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A former Fellow Chartered Accountant has pleaded guilty to 18 charges relating to misappropriating client SMSF money as the founder of a “one-stop shop” advice firm.
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Former FCA pleads guilty to misappropriating client funds
25 February 2020
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9 minute read
Founder of the Charterhill Group, George Nowak, of South Australia, has pleaded guilty to 17 counts of aggravated deception and one count of dishonest dealings with documents.
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The plea to 18 charges includes one representative charge that effectively covers six of the deception counts as one.
The charges laid against Mr Nowak concern the misappropriation of $1.2 million in SMSF money by not holding those funds in a designated account and by not applying those funds towards the intended property purchase.
ASIC’s investigations also found Mr Nowak was undertaking property purchases offered by companies of which he was a director, including EJ Property Developments Pty Ltd.
The charges of aggravated deception each carry a maximum penalty of 15 years in jail, and the dishonest dealings with documents charge carries a maximum of 10 years.
The Charterhill Group operated as a “one-stop shop”, providing advice to clients on the establishment of SMFS, rollover of existing superannuation funds into an SMSF, sourcing and purchase of investment properties, property management, insurance and taxation.
A number of companies under the group — including companies such as Lending Solutions International Pty Ltd, Nova Real Estate Pty Ltd, EJ Property Developments Pty Ltd, and Financial Wellness Pty Ltd — have since been placed under external control.
Documents filed with ASIC found the four related companies owed $19.1 million in debts at the time.
Mr Nowak was previously banned from providing financial services in March 2015 when the ASIC investigation found he had applied for personal bankruptcy in July 2014.
Days after the ban, a liquidators report was released that suggested the Charterhill Group may have traded while insolvent.
Chartered Accountants Australia and New Zealand (CA ANZ) then followed up in July 2015 by stripping Mr Nowak of his fellowship status, barring him from reinstatement and cancelling his membership.
Mr Nowak’s bail has since been revoked, with sentencing submissions adjourned to 19 March.
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