Athan Papoulias, a former contractor to and promoter of Courtenay House investments, has been sentenced to two years’ imprisonment, to be served by way of an intensive corrections order over his role in the unlicensed financial services business.
In a statement on Monday, the Australian Securities and Investments Commission (ASIC) noted that Mr Papoulias had pleaded guilty to one charge of carrying on an unlicensed financial services business between 2 November 2016 and 21 April 2017, “reckless about the fact that the business did not have the required licence”.
Additionally, Mr Papoulias had pleaded guilty to one charge of dealing in the proceeds of crime worth $100,000 or more, “reckless as to it being derived from the carrying on of an unlicensed financial services business”.
During this period, ASIC said that Mr Papoulias received commissions totalling $670,860 for promoting investments in Courtenay House. Liquidators were appointed to the Courtenay House companies in May 2017 and director Tony Iervasi was restricted from leaving Australia.
Mr Iervasi pleaded guilty to five criminal charges last November. Four of these charges included engaging in dishonest conduct between 13 December 2010 and 21 April 2017 in relation to $180 million raised by the Courtenay House companies from approximately 585 investors.
“The Courtenay House companies represented to investors that their funds would be traded in the Forex and Futures markets when only a small proportion of funds were traded,” ASIC said.
“Instead, a Ponzi scheme was being run, with monthly amounts paid to investors from the capital invested by other investors, with Courtenay House falsely representing that these amounts were returns from trading.”
ASIC noted that Mr Papoulias was not aware that the funds were used to fuel a Ponzi scheme.
“ASIC has taken civil action to freeze assets, assisted liquidators and is now seeing justice for investors through the criminal court,” commented ASIC deputy chair Sarah Court.
“To ensure a fair and strong financial system, and to protect consumers, financial services businesses need to be licensed. Those promoting unlicensed businesses should not assume they are immune from criminal consequences.”
When handing down Mr Papoulias’ sentence, Judge McHugh SC said that his actions had undermined public confidence in the regulatory regime of the financial services industry. The judge also took into consideration Mr Papoulias’ guilty plea.
As part of his sentence, Mr Papoulias has been ordered to complete 120 hours of community service. The matter was prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral by ASIC.