, and $100,000 from the Macquarie account of Kylie Deane to the Macquarie account of Two Eagles Pty Ltd (Count 16). On 7 November 2011 $242,000 was transferred out of the Macquarie account into a Westpac account of the Monahans. Although there were brokerage fees paid out of the account, there were no deposits made into the Westpac account at Redwood Securities.
  1. [134]
    The Two Eagles Pty Ltd gained a benefit of $83,204.68.

Christopher Zenonos and Stone Cold Pty Ltd[126]

  1. [135]
    Zenonos became an early client of the defendant in December 2009. Stone Cold already had two Macquarie accounts opened and the defendant was authorised to operate on these in 2009.
  1. [136]
    On 4 July 2011 $86,000 was transferred form the Macquarie account of Nameless Pty Ltd (Michael Sherlock) into the FP account of Stone Cold. On 28 June 2011 the following funds were taken from other clients’ accounts and deposited to the FP account of Nameless Pty Ltd:
  1. (a)
    GMS Group - $86,000;
  1. (b)
    Kinghorn Family Trust - $100,000;
  1. (c)
    Kilvert - $100,000;

Total - $286,000.

  1. [137]
    On 29 June 2011, $154,419.55 was deposited to M Sherlock’s Macquarie account and $327,201.95 was deposited to the Macquarie account of Nameless Pty Ltd by FP. As at 4 July 2011 there were considerable funds in the Macquarie account of Nameless Pty Ltd and then the defendant transferred $86,000 from this account into the FP account of Stone Cold. As to count 11, on 11 August 2011, $175,000 was transferred from the Macquarie account of Stone Cold along with $50,000 from the Pavlou account to the Commonwealth Bank account of Justin Sherlock for the return of his investment funds.
  1. [138]
    In the documents obtained from Zenonos there are a number MF Global Singapore statements of account for account number: SQ1909 in Zenonos’ name which are dated August 2011. These show that there was in excess of $600,000 of his funds invested with that company. That company went into administration in November 2011 and the funds were frozen. Records from MF Global in Singapore show that the SQ1909 account was in the name of Fuan Chee Fung of Singapore and the monthly statement for August 2011 indicated cash balances of $2,453.22USD and $40,000SGD. The statement provided by the defendant to Zenonos dated August 2011 showed carried forward cash balances of $400,000USD and $197,093.63AUD. It would seem that no funds were invested on Zenonos’ behalf with MF Global.
  1. [139]
    On 1 November 2011 the defendant transferred funds from the following clients’ Macquarie accounts into an account with FP in the name of Zenonos (Stone Cold):
  1. (a)
    Adam Kilvert - $500,000 (count 13);
  1. (b)
    J Mathew - $270,000 (count 14);
  1. (c)
    Kurisummoottil Pty Ltd - $57,000 (count 15).

$700,000 was transferred from FP to the Macquarie account of Stone Cold on 4 November 2011.

  1. [140]
    With respect to count 18, on 8 November 2011, there were two transfers from Stone Cold’s Macquarie account, i.e. $238,000 and $268,000, were transferred to the Macquarie accounts of Burdon. The bulk of the funds in Burdon’s Macquarie account were returned to him on 9 November 2011. On 18 November 2011, Zenonos was advised by email by the defendant that the following funds were held by him:
  1. (a)
    Cash Macquarie account - $307,159.85;
  1. (b)
    Term deposit Macquarie - $506,000;
  1. (c)
    Funds invested with FP - $280,929.34;

Total - $1,094,089.19.

The funds held in cash in Macquarie and the funds with FP were correct but there were no funds held in the term deposit. The $506,000 in fact represented funds transferred to Burdon.

  1. [141]
    On 7 December 2011, $241,000 was transferred from the Macquarie account of GMS to an FP account in the name of Stone Cold. On 21 December 2011, $20,179.03 was transferred from the Macquarie account of Khakh to the Westpac Bank account in the name of Zenonos (count 25). It was described in the Macquarie records of Khakh as “RWS transfer”. On 24 January 2012 a further $240,096.32 was transferred from the Macquarie account of GMS to an FP account in the name of Stone Cold. On 20 April 2012 the defendant transferred $30,000 from the Macquarie account of M Investments (J Sherlock) to the Westpac Bank account in the name of Zenonos.
  1. [142]
    With respect to count 43, on 27 April 2012, $16,978 was transferred to the M Investments account from the Macquarie account of Stone Cold. $16,975.48 was withdrawn from the M Investments account on the same day and paid to the Gilbride Management account. On 10 May 2012, $40,000 was withdrawn from the superannuation funds account of Apolakiatis and paid to M Investments. On the same day $40,000 was withdrawn from the M Investments account and paid to Zenonos. There was a still an amount held in the Macquarie account of Stone Cold following the deposit of funds to the account in November 2011 even though sums had been taken in brokerage fees and paid to Redwood Securities. On 30 May 2012 $300,000 of the funds held with FP which had been contributed from GMS were returned to the Macquarie account.
  1. [143]
    With respect to count 49, on 31 May 2012, $450,000 was transferred from the Macquarie account and into the account held with Macquarie of Kurisummoottil (Mathew). On the same day the $450,000 was transferred from Kurisummoottil’s Macquarie account to the ANZ Bank account of Nameless Pty Ltd (Michael Sherlock). On 12 June 2012, $100,000 was transferred to the account of Kurisummoottil from the Macquarie account of Paul Parker. Parker had transferred $100,000 into the Macquarie account on 30 May 2012. The transfer to Kurisummoottil was described in the statement of account for Parker as “trading transfer”. The $100,000 was dispersed from the Kurisummoottil account on 14 June 2012 with $40,000 and $60,000 being transferred to two Westpac Bank accounts controlled by Zenonos. Among records delivered to the Police in 2013 there were FP market statements for these two accounts dated 6 June 2012. The Zen account involving the defendant and Zenonos was shown as having an equity of $554,941 and the AS SM CZ account with Zenonos and Solomon had an equity of $194,491.
  1. [144]
    On 2 July 2012, $63,700 was transferred into the account of Kurisummoottil from the Macquarie account of Ajit Viswalingam. On the same day $60,000 was transferred to another Westpac account controlled by Zenonos (transaction 63). On 9 July 2012, $150,000 was transferred into the account of Stone Cold. As to count 55, on 11 July 2012, $120,000 was transferred from the account to the Macquarie account of Kurisummoottil. On 11 July 2012, $160,260.29 was transferred from the Kurisummoottil account to the Macquarie account of Barlow to pay him out. Total brokerage of $120,042.84 was paid from Zenonos’ accounts to Redwood Securities.
  1. [145]
    The loss/profit to Zenonos/Stone Cold is difficult to determine but the gain is estimated to be $376,297.35[127].

Steven Tapsall[128]

  1. [146]
    Mr Tapsall became involved with the defendant following a holiday to China in October 2011 with he and Zenonos. Tapsall had a superannuation portfolio of about $120,000 invested in securities and $70,000 invested in an account with the Macquarie Bank. The defendant was authorised to operate on both accounts.
  1. [147]
    As to count 45, on 10 May 2012, the defendant transferred $70,000 from the Macquarie account to the Macquarie account of M Investments. The majority of the $70,000 was dispersed from that account on 10 May 2012 with $30,328.37 being paid to Redwood Securities as brokerage fees and $20,000 being paid to Wendshel No 13 (Solomon). The $30,328.37 paid to Redwood Securities was partly utilised to make a $60,000 distribution to the defendant and Mr Monahan. On 23 May 2012 a further $12,000 was transferred from the M Investments account and paid to the National Bank account of Tony Porter. This payment was described as “May Transfer”.
  1. [148]
    No brokerage was paid from Tapsall’s account to Redwood Securities. His loss is $70,000.

Sue and Reg Palmer[129]

  1. [149]
    The Palmers were directors of the Oniviro Super Pty Ltd fund which was established to manage their self-managed superfund. In November 2011 they set up a Macquarie account in the company name and between then and February 2012 deposited about $500,000 into the account. They were introduced to the defendant by Mr Monahan. The accused was authorised to operate their Macquarie and FP accounts. On 14 March 2012, $150,000 was transferred from the Macquarie account to the FP account as agreed.
  1. [150]
    As to count 33, on 14 March 2012, $10,000 was transferred from the Macquarie account to the Macquarie account of Gibbs, Hurley and Co Pty Ltd (Andrew Gibbs).
  1. [151]
    As to count 38, on 4 April 2012, $312,000 was transferred from the Macquarie account to the Macquarie account of GMS. This deposit resulted in the GMS funds being $319,708.93. During the period 17 April 2012 to 11 July 2012 the bulk of the funds in that account were dispersed as follows:
  1. (a)
    17 April 2012 - $65,000 to Macquarie account of M Investments Pty Ltd (T Sherlock);
  1. (b)
    19 April 2012 - $100,000 to Macquarie account of M Investments Pty Ltd (T Sherlock);
  1. (c)
    27 April 2012 - $100,000 to FP account in the name of GMS;
  1. (d)
    11 July 2012 - $39,000 to Macquarie account of Kurisummoottil (Mathew).
  1. [152]
    The $65,000 deposited to M Investments was dispersed on 18 April 2012 with $19,000.94 being transferred to the Macquarie account of C Barry and $46,000.31 transferred to the Macquarie account of Paul Gedoun Construction and Development Pty Ltd.
  1. [153]
    In March 2012 the FP account of Gedoun was realised and $64,354.40 was paid to Gedoun. On 19 April 2012 the Macquarie account was closed and $46,079.70 was paid to Gedoun. The $100,000 paid to M Investments on 19 April 2012 was dispersed on 20 April 2012 as follows:
  1. (a)
    Zenonos - $30,000;
  1. (b)
    Wendshel No 13 (Solomon) - $30,000;
  1. (c)
    The defendant - $40,000.
  1. [154]
    As to count 39, on 10 April 2012, $25,531 was transferred from the Macquarie account of Oniviro to the Macquarie account of Kinghorn. On the following day $25,531.60 was transferred from the account of Kinghorn to the Westpac account of Redwood Securities as brokerage fees. The funds were partly used to make a $40,000 distribution to the defendant and Mr Monahan.
  1. [155]
    Total brokerage of $8,572.77 was paid from Oniviro’s account to Redwood Securities. The loss was $347,531.

Russel Kinghorn[130]

  1. [156]
    Mr Kinghorn had two accounts managed by the defendant. The first was in the name of the Kinghorn Superfund (KSF) the trustee of which was Greenking Pty Ltd and the second was the Kinghorn Family Trust (KFT) the trustee of which was Kinghorn Holdings Pty Ltd. Mr Kinghorn invested $100,000 through KSF in September 2010 and $350,000 through KFT in mid-2011. The funds were paid to FP accounts opened in the two companies’ names. He redeemed the funds held in the two FP accounts after the discovery of the fraud and received $68,926.97 from funds held by KSF and $73,306.36 from funds held by KFT. Mr Kinghorn did not have electronic access to the Macquarie accounts.
  1. [157]
    The first transaction occurred on 22 June 2011; $200,000 was transferred from the FP account of KFT to its Macquarie account and $50,000 was transferred from the FP account of KSF to its Macquarie account. On 28 June 2011 a further $98,527.29 was transferred from the FP account of KFT to its Macquarie account.
  1. [158]
    With respect to counts 9 and 10, on 28 June 2011, the following transfers were made from the two Macquarie accounts to the following FP accounts;
  1. (a)
    KFT - $100,000 to Nameless Pty Ltd (M Sherlock);
  1. (b)
    KFT - $99,000 to M Sherlock;
  1. (c)
    KSF - $49,026 to Barlow.
  1. [159]
    On 5 July 2011 the $100,000 and the $49,026 were returned to the accounts from the Macquarie accounts of the same clients (Nameless and Barlow) who were the recipients of the funds. In the period between 28 June 2011 and 5 July 2011 sums had been transferred to the respective accounts from FP. The funds were not repaid from M Sherlock although a large sum had been similarly received from FP at the time.
  1. [160]
    The net result of these transactions was that there was a shortfall of $99,000 in the KFT funds.
  1. [161]
    With respect to count 30, on 16 February 2012, the defendant transferred $2,997.27 to the Macquarie account of Demetriou and $1,411.46 to the Macquarie account of Khakh Trading from the KFT account. The reason for these transfers was to ensure that the two accounts had sufficient funds so that brokerage could be paid from both accounts to Redwood Securities. On 17 February 2012, $6,995.08 was paid to Redwood Securities from Demetriou’s account and $1,411.16 paid from Khakh’s account.
  1. [162]
    As to count 34, on 14 March 2012, $14,627.01 was transferred from the KFT account to the Macquarie account of Demetriou and on the following day $14,627.34 was paid to Redwood Securities as brokerage.
  1. [163]
    On 10 April 2012 the defendant transferred $25,531 into the KFT Macquarie account from the Macquarie account of Oniviro (Palmer) (count 39). On the following day $25,531.60 was transferred from the same account to Redwood Securities for brokerage fees. On 10 May 2012 the defendant transferred $5,000 into the KFT Macquarie account from the Macquarie account of Burdon (count 44). On the same day $5,013.78 was transferred from the same account to Redwood Securities as brokerage fees. On 29 May 2012 the defendant transferred $2,500 into the KFT Macquarie account from the Macquarie account of M Investments. On the same day $2,415.92 was transferred from the same account to Redwood Securities as brokerage fees.
  1. [164]
    Total brokerage of $112,986.11 was paid from Kinghorn’s account to Redwood Securities. Kinghorn’s two funds lost a total of $85,004.74.

Ajit Viswalingam[131]

  1. [165]
    Mr Viswalingam commenced using the defendant’s services in March 2012. He deposited $79,000 to the Macquarie account established in his name. The funds remained in the account until 7 June 2012 when $75,000 was transferred to FP. On 28 June 2012 $60,000 was returned to the Macquarie account from FP.
  1. [166]
    As to count 52, on 2 July 2012, $63,700 was transferred from the Macquarie account into the account of Kurisummoottil. On the same day as the funds were transferred into the account of Kurisummoottil, $60,000 was transferred to another Westpac account controlled by Zenonos. Viswalingam redeemed $9,727.06 from FP.
  1. [167]
    Brokerage of $955.44 was paid from Viswalingam’s account to Redwood Securities. The net loss was $63,700.

Paul Parker[132]

  1. [168]
    Mr Parker invested $100,000 with the defendant on 30 May 2012. As to count 50, the funds were withdrawn from his Macquarie account on 12 June 2012 and transferred to the Macquarie account of Kurisummoottil. The $100,000 was disbursed from Kurisummoottil’s account on 14 June 2012 with $40,000 and $60,000 being transferred to two Westpac Bank accounts controlled by Zenonos. Zenonos claims that these funds were distributions from two trading accounts the defendant had set up independent of Redwood Securities. No brokerage was paid from Parker’s account to Redwood Securities. Parker lost his entire $100,000 investment.

Kieran and Susan Burns[133]

  1. [169]
    The Burns’ were introduced to the defendant through Mortgage Choice and borrowed $100,000 through that company, secured by their home, for the defendant to invest on their behalf. The $100,000 was deposited to their Macquarie account on 14 March 2012. As to count 37, on 29 March 2012, $90,000 was transferred to the account of M Investments. The $90,000 was withdrawn from the M Investments account as follows:
  1. (a)
    30 March 2012 - $11,195.05 to Christos Thomas;
  1. (b)
    30 March 2012 - $10,000 to Mr Apolakiatis;
  1. (c)
    30 March 2012 - $21,395.50 to Redwood Securities (Demetriou);
  1. (d)
    10 April 2012 - $37,875.26 to Demetriou;
  1. (e)
    11 April 2012 - $9,500 to Apoloakiatis;

Total - $89,965.81.

  1. [170]
    It is unknown what the funds to Mr Christos Thomas related to. The two sums paid to Mr Apolakiatis were deposited to a Macquarie account in his name and appear to have been used for him to make payments for his own benefit. The $21,395.50 was paid directly to the account of Redwood Securities, whereas the payment of $37,875.26 was paid to Demetriou’s Macquarie account and on 11 April 2012 that sum was withdrawn and paid to Redwood Securities as brokerage fees. No funds were ever invested on behalf of the Burns’.
  1. [171]
    Brokerage of $476.20 was paid from the Burns’ account to Redwood Securities. The Burns’ lost $90,000.

Timothy Sherlock[134]

  1. [172]
    Mr Timothy Sherlock deposited $40,000 into a Macquarie account on 7 October 2011. At the time the offences were discovered the balance of the account of $4,138.72. No funds had been invested by the defendant. Instead, $18,830.17 was withdrawn from the account as brokerage fees paid to Redwood Securities and $18,213.45 was paid from the account to the accounts of other clients.
  1. [173]
    The brokerage fees paid to Redwood Securities were as follows:
  1. (a)
    16 December 2011 (count 23) - $11,061.33;
  1. (b)
    7 February 2012 (count 28) - $4,169.42;
  1. (c)
    17 February 2012 (count 31) - $3,319.87;
  1. (d)
    19 Marhc 2012 (GST) (count 36) - $279.55;

Total - $18,830.17.

  1. [174]
    As to count 25, on 20 December 2011 $10,000 was transferred from the Macquarie account to the Gisana account of Kilvert. At the time of the deposit the Gisana account only had $11.30 in the account. On 21 December 2011, $4,971.08 was paid from the Gisana account to Redwood Securities as fees. On 7 February 2012 further fees of $2,205.18 were paid to Redwood Securities. On 16 February 2012, $776.92 was paid to the Gisana account from the Burdon SuperFund Macquarie account. The following day $3,637.97 was paid to Redwood Securities. This reduced the account to a zero balance.
  1. [175]
    As to count 32, on 12 March 2012, there were two transfers made from Timothy Sherlock’s account made to FP. $696.47 was transferred to the trading account of Khakh and $2,736.08 to the trading account of Kilvert.
  1. [176]
    As to counts 35 and 40, further funds were transferred from Timothy Sherlock’s Macquarie account to the Gisana account, namely $2,736.08 on 14 March 2012 and $2,045 on 10 April 2012. The day following each of these deposits fees of $2,736.08 and $2,044.30 respectively were paid to Redwood Securities.
  1. [177]
    Total brokerage of $18,830.17 was paid to Redwood Securities and these funds were utilised to make payments to creditors at the business and to make distributions to the defendant and Mr Monahan. Timothy Sherlock lost $18,213.63.

Michael Sherlock[135]

  1. [178]
    Mr Sherlock operated accounts with Redwood Securities under his own name and under the company name Nameless Pty Ltd as trustee for the Sherlock Superfund. The majority of the investments were made through the company. Michael Sherlock had a sum of around $1,000,000 invested through the defendant. Nameless Pty Ltd opened a Macquarie account in March 2010 with an initial deposit of more than one million dollars. Much of this was invested with Pension Financial and there were regular transfers between Macquarie and Pension Financial accounts during 2010. In August 2010 the investment broker was changed to First Prudential and $900,000 was transferred to that company. There is a document located by Police which purports to be an FP Markets statement of account as at 31 January 2011. It shows that the value of funds held on behalf of Nameless Pty Ltd was $935,035.79. Also in documents located there are emails in which Michael Sherlock advised the defendant that the $910,000 was needed to effect a property settlement and the advice from the defendant was that the funds were sent to Michael Sherlock’s solicitors on 17 February 2011. On 11 May 2011 there was a payment of $15,000 made to Michael Sherlock’s ANZ Bank account from the Macquarie account of Kurisummoottil. This payment was described as “mentoring” and there were emails suggesting that Michael Sherlock was giving guidance to the defendant on business related activities for which he was paid a fee. On 28 June 2011 there were a series of transfers from the Macquarie accounts of a number of clients to the FP accounts of Michael Sherlock and Nameless Pty Ltd as follows:
  1. (a)
    Kinghorn Family Trust - $99,000 to Michael Sherlock (count 9);
  1. (b)
    GMS - $86,000 to Nameless Pty Ltd (count 8);
  1. (c)
    Kinghorn Family Trust - $100,000 to Nameless Pty Ltd (count 9);
  1. (d)
    Gisana Pty Ltd (Kilvert) - $100,000 to Nameless Pty Ltd (count 7);

Total - $385,000

  1. [179]
    On 29 June 2011, $327,201.95 was returned by FP to the Macquarie account of Nameless Pty Ltd and $154,419.55 was returned by FP to the Macquarie account of Michael Sherlock. On 4 July 2011, $86,000 was transferred from the Nameless Pty Ltd Macquarie account to FP and applied to the account of Stone Cold (Zenonos). On 5 July 2012, $100,000 was transferred from the Nameless Pty Ltd account to FP and applied to the account of Kinghorn Family Trust. These two transfers were described in the Macquarie statements as “FP transfer”. The defendant transferred two sums to Michael Sherlock. The first occurred on 29 May 2012 when $55,856.04 was transferred to an ANZ Bank account of Merryside Pty Ltd (count 47). This company was controlled by Barlow and Michael Sherlock. These funds came from $50,000 deposited to the Macquarie account of Kurisummoottil. These in turn had been transferred from the account of M Investments Pty Ltd. The funds used to make this transfer had come from Demetriou who had deposited $150,000 into his Macquarie account on 10 May 2012 and which had been transferred to M Investments on 28 May 2012.
  1. [180]
    On 31 May 2012 there was a further transfer of $450,000 made from the Macquarie account of Kurisummoottil to the ANZ Bank account of Nameless Pty Ltd (count 49). The funds to make this transfer came from a $450,000 transfer from the Macquarie account of Stone Cold Pty Ltd as trustee for the Zini Superfund (Zenonos). The funds were mostly sourced from the FP account of Stone Cold as $300,000 was transferred to that account on 30 May 2012. The $450,000 transfer paid out the funds that Michael Sherlock had been informed that Redwood Securities held on his behalf. Brokerage of $86,574.14 was paid from Michael Sherlock’s accounts to Redwood Securities.
  1. [181]
    It is difficult to determine the actual profit but it was substantial, at least $665,000 made by Michael Sherlock[136].

Andrew Pavlou[137]

  1. [182]
    Andrew Pavlou joined Redwood Securities in mid-2011. He and his father had a superannuation fund called Pavlou Superfund. Prior to joining Redwood Securities the fund was administered by Ord Minnett and had a portfolio of investments of more thant $300,000. The portfolio was transferred to a Pension account (who are brokers that the defendant was using at the time). The portfolio was realised and funds were deposited to the Macquarie account of Pavlou. On 20 September 2011, $254,494.28 was deposited to the Macquarie account.
  1. [183]
    On 22 September 2011 the defendant transferred $250,000 from the Macquarie account to MF Global. As noted earlier, MF Global went into administration shortly thereafter and the funds were frozen. On 25 November 2011, $260,000 was transferred from the Macquarie account of Gikos Pty Ltd as trustee for the Tsiakos Superannuation Fund (Demetriou) and deposited into an account at FP in the name of Pavlou (count 20). On 28 November 2011, the funds were transferred to Pavlou’s Macquarie account and from there $261,612 was transferred to Pavlou’s Ord Minnett share trading account. On 6 December 2011 $9,395.80 was transferred from the Macquarie account of Charlie Demetriou as trustee for the Charlie Demetriou Family Trust to an FP account in the name of Pavlou (count 21). On 7 December 2011, $9,395.80 was transferred from the FP account to Pavlou’s Macquarie account and from there $9,473.67 was transferred to Pavlou’s Ord Minnett share trading account. This transaction closed the Macquarie account. No brokerage was paid from Pavlou’s account to Redwood Securities.
  1. [184]
    It is uncertain how much Pavlou received from the administrators of MF Global but at least $269,395.

Nicholas Pavlou[138]

  1. [185]
    Nicholas Pavlou had an investment account in the name of his wife Vanessa. He commenced to use the defendant’s services in mid-2011. The defendant sold down the equities portfolio held by Pavlou and as a result he had $312,479.60 transferred to a Macquarie account in the name of Vanessa Pavlou. $60,000 of this was returned to Pavlou on 11 August 2011 leaving a balance of $252,479.60. On the same day the defendant transferred $150,000 from the account to MF Global to establish an account for Pavlou. As to count 12, on 11 August 2011, the accused transferred $50,000 from the Macquarie account to the Commonwealth Bank account of Justin Sherlock. It is not known what this payment related to. As noted earlier, MF Global failed in about October 2011 and administrators were appointed and funds frozen.
  1. [186]
    In early 2011 $300,000 was returned to the Macquarie account of Mathews from FP. On 23 November 2011 the defendant transferred $285,464.84 from Mathew’s account to an FP account in the name of Pavlou (count 19). On 20 November 2012, $285,464.85 was paid by FP from the account of Pavlou to Pavlou’s Macquarie account. On the following day the balance of the funds in the Macquarie account, i.e. $329,930.98, was paid to Pavlou to close the account. Brokerage of $14,242.14 was paid from Pavlou’s account to Redwood Securities.
  1. [187]
    It is uncertain how much he received from the administrators of MF Global but the benefit appears to be $235,464.85.

Clint Dykstra[139]

  1. [188]
    Mr Dykstra was introduced to the defendant in about 2009 by Christopher Vitale of Mortgage Choice and borrowed $120,000 from Suncorp, secured against his home, for the accused to invest on his behalf. Share trading accounts and a Macquarie account were established. There was trading done on his behalf during 2010 and 2011. According to a withdrawal form, $30,000 was withdrawn in February 2011 leaving a balance of $120,000.
  1. [189]
    $70,000 was paid off Dykstra’s home loan in about June 2011. Adam Kilvert deposited $220,000 to a Macquarie account in the name of Gisana Pty Ltd as trustee for the Nanazel Superannuation fund No 2 on 31 May 2011. On 22 June 2011 the $70,000 used to pay off the home loan was transferred from Gisana’s Macquarie account to the Suncorp account of Clint Dykstra (count 6). Kilvert was sent a monthly portfolio report for January 2012 which showed that his investment portfolio was worth $149,627.04.
  1. [190]
    Dykstra benefitted by receiving the $70,000 back from Kilvert’s funds. There was no evidence of any brokerage fees being paid by Dykstra to Redwood Securities.

Other clients[140]

  1. [191]
    Caroline Jane Barry operated a Macquarie account. On 4 April 2012, $77,198.62 was transferred to the account from FP. On 18 April 2012 a further $19,004.04 was transferred to the account from a Macquarie account of M Investments (due to a transfer of $65,000 from GMS). Barry dispersed these funds. It is considered she gained a benefit of $19,000.04[141].
  1. [192]
    On 21 December 2011, $15,000 was transferred from the Macquarie account of Khakh to the Bank of Queensland account of Andrew Gibbs (GM Trust) described as “RWS transfer”.
  1. [193]
    Gibbs, Hurley and Co Pty Ltd operated a Macquarie account. On 14 March 2012, $10,000 was transferred to the account from the account of the Palmers. On the following day $10,000 was transferred to Gibbs Hurley. The company gained a benefit of $25,000 from the defendant’s actions[142].
  1. [194]
    Gilbride Management Pty Ltd operated a Macquarie account. On 27 April 2012, $16,975 was transferred to the M Investments account from the Macquarie account of Stone Cold. $16,975.48 was withdrawn from the M Investments accounts on the same day and paid to the Gilbride Management account. It is considered Gilbride gained a benefit of $16,975 from the defendant’s actions[143].
  1. [195]
    Paul Gedoun Construction and Development Pty Ltd operated a Macquarie account. On 17 April 2012, $65,000 was transferred from the Macquarie account of GMS into the M Investments account and on 18 April 2012 $46,000.31 transferred to the Macquarie account of Paul Gedoun Construction and Development Pty Ltd. In March 2012 the FP account of Gedoun had been realised and $64,354.40 paid to Gedoun. On 19 April 2012 the Macquarie account was closed and $46,079.70 paid to Gedoun. The company gained a benefit of $46,000.13[144].

Submissions

Defence submissions

  1. [196]
    The defence submitted that it was accepted that Exhibit 1, the emails, contained a confession and it was accepted that the defendant did not seek to blame anybody else for his conduct. As to the extent of criminality, it was submitted that it should be borne in mind that trading continued during the scheme. Whilst the defendant admitted to falsifying some brokerage statements and performance reports, that was still consistent with trading being conducted. The reason he conducted the falsifications was to make his clients happy which distinguishes this case from one involving pure greed. It was submitted that, as to his personal benefit, there was $40,000.00 paid to him and one should conclude that only the $2,112.00 and the $4,133.00 were attributable to him. It was submitted the Court should find that the flights of $6,020.89 and the Fiji beach resort payment of $17,424.15 were purely for Mr Monahan’s benefit. As to the brokerage fees of $265,000.00, it was submitted that they should be disregarded because trading was conducted and it was impossible to work out whether or not these were unlawfully earned. Ultimately, after discussion, it was accepted that whilst it could not be proved those fees were unlawfully derived, the fact is that it is relevant that the defendant continued to receive drawings totalling $265,000.00 at a time when significant losses were occurring.
  1. [197]
    It was further submitted that the Court would accept the defendant’s evidence over the evidence of prosecution witnesses and find that Mr Madhoji did not lie about his qualifications. It would further be accepted that Mr Madhoji was inexperienced and the relationship between Mr Monahan and he was one of disparity with Mr Monahan being the dominant one. Ultimately, it was submitted that the emails speak for themselves.

Crown submissions

  1. [198]
    The Crown submitted that as to the qualifications issue, the Crown witnesses should be preferred and the defendant’s evidence rejected. It would be accepted that the defendant lied about his qualifications. It was also submitted that whilst he may not have had sufficient experience, he told Mr Monahan he did and, as a result, was elevated to the role of director of Redwood Securities.
  1. [199]
    As to the practices and the procedures, it would be accepted that the complainant was trying to make improvements in this regard. It was accepted that the protocols were not good at the start but improvements were being made and despite that the defendant did his level best to circumvent these. It would be accepted that the defendant frustrated Ms Douglas and Mr Sharp.
  1. [200]
    As to the recording of transactions, it would be accepted the defendant took it upon himself to record information. He inhibited others from accessing relevant information (for example, Ms Croaker) which covered up the irregularities.
  1. [201]
    It was further submitted that no other people were involved in actively concealing the irregularities. The emails (Exhibit 1) confirm the dishonesty was by the defendant. Mr Monahan was not aware of the dishonesty.
  1. [202]
    As to the cause of the losses, even though MF Global collapsed it seems that money was recovered. The fact is the losses were due to the dishonest transactions and some clients suffered considerable losses. Otherwise were unjustly enriched. The total losses were in excess of $3.2 million.
  1. [203]
    As to the extent of benefit by the defendant, it would be accepted that the $40,000.00 was really for the defendant’s benefit. Also, he was able to maintain his employment and was able to continue earning a $265,000.00 brokerage fee despite the losses occurring.
  1. [204]
    As to whether this was a Ponzi scheme, the Crown conceded that it did not commence as one but had some hallmarks of such a scheme by the end. The Crown further submitted that the defendant’s equivocation concerning Exhibit 1 should not be accepted and it should not be accepted that threats were made by Mr Monahan. The emails between them were quite amicable.

Reply

  1. [205]
    By way of reply, Mr Ackerman, by reference to Mr Bennett’s concessions in cross-examination, submitted that one could not rely on Mr Bennett’s initial report and opinion concerning the alleged Ponzi scheme.

Onus of proof and standard

  1. [206]
    My findings of fact are made on the basis that the prosecution carries the onus of proof and the standard is that set out in s 132C of the Evidence Act.
  1. [207]
    I paid close regard to the evidence and this has greatly assisted me in determining matters of credit.
  1. [208]
    Overall I did not accept some parts of the defendant’s evidence. I did not accept his attempts to lessen the effect of exhibit 1 or his evidence that it was really Mr Monahan and others responsible for the figures of the business.
  1. [209]
    I do accept though that the defendant panicked after the MF Global freeze which lead to his “panicking” and engaging in a round robin with clients’ funds.
  1. [210]
    I generally accept Mr Monahan’s evidence but not all of it. For example I did not accept his denials as to the quantum of director’s fees paid to him.
  1. [211]
    As I noted when summarising the defendant’s evidence I found his evidence in many respects unconvincing.

Determinations on matters of fact

What the defendant told others as to his qualifications 

  1. [212]
    I prefer the evidence of Mr Monahan to that of the defendant on this point. I find that Mr Monahan’s evidence is supported by the evidence of Ms Richmond.
  1. [213]
    I find that the defendant did tell Mr Monahan that he had a Bachelor’s degree in Economics with Honours. This was not the position.
  1. [214]
    I find there were numerous requests made of the defendant to provide a copy of his degree which obviously was not forthcoming.
  1. [215]
    I also consider the defendant was inexperienced in this business. I consider that Mr Monahan knew this and provided him Mr Sharpe’s services to assist him. I do consider though that Mr Monahan’s view of the defendant’s ability was incorrectly strengthened by the lie concerning his qualifications.

Whether the procedures engaged in by the defendant were endorsed by others

  1. [216]
    It is my view on the totality of the evidence that the defendant engaged in his own procedures which were not properly monitored for compliance from Redwood Capital until Ms Mulders came on the scene.
  1. [217]
    It is my view of the evidence that once she came on the scene and conducted the audit she determined there were irregularities in the reconciliation process and determined it was necessary to have a second pair of eyes overlooking that process. My view of the evidence is that the defendant did frustrate that process because at that time he was aware he had been engaging in the frauds in respect of which he was convicted and did not want matters to be discovered.
  1. [218]
    It seems to me that the audit procedures prior to Ms Mulders’ involvement were grossly deficient in Redwood Securities.
  1. [219]
    I find that after Ms Mulders devised the new scheme the defendant was very resistant to the changes and did not comply with requests for information to be accessed. This is most likely in light of the fraudulent activity. I accept the evidence of Ms Croker, Mr Sharpe and Ms Mulders. I also find that the voluntary admissions made in Exhibit 1 (summarised later) supports my conclusions.

The way in which transactions were recorded and who compiled them

  1. [220]
    From the totality of the evidence before me it seems that the defendant’s personal assistants only had access to the trading accounts and the CMA. The defendant himself was the only one to have access to the term deposit accounts. The reconciliations were created by the assistants but depended heavily on information which the defendant provided which was, on occasions, false.
  1. [221]
    My findings of particular transactions are set out earlier in this judgment.
  1. [222]
    I prefer the evidence of Mr Monahan, Ms Croker and Mr Sharpe to that of the defendant on this point.
  1. [223]
    I consider the defendant gave false information to Ms Croker to cover his tracks.

Whether this was a Ponzi scheme

  1. [224]
    A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid into the scheme by subsequent investors rather than from any actual profit earned from monies invested. The scheme entices new investors by offering returns from legitimate investments which are abnormally high and consistent.

“The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever increasing flow of money from subsequent investors to keep the scheme going.”[145]

  1. [225]
    I do not consider this to be a Ponzi scheme in the traditional sense. I consider, on the totality of the evidence, that Redwood Securities was a legitimate investment company and certainly at the start it was intended that legitimate and lawful investments and trading would be engaged in. It seems to me that things significantly fell apart when MF Global in Singapore went into liquidation.
  1. [226]
    It seems to me the defendant became desperate and started using the capital of others to pay returns to other members who had invested with Redwood Securities. To that extent there are some similarities with a Ponzi scheme but I do not consider it to be a scheme such as was unlawful from its inception which involved dishonest advertising.
  1. [227]
    Mr Bennett conceded in cross-examination that there was still legitimate trading going on after October 2011.
  1. [228]
    I find that the scheme did have the hallmarks of a Ponzi scheme in light of the transactions I have discussed, but I accept what Ms Bundesen says in her report on this point.
  1. [229]
    Still though the conclusion cannot be escaped that significant frauds were committed by the defendant which have caused significant losses.

Whether others actively concealed the defendant’s dishonesty

  1. [230]
    I accept the evidence of the witnesses called by the prosecution. I do not consider they actively concealed his dishonesty. On the other hand, it seems to me that the lack of audit and compliance before late 2011 early 2012 was negligent. I find that prior to that time there were no adequate measures in place to ensure that officers of Redwood Securities were acting lawfully.
  1. [231]
    I generally accept Mr Monahan’s evidence over that of the defendant. I do not accept all of his evidence though. For example I prefer Ms Bundesen’s evidence over his denials that he received 60% of the distributions. He also had an expense paid for by credit card and approved personal expenses of the defendant.

Admissions made by the defendant

  1. [232]
    For the reasons I expressed earlier, I do not accept the defendant’s evidence that he was forced to write the emails the subject of Exhibit 1. I consider that the emails, the subject of Exhibit 1, were voluntary confessions made by the defendant and accurately set out the nature of the dishonesty involved in this case. I consider they were written out of remorse at the time.
  1. [233]
    A summary of the admissions made are as follows:

Email dated 18 July 2012 at 11.13am

  • He had been lying to his clients that their portfolios had been returning amounts well over of what was the true position.

  • He had been reporting fake brokerage figures to Mr Monahan.

  • He was ready and willing to cooperate fully and honestly. He had lost control and was not able to keep track of anything further.

  • He was happy to turn himself into the Police.

Email dated 18 July 2012 at 12.16pm

  • He had transferred funds from clients’ Macquarie accounts into another clients’ FP account and from that FP account back to the other clients’ CMA account.
  • If client A wanted cash and this was not available he transferred the cash in from another client’s account but did not transfer the amount from client A’s Macquarie CMA because that would show up on the Macquarie statement.
  • There had been occasions where he transferred from one client directly into another’s CMA.
  • He had used the Kurisummoottil CMA and the M Investments CMA as a hub for funds to flow through to other clients’ accounts.
  • He was able to keep this all from compliance and administration support staff as well as Mr Monahan because he fabricated internal spreadsheets.

Email dated 24 July 2014 at 7.44am

  • This conduct started within the first 12 months of the launch of Redwood Securities but the bulk of it was in the last 12 months, especially after MF Global “went down”.
  • The first account for which returns were fabricated was Michael Sherlock’s superannuation fund in about 2011.
  • The first major unauthorised transaction took place when Michael Sherlock instructed him to liquidate his superfund and transfer $900,000.00 to an account of his so he could purchase a property.
  • He fabricated the returns to make people think he was doing a good job for them. He received no personal financial benefit from this or any transactions.
  • He told a few clients who questioned where their money was that some of it was in a fictitious brokerage account which they did not have access to.
  • If he was asked where the balance of the funds were sitting he would say the client had a term deposit with Macquarie which the administration assistant could not see.
  • In June/July he fabricated a statement which showed false client balances.
  • When MF Global went bust in October 2011 he was overseas with clients at the time. Clients started asking whether their money was safe. He had emailed MF Global withdrawal requests for all client accounts in the two or three days prior to them “going under”. He received confirmation that MF Global had received the withdrawal requests but they could not transfer the funds in time before the liquidation.
  • He told all clients their money was safe and that they would get it back but he panicked and did not tell the truth. The transferring of funds spiralled out of control because both the Pavlou accounts wanted their funds back and he could not get it so he proceeded to take the funds from other clients’ accounts and transfer it to them. Paul Pavlou, Vanessa Pavlou, Andrew Burdon and Andrew Gibbs received amounts which they should not have. Additionally, Michael Sherlock and Justin Sherlock received additional funds on the back of fabricated returns.
  • Everything spiralled out of control.
  • The Macquarie bank statements and online bank statement were not reconciled prior to June 2012. All figures were entered manually by he or via his direct instruction into an Excel spreadsheet from which clients’ performance reports were generated.
  • He did not transfer monies to himself to live a lavish lifestyle, rather it had happened because he wanted to impress people.
  • He was working to try and find a resolution/restitution.

The loss suffered by the clients and the benefit received by the defendant

  1. [234]
    On the evidence the losses to a number of the customers amounts to $3,251,281.35.[146]
  1. [235]
    As to the cause of the losses there is no doubt that funds in MF Global in Singapore were frozen but some of that money was recovered. I find that the losses were due to the dishonest transactions engaged in by the defendant.
  1. [236]
    As to the benefit gained by the defendant I think in effect the $40,000 was a benefit to him.[147]The $2,112 to CBD Golf can be inferred to be for his benefit. I have preferred the evidence of Mr Monahan concerning the Fiji trip. I think then it is likely that the flight centre amount was likely to be for flights for the defendant. Indeed I note in one of the emails the subject of exhibit 1 he says that he had been overseas. As to the $17,424.15 I find that the defendant told Mr Monahan that he was staying his family’s suit and that the defendant paid for this to impress Mr Monahan. The withdrawals of $2,500 were for his benefit. The $4,133 was for his rent. I infer the $10,000 payment was also for his benefit. I note that in one of the emails (exhibit 15) that he paid for Hong Kong accommodation for some people around that time.
  1. [237]
    As to the $265,000 in drawings this is relevant as he was continuing to draw these monies when significant losses were being sustained by some clients.
  1. [238]
    The $265,000 was received from commissions charged to the clients.[148]It is impossible to work out whether any of these were unlawfully derived.
  1. [239]
    I also find that Mr Monahan received distributions of $354,534.[149]
  1. [240]
    It is clear that due to the crediting of some funds and the payout by MF Global a number of clients have “double dipped” and have been unjustly enriched. It seems to me that some action should be taken by the receivers/administrators and/or the authorities[150]regarding the recovery of overpaid monies. In particular there are concerns about payments made to Michael Sherlock and Nameless Pty Ltd, Justin Sherlock, Stone Cold Pty Ltd, Andrew Burdon and the Pavlous.
  1. [241]
    I also note that it would seem unjust if the $814,585.78 was distributed proportionally in light of the evidence[151]. It would seem to me there is a prima facie case of unjust enrichment.

Conclusion

  1. [242]
    In conclusion I find that the total loss as a result of the frauds to a number of the complainants is $3,251,281.35.
  1. [243]
    The other factual findings are specified above in the decision.

Annexure A – Schedule of Transaction Amounts

Count

Charge

Money Taken From

Money Put Into

Amount transferred

1

Fraud of property subject to a direction

The Two Eagles Pty Ltd

Andrew Barlow

$21,665.00

2

Fraud of property subject to a direction, to the value of $30,000 or more

The Two Eagles Pty Ltd

CL Platinum Pty Ltd

$60,145.00

3

Fraud of property subject to a direction

M Investments Pty Ltd

Andrew Burdon

$6,000.00

4

Fraud of property subject to a direction, to the value of $30,000 or more

The Two Eagles Pty Ltd

CL Vitale Super Fund

$69,985.32

5

Fraud of property subject to a direction

Gisana Pty Ltd

Justin Sherlock

$14,295.73

6

Fraud of property subject to a direction, to the value of $30,000 or more

Gisana Pty Ltd

Clint Dykstra

$70,000.00

7

Fraud of property subject to a direction, to the value of $30,000 or more

Gisana Pty Ltd

Nameless Pty Ltd

$100,000.00 

8

Fraud of property subject to a direction, to the value of $30,000 or more

GMS Group Nominees Pty Ltd

Nameless Pty Ltd

$86,000.00

9

Fraud of property subject to a direction, to the value of $30,000 or more

Kinghorn Holdings Pty Ltd

Nameless Pty Ltd and Another

$199,000.00

10

Fraud of property subject to a direction, to the value of $30,000 or more

Marcus Barlow

Greenking Pty Ltd

$49,026.00

11

Fraud of property subject to a direction, to the value of $30,000 or more

Stone Cold Pty Ltd

Justin Sherlock

$175,000.00

12

Fraud of property subject to a direction, to the value of $30,000 or more

Vanessa Pavlou and Another

Justin Sherlock

$50,000.00

13

Fraud of property subject to a direction, to the value of $30,000 or more

Robert Adam Hugh Kilvert

Stone Cold Pty Ltd and Others

$500,000.00

14

Fraud of property subject to a direction, to the value of $30,000 or more

Joseph Mathew

Stone Cold Pty Ltd and Others

$270,000.00

15

Fraud of property subject to a direction, to the value of $30,000 or more

Kurisummoottil Pty Ltd

Stone Cold Pty Ltd and Others

$57,000.00

16

Fraud of property subject to a direction, to the value of $30,000 or more

Kylie Leanne Deane

The Two Eagles Pty Ltd

$100,000.00

17

Fraud of property subject to a direction, to the value of $30,000 or more

Kurisummoottil Pty Ltd

The Two Eagles Pty Ltd

$135,000.00

18

Fraud of property subject to a direction, to the value of $30,000 or more

Stone Cold Pty Ltd

Andrew Burdon

$506,000.00

19

Fraud of property subject to a direction, to the value of $30,000 or more

Joseph Mathew

Vanessa Pavlou and Another

$285,464.84

20

Fraud of property subject to a direction, to the value of $30,000 or more

Gikos Pty Ltd

Andrew Pavlou

$260,000.00

21

Fraud of property subject to a direction

Charlie Demetriou

Redwood Securities Pty Ltd and Another

$9,395.80

22

Fraud of property subject to a direction, to the value of $30,000 or more

GMS Group Nominees Pty Ltd

Stone Cold Pty Ltd

$241,000.00

23

Fraud of property subject to a direction

Timothy Sherlock

Redwood Securities Pty Ltd

$11,061.33

24

Fraud of property subject to a direction, to the value of $30,000 or more

Khakh Trading Company Pty Ltd

Christopher Zenonos and Another

$45,179.03

25

Fraud of property subject to a direction

Timothy Sherlock

Gisana Pty Ltd and Another

$10,000.00

26

Fraud of property subject to a direction, to the value of $30000 or more

Peter Apolakiatis

Redwood Securities Pty Ltd and Others

$70,982.17

27

Fraud of property subject to a direction, to the value of $30,000 or more

GMS Group Nominees Pty Ltd

Stone Cold Pty Ltd

$240,096.32

28

Fraud of property subject to a direction

Timothy Sherlock

Redwood Securities Pty Ltd and others

$4,169.42

29

Fraud of property subject to a direction

Andrew Burdon

Redwood Securities Pty Ltd and Others

$14,674.07

30

Fraud of property subject to a direction

Kinghorn Holdings Pty Ltd

Khakh Trading Company Pty Ltd and Another

$4,408.73

31

Fraud of property subject to a direction

Timothy Sherlock

Redwood Securities Pty Ltd

$3,319.87

32

Fraud of property subject to a direction

Timothy Sherlock

Khakh Trading Company Pty Ltd and Another

$3,432.55

33

Fraud of property subject to a direction

Oniviro Super Pty Ltd

Gibbs Hurley & Co Pty Ltd

$10,000.00

34

Fraud of property subject to a direction

Kinghorn Holdings Pty Ltd

Charlie Demetriou and Another

$14,627.01

35

Fraud of property subject to a direction

Timothy Sherlock

Gisana Pty Ltd and Another

$2,736.08

36

Fraud of property subject to a direction

Timothy Sherlock

Redwood Securities Pty Ltd

$279.55

37

Fraud of property subject to a direction, to the value of $30,000 or more

Susan Burns and Another

M Investments Pty Ltd

$90,000.00

38

Fraud of property subject to a direction, to the value of $30000 or more

Oniviro Super Pty Ltd

GMS Nominees Pty Ltd and Others

$312,000.00

39

Fraud of property subject to a direction

Oniviro Super Pty Ltd

Kinghorn Holdings Pty Ltd and Another

$25,531.00

40

Fraud of property subject to a direction

Timothy Sherlock

Gisana Pty Ltd and Another

$2,045.00

41

Fraud of property subject to a direction, to the value of $30,000 or more

GMG Group Nominees Pty Ltd

M Investments Pty Ltd and Others

$65,000.00

42

Fraud of property subject to a direction, to the value of $30,000 or more

GMS Group Nominees Pty Ltd

M Investments Pty Ltd and Others

$100,000.00

43

Fraud of property subject to a direction

Stone Cold Pty Ltd

M Investments Pty Ltd and Another

$16,978.00

44

Fraud of property subject to a direction

Andrew Burdon

Redwood Securities Pty Ltd and Others

$5,000.00

45

Fraud of property subject to a direction, to the value of $30000 or more

Steven Tapsall

M Investments Pty Ltd and Others

$70,000.00

46

Fraud of property subject to a direction, to the value of $30,000 or more

Gikos Pty Ltd

M Investments Pty Ltd and Others

$150,000.00

47

Fraud of property subject to a direction, to the value of $30,000 or more

Kurisummoottil Pty Ltd

Merryside Pty Ltd

$55,856.04

48

Fraud of property subject to a direction, to the value of $30,000 or more

Kurisummoottil Pty Ltd

Nameless Pty Ltd

$450,000.00

49

Fraud of property subject to a direction, to the value of $30,000 or more

Stone Cold Pty Ltd

Kurisummoottil Pty Ltd

$450,000.00

50

Fraud of property subject to a direction, to the value of $30,000 or more

Paul Parker

Kurisummoottil Pty Ltd

$100,000.00

51

Fraud of property subject to a direction, to the value of $30,000 or more

Charlie Demetriou

Andrew Burdon

$45,600.00 

52

Fraud of property subject to a direction, to the value of $30,000 or more

Ajit Viswalingam

Kurisummoottil Pty Ltd

$63,700.00

53

Fraud of property subject to a direction, to the value of $30,000 or more

Kurisummoottil Pty Ltd

Christopher Zenonos

$60,000.00

54

Fraud of property subject to a direction, to the value of $30,000 or more

GMS Group Nominees Pty Ltd

Kurisummoottil Pty Ltd

$39,000.00

55

Fraud of property subject to a direction, to the value of $30,000 or more

Stone Cold Pty Ltd

Kurisummoottil Pty Ltd

$120,000.00

Total

$5,920,653.86

Footnotes

[1]Transcript day 1, p 25.20.

[2]Transcript day 1, p 25.35.

[3]Transcript day 1, p 32.14.

[4]Transcript day 1, p 32.27.

[5]Transcript day 1, p 37.45.

[6]Transcript day 1, p 39.10.

[7]Transcript day 1, p 39.20.

[8]See Exhibit 7.

[9]Transcript day 2, pp 30-31.

[10]Transcript day 2, p 32.31.

[11]Transcript day 2, p 34.20.

[12]Transcript day 2, pp 36 and 37.

[13]Transcript day 2, p 38.10.

[14]Transcript day 2, pp 41-42.

[15]Exhibit 10.

[16]Exhibit 11.

[17]Transcript day 2, p 47.40.

[18]Transcript day 2, p 48.20.

[19]Transcript day 2, p 50.20.

[20]Transcript day 2, p 51.17.

[21]Transcript day 2, p 52.7.

[22]Transcript day 2, pp 52 and 53.

[23]Transcript day 2, p 55.5.

[24]Transcript day 2, p 57.25.

[25]Transcript day 1, p 43.35.

[26]Transcript day 1, p 45.

[27]Transcript day 1, p 46.40.

[28]Transcript day 1, p 52.35.

[29]Transcript day 1, p 53.42.

[30]Transcript day 1, p 55.

[31]Transcript day 1, p 56.22.

[32]Transcript day 1, p 57.20.

[33]Transcript day 1, p 59.21.

[34]Transcript day 1, p 61.1.

[35]Transcript day 1, p 62.

[36]Transcript day 1, p 66.

[37]Transcript day 1, p 67.35.

[38]Transcript day 1, p 68.7.

[39]Transcript day 1, p 69.20.

[40]Transcript day 1, p 70.1.

[41]Transcript day 1, p 72.45.

[42]Transcript day 1, p 73.12.

[43]Transcript day 1, p 73.25.

[44]Transcript day 1, p 73.40.

[45]Transcript day 1, pp 74-75.

[46]Transcript day 2, p 8.42.

[47]Transcript day 2, p 9.30.

[48]Transcript day 2, p 10.5.

[49]Transcript day 2, p 10.32.

[50]Transcript day 2, p 14.32.

[51]Transcript day 2, p 15.21.

[52]Transcript day 2, p 15.30.

[53]Transcript day 2, p 17.32.

[54]Transcript day 2, p 24.12.

[55]Transcript day 3, p 3.42.

[56]Transcript day 3, p 4.7.

[57]Transcript day 3, p 4.22.

[58]Transcript day 3, pp 4-5.

[59]Transcript day 3, p 5.32.

[60]Transcript day 3, p 5.45.

[61]Transcript day 3, p 7.

[62]Transcript day 3, p 8.

[63]Transcript day 3, p 9.32.

[64]Transcript day 3, p 10.5.

[65]Transcript day 3, p 12.10.

[66]Transcript day 3, p 14.25-35.

[67]Transcript day 3, p 16.5.

[68]Transcript day 3, p 16.15.

[69]Transcript day 3, p 17.45.

[70]Transcript day 3, p 18.17.

[71]Transcript day 3, p 19.7.

[72]Transcript day 3, p 19.40.

[73]Transcript day 3, p 20.

[74]Transcript day 3, p 21.7.

[75]Transcript day 3, p 21.32.

[76]Transcript day 3, p 22.

[77]Transcript day 3, p 23.

[78]Transcript day 3, p 24.3.

[79]Transcript day 3, p 24.25.

[80]Transcript day 3, p 25.7.

[81]Transcript day 3, p 26.30.

[82]Transcript day 3, p 26.35.

[83]Transcript day 3, p 27.40.

[84]Transcript day 3, p 32.7.

[85]Transcript day 3, p 34.7.

[86]Transcript day 4, p 3.40.

[87]Transcript day 4, p 4.7.

[88]Transcript day 4, p 6.25.

[89]Transcript day 4, p 6.35-40.

[90]Transcript day 4, p 6.42.

[91]Transcript day 4, p 7.1 - p 8.15.

[92]Transcript day 4, p 23.32-p 24.5.

[93]Transcript day 4, p 17.45.

[94]Transcript day 4, p 18.45.

[95]Transcript day 4, p 35.20-p 36.19.

[96]Transcript day 4, p 34.30.

[97]Transcript day 4, p 36.30.

[98]Transcript day 4, p 36.40.

[99]Transcript day 4, p 40-47.

[100]Transcript day 4, p 52.5.

[101]Transcript day 4, p 54.25-45.

[102]Transcript day 4, pp 55-62.

[103]Transcript day 4, p 64.37.

[104]Exhibits 6 and 14.

[105]Exhibit 6 p 2.5.

[106]Transcript day 2, p 65.42.

[107]Transcript day 2, p 68.7.

[108]Exhibit 9.

[109]Transcript day 2, p 69.11.

[110]Transcript day 2, p 70.42.

[111]Transcript day 2, p 71.30.

[112]Transcript day 2, p 73.32.

[113]Exhibit 5.

[114][2014] NSWSC 367.

[115]Exhibit 14, pp 4-5 and Exhibit 5 pp 2-3.

[116]Exhibit 14, pp 5-6 and Exhibit 5, p 4.

[117]Exhibit 14, pp 7-8 and Exhibit 5, pp 4-7.

[118]Exhibit 14, pp 9-10 and Exhibit 5, p 9.

[119]Exhibit 14, pp 10-13 and Exhibit 5, pp 10-12.

[120]Exhibit 14, pp 13-14 and Exhibit 5, p 14.

[121]Exhibit 14, pp 14-16 and Exhibit 5, p 15.

[122]Exhibit 14, pp 16-20 and Exhibit 5, p 13.

[123]Exhibit 14, pp 20-24 and Exhibit 5, pp 20-22.

[124]Exhibit 14, pp 24-30 and Exhibit 5, pp 23-24.

[125]Exhibit 14, pp 30-32 and Exhibit 5, p 25.

[126]Exhibit 14, pp 32-37. This is not referred to in Exhibit 5 but is in Exhibit 9.

[127]Ms Bundesen considers it to be $290,297.35- see Exhibit 9, p 3.

[128]Exhibit 14, pp 37-38 and Exhibit 5, p 32.

[129]Exhibit 14, pp 33-40 and Exhibit 5, p 26.

[130]Exhibit 14, pp 40-42 and Exhibit 5, p 18.

[131]Exhibit 14, pp 43-44 and Exhibit 5, p 31.

[132]Exhibit 14, pp 43-44 and Exhibit 5, p 27.

[133]Exhibit 14, pp 44-45 and Exhibit 5, p 8.

[134]Exhibit 14, pp 45-46 and Exhibit 5, p 30.

[135]Exhibit 14, pp 46-49. There is no reference to this is Exhibit 5 but there is in Exhibit 9.

[136]Ms Bundesen considers it was $550,000- see Exhibit 9 p 3.

[137]Exhibit 14, pp 49-50 and Exhibit 5, p 29.

[138]Exhibit 14, pp 50-51 and Exhibit 5, p 28.

[139]Exhibit 14, pp 51-52 and Exhibit 5, p 17.

[140]Exhibit 14, pp 53-54.

[141]Exhibit 14, p 53 and Exhibit 9, p 2.

[142]Exhibit 14, p 53 and Exhibit 9, p 2.

[143]Exhibit 14, p 53 and Exhibit 9, p 2.

[144]Exhibit 14, p 54 and Exhibit 9, p 2.

[145]R v Lovell [2012] QCA 43 at [30] per Chesterman JA.

[146]Exhibit 9, p 3.

[147]Exhibit 9, p 2.

[148]Exhibit 9, p 5.

[149]Exhibit 9, p 5.

[150]Arguably some of the funds are tainted property/proceeds of crime under the Commonwealth and State confiscation legislation although I do not express any concluded view on the point.

[151]Exhibit 9, p 4.26.

Close

Editorial Notes

  • Published Case Name:

    R v Madhoji

  • Shortened Case Name:

    R v Madhoji

  • MNC:

    [2016] QDC 171

  • Court:

    QDC

  • Judge(s):

    Smith DCJA

  • Date:

    08 Jul 2016

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Macquarie Bank Ltd v The Two Eagles Pty Ltd [2014] NSWSC 367
2 citations
Jump To
Cite 1 - [2014] NSWSC 367
Cite 2 - [2014] NSWSC 367
R v Lovell [2012] QCA 43
2 citations
Jump To
Cite 1 - [2012] QCA 43
Cite 2 - [2012] QCA 43

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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