Former Courtenay House director Tony Iervasi has pleaded guilty to five criminal charges regarding operation of a $180 million Ponzi scheme.
Iervasi was the director of Courtenay House and Courtenay House Capital Trading Group which are both now in liquidation after action was commenced by ASIC.
In a media statement released on Tuesday afternoon, the regulator said Iervasi pleaded guilty to four offences of engaging in dishonest conduct between 13 December 2010 and 21 April 2017, when he was the sole director and shareholder of Courtenay House, which raised around $180 million from around 585 investors.
The final guilty charge was carrying on an unlicensed financial services business.
The companies, based out of Bondi Junction in New South Wales, represented to investors their funds would be traded in forex and futures markets when only around three per cent were traded. Instead, monthly amounts paid to investors were derived from capital deposited from new investors.
In addition to offering purported “standard” investment products, Iervasi ran several “investment specials” to encourage trading. In December 2016, Iervasi invited clients to invest in a “US Election special trade” which was to take in January 2017 to coincide with the inauguration of then President Donald Trump to invest in what Iervasi claimed was “fast-money markets” which offered a 15 per cent return on 20 per cent risk.
Iervasi’s clients were told via weekly emails they had made profits from the US inauguration trade, but the money was instead used to sustain the Ponzi scheme.
The date for sentencing has yet to be confirmed.
The maximum penalty at the time for engaging in dishonest conduct in relation to a financial product or financial service was 10 years’ imprisonment, a fine of $810,000, or both. The maximum penalty for operating without an AFS licence is two years’ imprisonment, a fine of $22,000, or both.