Commonwealth Director of Public Prosecutions

Man who misappropriated retirement savings lost his moral compass

Year: 
2020-2021
Category: 
Commercial, Financial and Corruption
Location: 
New South Wales

On 31 July 2020, following a lengthy investigation conducted by corporate regulator ASIC the NSW District Court sentenced former financial advisor Mr Graeme Miller to six years imprisonment, with a non-parole period of four years, for conducting a Ponzi Scheme.

The sentence followed Mr Miller pleading guilty to six charges of engaging in dishonest conduct in relation to a financial product in the course of carrying on a financial service business, contrary to s 1041G of the Corporations Act 2001 (Cth).

Mr Miller was an independent financial advisor operating a business known as CFS Private Wealth. As part of his business activities he provided financial services to retirees or people nearing retirement who were looking to invest their superannuation savings. An investigation uncovered that he had operated a Ponzi Scheme under the guise of his business, misappropriating client funds for his personal use, or to transfer to other clients, purporting they were returns on amounts he had misappropriated earlier. A total of $1.865 million in funds belonging to 10 victim clients was misappropriated in this way. For some victims, this represented almost the entirety of their retirement savings.

Mr Miller was sentenced to six years imprisonment with a non-parole period of four years.

In sentencing, a number of victims provided moving Victim Impact Statements, all of which were read aloud to the Court.

Judge Woods of the Sydney Downing Centre District Court said the victims’ stories indicated the deep distress caused by Mr Miller preying on clients of mature years, and that Mr Miller’s actions were a cruel and deceitful betrayal leading to financial disaster for the victims involved.

The Court noted that in cases of financial misconduct such as this, there was a special need to deter others from similar offending. His Honour pointed out that the case highlighted the serious dangers of self-managed super funds, and the need for greater statutory regulation to minimise such fraud.

In deciding the length of the term of imprisonment, Judge Woods granted Mr Miller a substantial discount of 25 per cent due to his early guilty plea and indications of remorse, which included an apology letter addressed to the victims. His Honour took into account that Mr Miller had suffered a family tragedy prior to the offending, and that even though this event in no way excused his criminal conduct, it provided explanation for the point at which he “lost his moral compass”.

The Court concluded the sentence by making full repatriation orders in favour of the victims, noting that even though Mr Miller would be unlikely to ever have the funds to repay them, it was important that if he ever did the victims have an avenue for redress.

Relevant links:

https://asic.gov.au/about-asic/news-centre/find-a-media-release/2020-releases/20-177mr-former-financial-adviser-sentenced-to-six-years-imprisonment-for-dishonest-conduct/