ASIC brings criminal charges against third individual in relation to Courtenay House

David Sipina, of Croydon, New South Wales, appeared in the Downing Centre Local Court on 21 February 2023, charged with criminal offenses relating to alleged misconduct at the Courtenay House group of companies.

Mr. Sipina is the third individual to face criminal charges after former director Tony Iervasi and former contractor Athan Papoulias were both charged. Mr. Iervasi and Mr. Papoulias have both pleaded guilty (22-307MR and 22-356MR). Mr. Sipina was engaged by Courtenay House Capital Trading Group to promote the Courtenay House business.

Mr. Sipina is facing one charge of carrying on a financial services business without a license, one charge of dealing in the proceeds of crime worth $1 million or more, and one charge of engaging in dishonest conduct about a financial product or service.

The charges relate to the Courtenay House group of companies, where it is alleged that around 585 investors paid over $180 million based on representations that their funds would be traded in the Forex and Futures markets when in fact only a small proportion of funds were traded. Instead, it is alleged that the majority of new investor funds were used to pay older investors, a fraudulent arrangement is known as a Ponzi scheme. Mr. Iervasi was the individual responsible for the Ponzi scheme and has been charged with and pleaded guilty to offenses relating to his role.

It is not alleged that Mr. Sipina or Mr. Papoulias was aware of the Ponzi scheme. However, it is alleged that their conduct facilitated the continuation of the Ponzi scheme and they derived benefits from it.

About Mr. Sipina, it is alleged that between 24 June 2015 and 21 April 2017:

Mr. Sipina carried on (with others) an unlicensed financial services business;
Mr. Sipina dealt with money or other property which was, and he believed to be, the proceeds of crime, in the form of commissions he received for promoting investments in Courtenay House despite it being unlicensed.
Separately, it is alleged that Mr. Sipina obtained personal information on false pretenses from investors and used that information to mislead representatives of the responsible entity for the Courtenay House Capital Investment Fund.

The matter is being prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral by ASIC.

The matter is listed for mention in the Downing Centre Local Court in Sydney on 18 April 2023.

The maximum penalty at the time for engaging in dishonest conduct about a financial product or service was 10 years imprisonment, a fine of $810,000, or both. The maximum penalty for operating without an Australian Financial Services license is two years imprisonment, a fine of $34,000, or both. For dealing with the proceeds of crime, believing it to be proceeds of crime, the maximum penalty is 25 years imprisonment, a fine of $204,000, or both.

The Courtenay House companies appointed liquidators on 16 May 2017 (Courtenay House Key Matters page).

On the application of ASIC, the Supreme Court of NSW made interim orders on 1 May 2017 against Tony Iervasi, Athan Papoulias, Mr. Sipina, Courtenay House, Courtenay House Trading Group (and others) by consent.

These orders prevented those parties from carrying on a financial services business in Australia and limited the extent to which they could deal with their cash and other assets. ASIC sought these orders to preserve funds that might be available for the benefit of investors in the Courtenay House companies who had lost money and to prevent these companies from accepting further funds from investors.

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