How jailed former adviser conned his victims out of $10m
Court documents have revealed how a former Melbourne financial adviser, who was sentenced last week, was able to steal millions from his clients.
Terence ‘Rio’ Nugara pleaded guilty to 37 charges of obtaining financial advantage by deception and two charges of theft last week and was sentenced on 5 October.
While working as a financial adviser at Skynet Financial Services, where he was a sole director, between 10 October 2014 and 9 January 2019, Nugara falsely represented to clients that he was developing properties in Melbourne and Bali from which they would receive high returns.
Victims were convinced they would receive returns as high as 98.9 per cent on their investment.
In most cases, clients were convinced to transfer their savings or roll over money held in their self-managed superannuation funds (SMSF) to invest in these bogus developments.
Money was rolled over into SMSF accounts Nugara had set up with the Commonwealth Bank of Australia (CBA) and he was given access to those SMSF accounts to make investments in the properties, in some cases the clients were unaware he had this access. These were then transferred into one of two accounts held at the Bank of Melbourne under the name of “Munro Investment Unit Trust” which had been opened in 2014.
In other cases, victims made direct payments to those accounts from their savings or super accounts.
Discovery
In March 2015, he was suspended by ASIC and then terminated in October 2016, but the court highlighted he continued to act as a financial adviser during this time and “a large portion” of the offending occurred this period.
After being suspended, he did not apply to any other licensees to reinstate his licence in order to continue operating.
“The fact that you had lost your licence did nothing to deter you from representing yourself as a licensed, trustworthy financial adviser to many of your victims,” Judge Trevor Wraight said.
The deception was uncovered by victims in various ways: two victims who had invested in a property in Sandringham, Melbourne noticed the original building had not been demolished and were met with excuses when they questioned the adviser.
But others were unaware until they were informed by organisations such as the Australian Taxation Office (ATO) or ASIC, by their solicitor or through forensic analysis.
On 15 August 2019, Nugara fled and resided in different countries including Indonesia, Mexico, Costa Rica, Panama, Nicaragua, Sri Lanka and Singapore before a police investigation commenced on 21 October 2019. He returned to Melbourne on 25 October 2022 where he was arrested by the police at Tullamarine Airport.
Forensic analysis found he received around $9 million by way of electronic transfer and cheque deposit. A further $1 million has since been identified to bring the total to more than $10 million.
Victim impact
In the sentencing documents from the County Court of Victoria, Judge Wraight detailed how Nugara’s actions had impacted his clients.
Victim impact statements from 18 of the 38 victims spoke of suffering “financial devastation” as a result of the deception. Nugara stole $1 million from two clients each, five lost more than $500,000, and the smallest amount was $50,000, totalling over $10 million.
“Some have been compelled to sell their homes in order to adjust to their reduced financial circumstances, others have had to delay retirement or apply for Centrelink. The victims who engaged solicitors to try to recoup their money from you are now out of pocket for those legal costs.
“In many cases, the financial strain you have caused your victims has impacted upon their marriages, friendships and other social relationships, especially in cases where victims, unaware of your deceit, referred their friends and family members to you in the belief that they were involving them in a lucrative investment opportunity.
“You had pre-existing relationships with many of the victims, having managed their finances and investments prior to the commencement of your offending. These victims describe how you would lull them into a false sense of security, with one victim in particular noting how you would visit her at her retirement home, bringing flowers and taking her out to lunch. Another one of your victims was your former personal trainer. You encouraged him to invest in your schemes and also encouraged him to get his parents involved.”
Fourteen of the victims have had some or all of the money repaid by IOOF, a financial institution that has taken over the Financial Services Partners (FSP). Skynet had been a licensed, authorised representative of FSP until 10 October 2016, during which time it was owned by ANZ.
He was sentenced to nine years and 11 months’ jail, and Judge Wraight ordered him to serve six years and six months before becoming eligible for parole.
If he had not pled guilty, the judge said his sentence would have been 13 years with a non-parole period of nine years and six months.
He was permanently banned by ASIC from providing financial services in April 2023.
AUTHOR
Laura Dew
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Congrats on this article.... Interesting that MM has moved from cutting and pasting ASIC press releases into what would be described actual journalism.
Shows that a Diploma of Financial Planning merely exists to give you the tools to talk the walk. No investment made since entry in 2009 to further qualifications should have been a warning sign.