Three men connected to the Sterling Income Trust (SIT) are each facing numerous criminal charges following ASIC’s investigation into the collapse of the Sterling First group of companies.
Raymond Jones, founder of the Sterling Group, and Simon Bell have each been charged with 11 charges of aiding and abetting Sterling Corporate Services to engage in dishonest conduct in relation to a financial product or service, in breach of section 1041G of the Corporations Act.
Ryan Jones, the son of Raymond Jones, has also been charged with 10 charges of aiding and abetting Sterling Corporate Services to engage in dishonest conduct in relation to a financial product or service.
Sterling Corporate Services was the Investment Manager of the SIT, which was registered as a managed investment scheme with ASIC in 2012.
All three men appeared in the Perth Magistrates Court on 3 November 2023.
This matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
Background
The maximum penalty for an offence against section 1041G relevant for the period of the alleged misconduct is 10 years’ imprisonment and/or a fine of 4,500 penalty units ($945,000).
From 2016, the Sterling Group offered a long-term residential lease to retirees and seniors called a Sterling New Life Lease (SNLL). Purchasing a SNLL required an upfront investment to be made in the SIT to fund ongoing lease payments.
On 9 August 2017, ASIC issued an interim stop order on Product Disclosure Statements (PDS) issued by Theta Asset Management Ltd (Theta) offering investments in the SIT. On 29 August 2017, Theta consented to a final stop order being made by ASIC, which meant that no offers, issues, sales or transfers of interests in the SIT could be made until an updated PDS was approved for use. Theta did not issue an updated PDS until 27 October 2017 (17-316MR).
The Sterling First group of companies collapsed in May 2019. Following the collapse, many SNLL tenants found themselves homeless as they were unable to meet lease payments under the SNLL.
Editor's note 1:
Following a mention on 7 February 2024, the matters of all three men were adjourned to 1 May 2024.