SMSF trustee appears in court

A former trustee of the self-managed superannuation fund Little Super Fund (LSF) appeared in Sydney’s Downing Centre Local Court yesterday in relation to a criminal charge brought by the Australian Securities and Investments Commission (ASIC).

Gerard Little was charged after ASIC found he failed to ensure the LSF was maintained in accordance with the sole purpose test.

ASIC alleged that preserved superannuation benefits of 121 superannuants, totalling over $3.5 million, were deposited into LSF’s bank accounts and that these funds were rolled over from 11 complying superannuation funds.

Little is accused of then using the LSF to obtain unlawful early access to these benefits by withdrawing and distributing the funds to the superannuants, while keeping over $685,000 as commission.

ASIC further alleged that, at the time the LSF received the superannuation benefits from the complying superannuation funds, Little understood his obligation to preserve the benefits until the superannuants had satisfied a condition of release, but had no intention of doing so.

ASIC initiated civil proceedings against Little in May 2007 following allegations he was involved in the operation of an unlicensed financial services business offering people early access to their superannuation funds. Little was prevented from providing financial services, dealing with or disposing of any assets on behalf of the LSF, and dealing with or disposing of any money he held except for the payment of ordinary living expenses and legal fees.

The Commonwealth Director of Public Prosecutions is prosecuting the matter, which returns to the Downing Centre Local Court on December 16, 2008.