Former Coffs Harbour mortgage broker Dominic Cincotta has been sentenced to five years in prison on seven counts of fraud.
Cincotta pleaded guilty in Sydney’s Downing Centre court on Friday to dishonestly obtaining a financial advantage to gain $5.8 million from nine former clients in Sydney and Coffs Harbour.
A further four charges in relation to $690,000, including one of fraudulent misappropriation were taken into account on sentencing.
Cincotta will serve a minimum of three years in prison.
The sentencing comes as state governments continue to review proposed national legislation to regulate finance brokers.
Between November 1998 and December 2004, corporate regulator ASIC said Cincotta falsely represented to the clients that he would arrange investments with Perpetual Trustees Australia Limited.
The broker called the accounts the Mortgage Offset Account, Bricks and Mortar Fund, Fixed Mortgage Investment Account or an Investment Deposit Account and told clients they would earn interest at rates between 6.75 per cent and 10.75 per cent per annum.
ASIC said that funds were in fact deposited to accounts controlled by Cincotta, including a Perpetual Investment Management Limited Cash Management account in the name of his wife and a St George Bank account in the name of his personal company.
Cincotta then used the funds for his own purposes.
“When people invest their funds, they place a high degree of trust in the organisation or individual that facilitates the process,” ASIC executive director of enforcement Jan Redfern said.
“As this outcome shows those who abuse that trust by deliberately misleading their clients, face serious consequences,” ASIC executive director of enforcement Jan Redfern said.
Finance broker peak body, the Mortgage and Finance Association of Australia banned its 12th member, Minerva Boniales, in December.
It made 2007 the biggest year for expulsions since the first broker was expelled in 2004.
