Australia Sentences Accountant To Jail; Clients Suffer A$67 Million In Losses

Tom Burroughes

15 August 2014

An accountant in Australia has been sentenced to five years and eight months in jail for running illegal investment schemes, causing clients losses of at least A$67 million ($62.4 million), according to the country’s financial regulator.

South Yarra accountant, Mark Ronald Letten, was yesterday sentenced by Melbourne County Court on charges brought by the Australian Securities and Investment Commission, or ASIC.

Letten had earlier pleaded guilty to 27 charges under the Corporations Act 2001, including operating 21 unregistered managed investment schemes relating to property development, ASIC said in a statement on its website.

The 60-year-old man, who was the former director of LGH Holdings Ltd (in liquidation) and the principal of the accounting firm Lettens Pty Ltd, formerly The Letten Group, had also admitted to dishonestly using his position as a director involving the use of investor funds more than A$533,000 and of carrying on a financial services business without an Australian financial services (AFS) licence, the statement said.

Letten must serve three years jail before being eligible for release, it said.

Between 1998 and 2010, more than 1,000 investors, the majority of whom were sourced through Mr Letten's accountancy practice, placed more than $100 million in investment property schemes in Australia and New Zealand. Letten managed and promoted the projects through a number of companies, including LGH Holdings Ltd.

The companies and unregistered schemes were wound up following a number of applications by ASIC in the Federal Court of Victoria, commencing in 2010. Investors suffered losses of at least A$67 million in the schemes.

In sentencing, the judge found the non-registration of the schemes and absence of associated investor protections had contributed significantly to the loss.

ASIC Chairman Greg Medcraft said: “Mr Letten acted in complete disregard for the law and with little concern for the interests of the investors. His jailing should send a strong message to company directors and scheme operators about the serious consequences of operating property investment schemes outside the legal requirements.”

The Commonwealth Director of Public Prosecutions prosecuted the matter.