Adviser sentenced to 10 years jail

Kerry John Burke has become the second financial planner in little more than a year to be sentenced with a 10 year jail term for misuse of client funds, according to the Australian Securities and Investments Commission (ASIC).

In June last year, Perth based financial planner Anastasis Darcy Papas was the first to be sentenced for 10 years in jail for stealing $703,000 from family, friends and trusted colleagues. The highest conviction, however, still stands with West Australian Robin Greenburg who was sentenced to 17 years jail in 1992 for embezzling $4,063,184.

Late last week Burke, a former investment adviser from Tweed Heads, NSW, was sentenced to a 10 year jail term with a non-parole period of seven and a half years after he pleaded guilty to 50 charges relating to the misuse of more than $5.4 million of his client’s funds.

Burke pleaded guilty to 11 charges of fraudulent use of false instruments and 39 charges of dishonestly obtaining a financial advantage for companies associated with him.

He admitted to ASIC the $5.4 million was used to prop-up businesses that he was associated with and admitted to borrowing investors’ funds for betting purposes and for the purchase of race horses.

As well as bringing charges against Burke, ASIC has also brought proceedings in the NSW Supreme Court to have liquidators appointed to five companies associated with him. The liquidator’s reports revealed that more than 60 clients had invested roughly $10 million through Burke and his companies.

The regulator has also obtained orders permanently restraining Burke from operating a securities and investment advice business, managing an unregistered managed investment scheme and disposing of or dealing with any money received in relation to trading in securities.

ASIC uncovered Burke’s dishonest activity in June last year after Burke conducted an investment advisory business despite having his authority revoked earlier in the year through his business, KJ Burke & Associates.

The Australian Federal Police unit attached to the Gold Coast Regional Headquarters also helped in Burke’s investigation.

In another ASIC banning, Leonard John Smith was today given seven year's jail in connection with the British Marine Bank fraud.

Smith was sentenced in the Queensland District Court after being found guilty on 22 charges involving intentional fraud of $870,000. He had solicited loans for the British Marine Bank, which was a fictitious entity invented by Sydney fraudster George Balos.

In September last year, Balos, the major promoter of the British Marine Bank fraud, was sentenced to 11 year's jail by the District Court of New South Wales after being found guilty on 46 fraud-related charges.