Commonwealth Director of Public Prosecutions

Former Adelaide financial advisor sentenced to 10 years imprisonment after stealing client funds

Category: 
Commercial/Financial
Location: 
South Australia

 

On 10 July 2019, a financial advisor who stole $4.8 million from his clients was sentenced to 10 years imprisonment, with a non-parole period of seven years. James Gibbs (51) was sentenced in the District Court in Adelaide, after stealing the money from 30 victims who were retired or preparing for retirement between 2009 and 2016.

Mr Gibbs was the principal of James Gibbs Investments Pty Ltd, a financial advising firm in Adelaide, an authorised representative of Madison Financial Group Ltd (Madison).

Mr Gibbs advised his victims to establish self-managed superannuation funds, and opened cash management accounts on their behalf. In many cases he had near complete control of their financial affairs. He then accessed the accounts and stole money to pay personal and business expenses, including his own director’s fees and salary. He also paid for his family’s living expenses, and to prop up a new business he had bought.

Mr Gibbs had known many of the victims for a number of years and many regarded him as a close and trusted friend. A number of them read Victim Impact Statements to the Court, which detailed their acute financial and emotional distress. In one case this included the victim being forced to sell their family home.

The Australian Securities and Investments Commission (ASIC) commenced an investigation into Mr Gibbs after being notified of suspected unauthorised transactions by Madison.

In February 2019, Mr Gibbs pleaded guilty to 20 counts of theft, 10 of which were aggravated, and eight counts of aggravated dishonestly dealing with documents.

During the course of his offending, Mr Gibbs also falsified various documents in order to cover his tracks. The total amount stolen by Mr Gibbs was $4.8 million, but as he sometimes transferred money back into his clients’ accounts, the net loss was between $3 million and $3.5 million.

Sentencing 

In sentencing, his Honour Judge Boylan took into account the fact that guilty pleas were entered at the earliest opportunity, but said the offending was at the higher end of the scale of seriousness.

In determining the sentence, Judge Boylan also said general deterrence is an important factor in cases such as these, which involve persons in positions of trust stealing money.

“You had known most of your victims for many years and they trusted you completely. A number of them relied on your advice without question, and all the while you were systematically stealing their life savings from them,” he said.

“You have caused great suffering to many people. Yours is despicable offending, and offending which only came to an end when you were caught. You did not voluntarily desist.”

Mr Gibbs was also automatically disqualified from managing a corporation for five years, pursuant to s206B of the Corporations Act 2001 (Cth).

Summary of charges:

•    10 x Aggravated theft, contrary to s134(1) of the Criminal Law Consolidation Act 1935 (SA);
•    10 x Theft, contrary to s134(1) of the Criminal Law Consolidation Act 1935 (SA);
•    8 x Aggravated dishonest dealings with documents, contrary to s140(4) of the Criminal Law Consolidation Act 1935 (SA).

Further information:

Listen to an ASIC podcast on this matter: ASIC's case against former financial adviser James Gibbs