Commonwealth Director of Public Prosecutions

Steven HILL - Financial crime of misappropriating investor fund

New South Wales

In April 2016, after a four-week trial at the John Maddison Tower in Sydney, former company director Steven Hill was convicted of six counts of fraudulently misappropriating investor funds totaling $281,000.

Between January 2006 and February 2007, Hill advised five ‘mum-and-dad’ type investors or private investors to remove their superannuation savings from their established superfunds to a self-managed fund. He then induced these investors to pay money into an entity controlled by him on the promise that he would provide options to build wealth for their retirement. In particular, he recommended that they rollover their existing super into a self-managed superannuation fund and then invest in a house and land project in Queensland. He told them they would receive higher returns than if the money remained in the established superannuation funds.

Referred to as ‘the Queensland Project’, Hill was responsible for securing investment funds from private investors, which would then be paid to his business partner in the project, Darryl Ladd, who would organise the construction and sale of the houses. The pair agreed Ladd would notify Hill when he needed funds to cover development costs.

Hill and Ladd first met in 2004 and it was at this time that Hill started pitching the idea to Ladd of building houses on behalf of investors. They agreed to fund the Queensland Project from two sources. Approximately 80 per cent of the funds were obtained through ‘low documentation’ construction loans, and the remaining 20 per cent were obtained from the private investors Hill sourced –  with this money to pay for the initial land deposits, construction costs and shortfalls not covered by the loans.

Between January 2006 and November 2007, Ladd sourced, bought and developed the properties required for the project. He had no knowledge about the value of the funds, or from where, whom, or how Hill obtained them—he would simply notify Hill when he needed funds to cover development costs.

In total, the five investors deposited $476,000 into two bank accounts controlled by Hill. Of this Hill fraudulently misappropriated $281,000, spending this on personal expenses.

Charge / Sentence

Hill was convicted of six counts of fraudulent misappropriation contrary to section 178A Crimes Act 1900, and found not guilty of one charge of fraudulently misappropriating $150,000 from a sixth investor.

On 18 April 2016 Hill was sentenced to two years and nine months imprisonment, with a minimum term to serve of one year and nine months.

Defence Appeal

On 15 March 2017 Hill filed a Notice of Appeal. The appeal was heard on 31 May 2017 in the New South Wales Court of Criminal Appeal. On 21 June 2017, the Court dismissed the appeal against conviction, and refused leave to appeal against sentence.