ASIC has permanently banned Shaun Gregory Morgan from providing financial services as a result of a conviction for serious fraud.

Court documents established that on 22 December 2009 Mr Morgan pleaded guilty to one count of bank fraud in the United States District Court, Central District of Utah involving false claims to be able to raise capital, and counterfeit cheques drawn on a fictitious bank. As a consequence, Mr Morgan was sentenced to a term of 60 months imprisonment and a term of supervised release of 60 months. He was also required to forfeit US$1.06 million in cash and stock certificates along with other assets.

Mr Morgan, a New Zealand citizen, was the subject of a recent ASIC consumer warning (refer: 15-016 MR) concerning his offering of unlicensed financial services through a number of websites that indicated companies operated by him held Australian financial services (AFS) licences and would raise funds.

ASIC Commissioner John Price said, ‘ASIC will take strong action to ensure people who have a history of fraudulent conduct are not permitted to work in the financial services industry.’

Mr Morgan has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.

Background

According to court documents, Mr Morgan’s conviction in the United States for bank fraud arose from a scheme he devised between November 2007 and April 2008 to defraud and to obtain money or property by means of a false and fraudulent representations to financial institutions, mortgage companies and third parties.

Mr Morgan represented that he was an officer of First Mutual bank a fictitious bank located in the UK. He claimed that this bank had money available to purchase companies and properties, and to provide lines of credit and real estate bonds.

The scheme required borrowers to open an account at First Mutual as collateral or an advice fee for the line of credit or underwriting of the bonds. Mr Morgan admitted he used these deposits for his personal benefit.

On 24 January 2008 Mr Morgan agreed to provide a US$13 million line of credit to a borrower if collateral of US$2.5 million was provided. Mr Morgan told this borrower that the account had to be closed and that he would reimburse the borrower with a cashier's cheque.

Mr Morgan deposited a cashier’s cheque drawn on his fictitious bank into the borrower's account, with the borrower subsequently spending US$1.3 million. The borrower was subsequently notified by their bank that the cheque was counterfeit. Mr Morgan also provided another counterfeit cheque for US$ 2 million, which the borrower’s bank refused to honour.