Tony Iervasi of Tweed Heads and Athan Papoulias of Brighton Le Sands, NSW, have today appeared in the Downing Centre Local Court charged with criminal offences for their actions relating to an alleged Ponzi scheme.
Mr Iervasi is facing nine criminal charges of dishonest conduct and one charge of carrying on a financial services business without a licence.
Mr Papoulias is facing one charge of dealing in the proceeds of crime worth $1 million or more, and one charge of aiding and abetting Mr Iervasi in carrying on a financial services business without a licence.
The charges relate to around 590 investors who paid over $196 million into the Ponzi scheme.
Mr Iervasi was the sole director and shareholder of Courtenay House Pty Ltd (in liquidation) and Courtenay House Capital Trading Group Pty Ltd (in liquidation). Mr Papoulias was a contractor engaged by Courtenay House Capital Trading Group to promote the Courtenay House business.
It is alleged that, between October 2010 and 21 April 2017:
- Mr Iervasi and 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;
- Mr Iervasi personally, and through the Courtenay House companies, acquired investor funds and did not invest them for the intended purpose;
- Mr Iervasi went on to pay monthly amounts to investors representing they were returns from trading, when little to no trading had occurred;
- Mr Iervasi was operating an unlicenced financial services business;
- Mr Papoulias continued to promote the Courtenay House business and receive commissions despite becoming aware that Mr Iervasi was operating an unlicensed financial services business;
- Mr Papoulias dealt with money or other property which is, or he believed to be, the proceeds of crime.
ASIC alleges the conduct occurred to allow a Ponzi scheme to operate and grow.
The matter is being prosecuted by the CDPP after an investigation and referral by ASIC.
The matter is listed for first mention in the Downing Centre Local Court in Sydney on 22 February 2022.
The maximum penalty for dishonest conduct during the relevant time ranges between five and 10 years imprisonment, a fine between $22,000 and $810,000 or both. For dealing with the proceeds of crime, the maximum penalty is 25 years imprisonment, a fine of $270,000 or both. For operating without a financial services licence, the maximum penalty is two years imprisonment, a fine of between $22,000 and $36,000 or both.
The Courtenay House companies appointed liquidators on 16 May 2017 (Courtenay House Key Matters page).
On the application of ASIC, the Supreme Court of NSW made interim orders on 1 May 2017 against the following parties by consent:
- Courtenay House Trading Group;
- Courtenay House;
- Tony Iervasi;
- David Sipina;
- Athan Papoulias;
- Proactive Property Services Pty Ltd;
- Sipina Enterprises Pty Ltd; and
- TheNowGroup.com.au Pty Ltd.
These orders prevented all parties from carrying on a financial services business and limited the extent to which they could deal with their cash and other assets. ASIC sought these orders to preserve funds that might be available for the benefit of investors in the Courtenay House companies and to prevent these companies from accepting further funds from investors.