Following a two-week trial in the County Court of Victoria, Douglas Johnston was sentenced to six years of imprisonment for defrauding investors of approximately $815,000.
In a public statement, ASIC said that Mr Johnston acted with his wife Maureen Johnston to secure funds from investors, lying about how the money would be used.
During the period January 2010 to November 2013, investors deposited money into a bank account of Small Business Management Pty Ltd on the basis that they would make returns on their investments.
In some cases, Mr Johnston set up SMSFs for investors, with the promise of managing the money on their behalf.
“The funds were then withdrawn as cash by the Johnstons, used to repay the Johnstons’ credit card debts, transferred to another account in the name of Maureen Johnston, used to pay new investor deposits in a Ponzi-style operation,” ASIC said.
In sentencing, her Honour Judge Wilmoth stated that Mr Johnston’s actions were “entrenched in dishonesty” and “showed a callous disregard for the trust placed in [Mr Johnson]”.
ASIC deputy chair Daniel Crennan said Mr Johnston, and his wife Maureen, gained the trust of, and deliberately misled, their investors, many of which they met through the Collingwood Football Club.
“The couple went on to use investor funds for their own benefit. The sentences imposed on Maureen, and today on Douglas, demonstrate the types of outcomes ASIC, with the Commonwealth Director of Public Prosecutions, can achieve,” Mr Crennan said.
“This type of behaviour will not be tolerated by ASIC and will be pursued through the courts.”
The court set Mr Johnston a non-parole period of three years.
ASIC said that Maureen and Douglas Johnston were originally charged together on 20 December 2017. Mrs Johnston pleaded guilty in the County Court of Victoria and was sentenced to five years and six months of imprisonment.
Same sentence as George Pell received. Puts his short sentence in perspective. It seems money fraud is as bad, or ever worse, than systematic sexual abuse and abuse of power. There is something wrong in the sentencing laws.
Just to give some perspective to this crime and punishment – can you think of any bank executives who have stolen way more than this from their customers, being charged with anything?
Was he a qualified accountant, that is CA or similar.
This sentence serves as a warning for those professionals seeking to take financial advantage of their clients with a SMSF.
They will be out soon. But, did they get the $815,000 back off them or bankrupt them? Take all their assets off them as well.
The trem is way too short. Must be minimum term of 10 years. It was not a one action but many actions that should increase the term in jail nd I hope that their assets are taken as well.