ASIC nabs Ponzi scheme operator

Six counts of deception

By Vishal Teckchandani
Wed 03 Mar 2010

A Victorian company director has pleaded guilty to six counts of deception involving around $2.5 million following an investigation by ASIC.

A loan and mortgage broking company director has pleaded guilty in a Melbourne court to six counts of deception following an investigation by the corporate watchdog.

Victorian Finance Broking Services (VFBS) sole director Hazel Bernice Bucello pleaded guilty to five counts of obtaining property by deception and one count of obtaining financial advantage by deception.

The six counts of deception involved a sum of around $2.5 million that was invested by five investors between 2004 and 2006, ASIC said.

The investors were told their money would be used to provide bridging finance to other VFBS clients. They were promised between 4 per cent and 5 per cent interest per month on their invested capital.

"ASIC's investigation found that investors were in fact being repaid their own money, as is typical of a ponzi scheme, and the scheme was reliant on new funds being invested to meet the promised interest payments," ASIC said.

"Those who invested at the very beginning fared much better than the last investor, who received no interest payments."

While some victims received interest payments the capital invested was not repaid, although some victims did receive regular monthly interest payments, ASIC said.

Bucello used the remaining money for her own purposes and some was used to meet VFBS's financial obligations, the regulator said.

Her bail was extended to 4 May 2010, when she will reappear at the Melbourne County Court for a plea hearing and sentencing.

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.

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