Director of Courtenay House sentenced to 11 years’ imprisonment for running Australia’s largest Ponzi scheme

On 2 September 2024, Tony Iervasi was sentenced in the New South Wales Supreme Court to 11 years’ imprisonment with a non-parole period of seven years. This followed a plea of guilty to four counts of engaging in dishonest conduct in relation to a financial product or financial service and one count of carrying on an unlicensed financial services business, contrary to ss 1041G and 911A of the Corporations Act 2001 (Cth) (Corporations Act) respectively. Mr Iervasi also admitted guilt in respect of two further offences contrary to s1041G of the Corporations Act, which were taken into account by the Court in passing sentence on him pursuant to s16BA of the Crimes Act 1914 (Cth).

The Offending

Mr Iervasi ran a trading business called ‘Courtenay Trading’ based in Bondi Junction NSW, in which clients deposited funds for the purported purpose of investing in foreign exchange and futures trading. He did so without an Australian Financial Services License, despite knowing that one was required.

From its inception, the trading business was a Ponzi scheme – a fact that Mr Iervasi later admitted for the purpose of sentencing. Between 2010 and 2017, he defrauded his clients, who were enticed to invest and increase their investment, by promises of high guaranteed “returns” purportedly yielded from foreign exchange and futures trading. Less than three percent of the money invested by clients was actively traded, which was not profitable in any event. The purported “returns” paid to investors in fact came from other clients’ funds rather than from any actual profit earnt from trading. 

Mr Iervasi defrauded about 585 investors, who invested over $180 million for the purpose of trading those funds. The liquidator of the trading business paid to investors 28 cents per dollar of claimed losses. After distribution, the liquidator calculated the net loss to investors was over $54 million. 

Across the period of offending, Mr Iervasi received the benefit of over $12 million in funds obtained from the victims which he used for personal purposes, including to fund holidays, leases of water-front properties and luxury cars. 

The Ponzi scheme came to an end when the Australian Securities and Investments Commission (ASIC) obtained freezing orders over the trading business’ assets in April 2017. In May 2017, liquidation proceedings commenced in the Supreme Court of NSW and the Court subsequently ordered the Courtenay companies be wound up. 

Sentencing

In sentencing the offender, Justice Sweeney found that Mr Iervasi was dishonest on an egregious scale, establishing the veneer of a successful wealth creating business which sought to reassure and persuade victims to invest.

The CDPP tendered 30 victim impact statements (VIS) during the proceedings, 21 of which were anonymised when read to the Court. In sentencing remarks Justice Sweeney said “[the VIS] may be summarised as indicating the following harm consequential upon their loss of monies deposited with the offender. As well as the loss of life savings and family homes, the harm went beyond financial losses to breakdowns of marriages and family relationships, emotional, physical and mental health issues, and the need to delay retirement or resume working in the face of a loss of financial security in their mature years.”

The sentence included a significant discount having regard to Mr Iervasi’s guilty plea and other mitigating factors.

Relevant links: 

Supreme Court of New South Wales judgement –  R v Iervasi (Sentence)

ASIC Media Release – 24-193MR Former Courtenay House director sentenced to 11 years imprisonment