A businessman who defrauded a bio-pharmaceutical company of $394,000 has today been handed an immediate jail term of four years.
Fraudulent businessman William Ardrey has been sentenced to four years in prison and ordered to pay almost $400,000 compensation following a long-running investigation by a victim and a lengthy legal battle conducted by the state.
According to District Court Judge Laurie Levy’s sentencing remarks, the hefty sentence imposed on Ardrey reflected the nature of the 18 offences – a sophisticated fraud committed over an eight-month period aggravated by the fact that, as a non-executive director, he breached a position of trust.
Furthermore, Judge Levy came to the view that not only had Ardrey created a series of sham consulting arrangements through which payment ended up with him, he continued to perpetuate some aspects of this deceit in the trial by introducing concocted documents for the purpose of misleading the jury.
In addition, Judge Levy also rejected evidence by Ardrey’s wife, Susan, that some of the money in dispute was linked to an affair she was having or was a loan to support her parents.
Ardey was already a high-profile businessman in 2005 when the victim in this case, Perth bio-pharmaceutical company Phoenix Eagle, approached him. Having been awarded a doctorate from the University of Western Australia, he had risen to serve on the board of medical technology group CustomViz and then became CEO of listed biotech Regenera. He had been recognised for some of these achievements with a Business News 40under40 award in 2003.
Ardrey convinced the startup company to change the strategic direction of its plans to commercialise a therapeutic application of pawpaw produced by a process invented by one of the company’s founders.
His fraudulent strategy involved fast tracking commercialisation by using a series of consultants to create a package that could be licensed to big pharmaceutical companies. However, most of the consultants do not appear either to have existed, were not used, or did not have the required expertise.
Despite this, the company paid out around $394,000 on the basis of invoices provided by Ardrey, spent over the better part of a year, which proved, it argues, far more costly in terms of time and money.
Phoenix Eagle chairman Paul Wright said the result was big setback to the company’s plans, putting it about seven years behind its expected progress.
“The impact on Phoenix Eagle of Dr Ardrey’s fraudulent actions has been enormous,” Mr Wright said.
“Over the past seven years, directors have been paid little of their owed salary and fees, and have actually loaned money back to the company.
“Throughout this whole ordeal, Phoenix Eagle has never lost sight of its business objective to commercialise its lead pharmaceutical product, Opal A, which has previously been in clinical trials for the treatment of non-healing venous and pressure ulcers.”
Mitigating factors in Ardrey’s defence, Judge Levy said, were the long delay in bringing the matter to trial and the defendant’s agreement to repay the full amount defrauded, using the proceeds from the proposed sale of a New York condominium.
The court was told Phoenix Eagle was also taking civil action against Ardrey, seeking up to $1.84 million in compensation.
