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16-135MR South Australian director charged with misappropriating $1.8 million in SMSF property investments
Following an ASIC investigation, Mr George John Nowak has appeared in the Adelaide Magistrates Court charged with thirty one counts of deception and one count of dishonest dealings with documents.
ASIC investigated Mr Nowak's conduct in dealing with members of self-managed superannuation funds (SMSFs) who were undertaking property purchases offered by companies of which he was a director, including EJ Property Developments Pty Ltd. It is alleged that Mr Nowak misappropriated $1.8 million in SMSF monies by not holding funds in a designated account and by not applying those funds towards the intended property purchase.
Mr Nowak was not required to enter a plea and was granted conditional bail. The matter is listed for return at the Adelaide Magistrates Court on 12 July 2016.
The Commonwealth Director of Public Prosecutions is prosecuting these matters.
The charges of deception contrary to section 139(b) of the SA Criminal Law Consolidation Act 1935 each carry a maximum penalty of ten years imprisonment.
The charge of dishonest dealings with documents contrary to section 140 of the SA Criminal Law Consolidation Act 1935 carries a maximum penalty of ten years imprisonment.
In 2012 in response to the growth in SMSFs, ASIC established the SMSF Taskforce. The Taskforce continues to meet regularly to examine high-risk and emerging SMSF issues such as property spruiking to SMSFs, unlicensed conduct and false and misleading advertising of SMSFs.
Outcomes and actions stemming from the SMSF Taskforce include:
- ASIC accepted an enforceable undertaking (EU) from CMH Financial Group Pty Ltd and the sole director, Daniel White, after an ASIC surveillance found CMH had failed to provide advice about self-managed superannuation funds that was appropriate and in the best interests of clients (refer 16-097MR);
- Ms Sarah Jane Busteed was charged with three counts of dishonestly obtaining a financial advantage by deception and one count of dealing with over $100,000 that was the proceeds of crime (refer: 16-040MR);
- Superannuation Warehouse Australia Pty Ltd was ordered to pay a penalty of $25,000 for false and misleading“Free SMSF Setup” advertising (refer: 15-332MR).
- The Supreme Court of NSW found Park Trent Properties Group Pty Ltd had been unlawfully carrying on a financial services business for over 5 years by providing advice to clients to purchase investment properties through a SMSF (refer: 15-300MR).
- Dixon Advisory Group Limited complied with two ASIC infringement notices, paying two $10,200 penalties after including potentially misleading claims on its website (refer: 15-207MR).
- The credit licence of Queensland-based Smithson & Baye was cancelled following an investigation into a property and SMSF promoting group (refer: 15-228MR)
- ASIC released two information sheets to improve the quality of advice provided by advisers on SMSFs: Information Sheet 205 Advice on self-managed superannuation funds: Disclosure of risks (INFO 205) and Information Sheet 206 Advice on self-managed superannuation funds: Disclosure of costs (INFO 206) (refer 15-192MR).
- Omniwealth Services paid a $10,200 penalty for potentially misleading claims on its website (refer: 15-190MR).
- The principal of Sherwin Financial Planners, Bradley Thomas Sherwin, was charged with fraud. The charges relate to the use of SMSFs of former clients of Sherwin Financial Planners (refer: 15-158MR).
- The Federal Court of Australia ruled that Craig Gore and several other parties and financial services businesses, including Queensland-based ActiveSuper and Royale Capital, contravened sections of the Corporations Act or were knowingly concerned in those contraventions. (refer: 15-134MR)
- Australian Financial Planning Solutions Pty Ltd paid $10,200 in penalties for potentially misleading SMSF ads (refer: 15-052MR).
- ASIC banned the founder of the Charterhill Group of Companies, George Nowak, from providing financial services until 3 July 2017 on the basis that Mr Nowak is an undischarged bankrupt (refer: 15-048MR).
- Interprac Financial Planning agreed to address ASIC concerns relating to advice provided to some clients about SMSFs (refer: 14-258MR).
- Sentry Financial Services agreed to address ASIC concerns about SMSF advice provided to clients (refer: 14-109MR).
- SuperHelp Australia paid a $10,200 penalty after making potentially misleading statements about the cost of setting up SMSF (refer: 14-051MR).
- Media Super paid $10,200 in penalties for potentially misleading SMSF ads (refer: 14-001MR).
- Spring Financial Group entered into an enforceable undertaking following ASIC concerns about the level of monitoring and supervision of its representatives (refer: 13-263MR).
- Anne Street Partners agreed to engage an independent expert following ASIC concerns about SMSF advice provided to clients (refer: 13-248MR).
- We published Report 337 Improving the quality of advice given to SMSF investors. (refer: 13-081MR).
SMSFs will continue to be a focus in ASICs enforcement work.
On 12 July 2016, declarations were filed at the Adelaide Magistrates Court. The matter was listed for return on 22 September 2016 in the Adelaide Magistrates Court for Mr Nowak to enter a plea.
Editor's note 2:
On 22 September 2016, the matter was adjourned until 13 October 2016.
Editor's note 3:
On 13 October 2016, the matter was adjourned until 10 November 2016.
Editor's note 4:
The matter has been further adjourned until 19 January 2017.
Editor's note 5:
On 19 January 2017 the matter was further adjourned to 23 February 2017.
Editor's note 6:
On 3 May 2017 the matter was further adjourned to 31 May 2017.
Editor's note 7:
On 31 May 2017, the matter was adjourned to 19 July 2017.
Editor's note 8:
On 19 July 2017, the matter was adjourned to 29 August 2017.
Editor's Note 9:
On 29 August 2017 the matter was further adjourned to 5 October 2017 for legal argument.
Editor's note 10:
On 5 October 2017, the matter was adjourned to 23 November 2017.
Editor's note 11:
On 23 November 2017, the matter was adjourned to 2 March 2018 for witness examination.
Editor's note 12:
The witness examination is now listed for 4 May 2018.
Editor's note 13:
The matter has now been listed for legal argument on 29 August 2018.
Editor's note 14:
On 29 August 2018, the matter was adjourned to 5 October 2018.
Editor's note 15:
On 5 October 2018, Mr Nowak was committed for trial on all 23 charges and the matter has been listed for arraignment in the District Court of South Australia on 23 November 2018.
Editor's note 16:
Mr Nowak’s trial has been listed in the South Australian District Court to commence on 3 February 2020. There will be a direction hearing on 30 January 2019.
Editor's note 17:
The matter has been listed for a further directions hearing in the South Australian District Court on 27 March 2019.
Editor's note 18:
On 19 February 2020, Mr Nowak subsequently pleaded guilty to 18 charges part way through his trial. Refer 20-043 MR.