Mr Karl Heinz Hermann Veljkovic of Beaconsfield, Victoria has been sentenced to four months imprisonment wholly suspended with a requirement that he enter into a recognisance in the amount of $10,000 to be of good behaviour for five years following an investigation by the Australian Securities and Investments Commission (ASIC).

Mr Veljkovic pleaded guilty in the Melbourne Magistrates Court to one charge of carrying on a financial services business without holding an Australian Financial Services Licence (AFSL).

ASIC found that between 1 August 2003 and 31 December 2006, Mr Veljkovic and Mr Barry Patrick induced approximately 40 investors to invest in three property development schemes. E.K.B Properties raised approximately $4 million, Sandgrove Specialised Securities Ltd raised approximately $1.5 million and Cardinia Specialised Securities Ltd raised approximately $1 million.

Mr Patrick of Frankston, Victoria has already pleaded guilty in the Melbourne Magistrate Court to one charge of carrying on a financial services business without holding an AFSL and three charges of managing a corporation whilst disqualified. On 30 November 2010, Mr Patrick was sentenced to four months imprisonment wholly suspended with a requirement that he enter into a recognisance in the amount of $10,000 to be of good behaviour for five years (refer to 10-257AD).

None of the investors have been repaid.

The Commonwealth Director Public Prosecutions prosecuted the matter.

Background

In February 2007, following an ASIC application, the Federal Court appointed Mr Simon Wallace-Smith and Mr Timothy Bryce Norman of Deloitte as liquidators of the entities controlled and/or managed by Mr Veljkovic and Mr Patrick, E.K.B Properties Pty Ltd, Sandgrove Specialised Securities Ltd and Cardinia Specialised Securities Ltd (refer MR07-29).

Mr Veljkovic and Mr Patrick also consented to Federal Court orders banning them from:

• carrying on a financial services business
• parting with any funds that have come into their possession by issuing, selling or offering a financial product, and
• managing corporations for a period of 20 years.