Australia’s corporate regulators have achieved two big wins in the WA Supreme Court in the past week, in cases involving events in 1998.
Australia’s corporate regulators have achieved two big wins in the WA Supreme Court in the past week, in cases involving events in 1998.
Tax accountants Walter Tieleman and Sean Pearce from Perth firm McKessar Tieleman, along with Melbourne-based accountant Stephen Wharton, were convicted last week of conspiracy to defraud the Commonwealth.
The convictions related to their involvement in Servcom, a tax effective managed investment scheme sold to hundreds of Goldfields investors.
The three men have been remanded in custody and will be sentenced next week.
Their convictions follow the jailing earlier this year of Servcom promoters Tarek (Terry) Wahby and Lawrence Aistrope, who pleaded guilty to the same charge and were sentenced to terms of three years.
The second matter relates to a long-running inquiry into former directors and shareholders of Welcome Stranger Mining Company (now Commsecure) and Hallmark Gold (now Hallmark Consolidated), believed to be Adrian Corp and Brian Smith.
In the latest development, the Supreme Court approved the automatic confiscation of $3.7 million arising from the sale of shares in Welcome Stranger.
The Australian Securities and Investments Commission has been investigating the beneficial ownership of the shares, which had been held by Channel Islands company Centurion Trust.
Its deputy executive director of enforcement Mark Steward said: “ASIC will be tenacious, despite cross border obstacles, in taking action where it believes the beneficial ownership of significant parcels of shares has been concealed”.
In a judgement handed down last week, Justice Roberts-Smith said the Director of Public Prosecutions “would likely apply against Smith for a crime-used property substitution declaration and a criminal benefits declaration”.
Mr Smith has promoted several sharemarket floats over the past decade and been a director of a number of listed companies, including Chemeq and Bigshop.com.au
The ASIC investigation led to Mr Corp being arrested and charged with 85 offences in January.
At the time of the arrest, ASIC alleged that Mr Corp warehoused shares in Hallmark Gold and Welcome Stranger through offshore entities registered in the British Virgin Islands and Gibraltar. It also alleged that the warehoused shares were used by Mr Corp to vote on related party resolutions that delivered him a benefit.
In the Servcom case, scheme promoters Wahby and Aistrope assisted the prosecution of the three accountants.
Servcom was promoted as an Internet franchise and involved the sale of 5,000 names randomly selected from phone books.
The company sold 1,160 franchises, ostensibly worth $39,500 each.
Investors paid a small administration fee but qualified for an immediate $8,000 tax refund based on supposed financing arrangements.
In a letter to “the clients and friends of McKessar Tieleman”, the firm said Messrs Tieleman and Pearce would be appealing the conviction.
“The verdict has come as an enormous shock to everyone who knows Walter and Sean personally, or has worked closely with them,” the letter says.
“There is no doubt that should the decision be sustained it will have an unimaginable impact on them and their families, but will also have ramifications for the profession as a whole.”
It is expected the Commonwealth DPP will submit that Messrs Tieleman, Pearce and Wharton should be given longer sentences than the two promoters.
Mr Wahby, who returned voluntarily to Australia after several years in Egypt, was sentenced to three years with a non-parole period of 14 months.
Mr Aistrope was sentenced to three years but with a non-parole period of 10 months.
