ASIC said that Douglas Johnston, a former accountant, was handed the sentence on Tuesday (4 June) after a two-week trial found he had defrauded investors to the tune of around $815,000.
In a statement, the regulator said that Mr Johnston, together with his wife Maureen Johnston, secured funds from investors between January 2010 and November 2013, which were deposited into a bank account belonging to Small Business Management Pty Ltd.
According to the regulator, clients had paid the money on the understanding that the Johnstons would invest them on their behalf. However, it said the funds were instead withdrawn by the couple to pay personal credit card debts or transferred into another account in Maureen Johnston’s name.
Some of the funds were used to pay new investor deposits in a Ponzi-style arrangement, ASIC said.
The couple had been charged together on 20 December 2017. In December last year, Mr Johnston’s wife was sentenced to five and a half years, after pleading guilty to three charges over the obtaining of $1.027 million from clients in what ASIC described at the time as “bogus property developments”.
“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,” ASIC deputy chair Daniel Crennan QC said in response to the latest court ruling.
“The sentences imposed on Maureen, and today on Douglas, demonstrate the types of outcomes ASIC, with the Commonwealth Director of Public Prosecutions, can achieve. This type of behaviour will not be tolerated by ASIC and will be pursued through the courts.”