Athan Papoulias of Brighton Le Sands, NSW, has pleaded guilty in the Downing Centre Local Court to one charge of carrying on a financial services business, reckless about the fact that it did not have the required licence and one charge of dealing in the proceeds of crime worth $100,000 or more, reckless to it being the proceeds of crime.
Mr Papoulias has pleaded guilty to carrying on an unlicensed financial services business between about 2 November 2016 and 21 April 2017.
Mr Papoulias has also pleaded guilty to dealing in proceeds of crime in that period, in the form of commissions for promoting investments in Courtenay House, while being reckless about the fact that the commissions were proceeds of crime derived from the carrying on of an unlicensed financial services business. Mr Papoulias received approximately $670,860 in commissions by attracting investors to Courtenay House.
On 8 November 2022, Tony Iervasi pleaded guilty to five criminal charges regarding offences committed when he was the director of Courtenay House, which raised around $180 million from around 585 investors (22-307MR).
ASIC alleges that the Courtenay House companies represented to investors that their funds would be traded in the Forex and Futures markets when only a small proportion of funds were traded. Instead, monthly amounts were paid to investors representing that they were from trading. This is referred to as a Ponzi scheme.
It is not alleged that Mr Papoulias was aware that only a small amount of investors’ capital was ever traded, or that he knew the trading business was a Ponzi scheme.
Upon pleading guilty to the charges, Mr Papoulias was committed to Sydney District Court for sentence, which will occur on a date yet to be fixed. Mr Papoulias’ first appearance before that Court will be on 20 January 2023.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral by ASIC.
The maximum penalty at the time for carrying on a financial services business without an Australian Financial Services license was 2 years imprisonment, a fine of $36,000 or both. The maximum penalty at the time for dealing with the proceeds of crime, reckless to it being proceeds of crime was 10 years imprisonment, a fine of $108,000 or both.
The Courtenay House companies appointed liquidators on 16 May 2017 (Courtenay House Key Matters page).
On the application of ASIC, the Supreme Court of NSW made interim orders on 1 May 2017 against Tony Iervasi, Mr Papoulias, Courtenay House, Courtenay House Trading Group (and others) by consent.
These orders prevented those parties from carrying on a financial services business in Australia and limited the extent to which they could deal with their cash and other assets. ASIC sought these orders to preserve funds that might be available for the benefit of investors in the Courtenay House companies who had lost money and to prevent these companies from accepting further funds from investors.
Athan Papoulias appeared at the Sydney District Court on 20 January 2023. Sentencing has been adjourned to 24 April 2023 with a one-day estimate.