‘Before we had plans, now we worry about survival’ – Financial adviser found guilty of fraud

On 17 October 2019, former Queensland financial adviser Ben Jayaweera (61), was sentenced to 12 years imprisonment, with a non-parole period of six years, for defrauding clients of $5.9 million by diverting their investments into a failed abalone farm without their knowledge.

Following a three week trial in the Brisbane District Court, Mr Jayaweera was found guilty by a jury of six charges of fraud.

Between September 2013 and October 2015, Mr Jayaweera encouraged six couples, many of whom were planning for their retirement, to invest in a scheme called the Australian Diversified Sector Income Fund (ADSIF), operated by his company, Growth Plus.

Mr Jayaweera claimed ADSIF was a diversified fund investing in cash, property, shares, aquaculture and agriculture, when in reality its only investment was a single project, an abalone farm in South Australia operated by entities he controlled.

His clients’ investments, totalling $5.9 million, were directed to company bank accounts to make payments to the abalone farm and other third parties.

The abalone farm eventually failed and was wound up, with no returns available to investors.

ASIC investigation

An investigation by the Australian Securities and Investments Commission (ASIC) found Mr Jayaweera invested some of his clients’ superannuation funds into the scheme without their knowledge or permission.

ASIC found that from September 2013 to October 2015, Mr Jayaweera met with various clients based in Queensland, telling them he could provide them with an investment opportunity to build their wealth towards retirement.

He induced them into transferring funds, including from their self-managed superannuation funds, into ADSIF, providing him with unfettered access to those funds. None of the couples knew the entirety of their superannuation was to be invested in an abalone farm.

When the ADSIF scheme began to falter, Mr Jayaweera did not seek to end it, instead assuring his clients everything was fine and their investments were safe. 

Throughout the course of the offending, Mr Jayaweera transferred small amounts into his victims’ accounts in order to create the impression it was interest earned on their investments.

Impact on victims

Several of Mr Jayaweera’s victims submitted victim impact statements to the court. They detail the financial and emotional stress Mr Jayaweera’s offending had upon them. Many had spent their entire working lives building and planning for a comfortable retirement, and placed their trust in the financial adviser only to lose their life savings within two years. Some were forced to sell homes, investment properties, cars, and other assets. Others were forced to return to work instead of retiring.

Describing the before and after impact, one of Mr Jayaweera’s victims said, ‘Before we had plans. Now we worry about survival.’

Sentencing

In sentencing, her Honour Judge Richards said Mr Jayaweera’s offending was a ‘calculated and callous scheme of dishonesty’. Judge Richards said the offending involved a high level of planning, sophistication and persistence, investors had been robbed of their retirement and Mr Jayaweera had committed a gross breach of trust.

Judge Richards accepted that Mr Jayaweera did not use the defrauded money to fund a lavish lifestyle, but said this made the offending no less dishonest; Mr Jayaweera knew what was happening at all times, and when his victims began to suspect something was wrong, reassured them their money was safe.

Judge Richards said the jury took great care in rendering their verdict and in her view it was the correct verdict, and the importance of deterrence meant the only appropriate sentence was a term of immediate imprisonment.

Summary of charges:

•    6 x fraud (dishonestly causing detriment to clients involving property in excess of $30,000) contrary to s408C (1)(e) of the Criminal Code (Queensland)

Further information:

Listen to an ASIC podcast on this matter: Ben Jayaweera found guilty after three-week trial, sentenced to 12 years