Architect of $180m Courtenay House Ponzi scheme, Tony Iervasi, sentenced to 11 years prison

Tony Iervasi, the former sole director of Courtenay House, will spend at least seven years behind bars for his part in the Bondi Junction-based scheme which has already netted two affiliates of the scam on criminal charged brought by the Australian Securities and Investments Commission (ASIC).

Iervasi, of Tweed Heads, pleaded guilty at Sydney’s Downing Centre Local Court in 2022 to criminal charges brought by ASIC in relation to the Courtenay House scheme which lured investors on the promise of high returns from futures and foreign exchange currency trading.

Investigations by ASIC showed that only a fraction of the funds was used for trading purposes, with the remainder applied to make prescribed payments to investors and to fund Iervasi’s personal lifestyle expenses.

Iervasi admitted that, as director of Courtenay House Pty Ltd and Courtenay House Capital Trading Group Pty Ltd, he conducted a $180 million Ponzi scheme that extracted money from 585 investors over the course of more than six years before the businesses entered liquidation in May 2017.

ASIC says the 11-year sentence handed down by the Supreme Court of NSW yesterday included a “significant discount” following Iervasi’s guilty plea in addition to other factors.

“ASIC pursued this matter as part of our commitment to protect investors,” says ASIC deputy chair Sarah Court.

“Mr Iervasi’s actions betrayed the trust of his clients and inflicted damage on hundreds of people. (The) sentence demonstrates that such deliberate fraudulent activities will not be tolerated.”
In handing down the sentence yesterday, Justice Sweeney described Iervasi as dishonest on an “egregious scale”, “establishing the veneer of a successful wealth-creating business ... which sought to reassure and persuade victims to invest”.

Justice Sweeney took into account “the total period of offending, of about 6.5 years, the nature and circumstances of the offending; which included sustained deceit, the large number of victims, the total amount of money they deposited, the total net loss to victims of $54 million, and the total amount of dishonestly obtained funds used for the offender's benefit, of about $12 million”.

“As well as the loss of life savings and family homes, the harm went beyond financial losses to breakdowns of marriages and family relationships, emotional, physical and mental health issues, and the need to delay retirement or resume working in the face of a loss of financial security in their mature years,” Justice Sweeney said in sentencing Iervasi yesterday.

Iervasi pleaded guilty to four offences of engaging in dishonest conduct in relation to a financial product or financial service between 13 December 2010 and 21 April 2017. At the time he was the sole director and shareholder of Courtenay House, which raised about $180 million from investors.

Iervasi also pleaded guilty to an offence of carrying on an unlicensed financial services business and admitted guilt in relation to two further offences in relation to relating to the provision of financial services or products.

The Courtenay House companies, which were based at Bondi Junction in Sydney, represented to investors that their funds would be traded in forex and futures markets. However, only around 3 per cent of the funds they deposited were actually traded.

Instead, Courtenay House paid monthly distributions to investors from funds deposited by new investors – a practice that Iervasi admitted to being a Ponzi scheme.

Investigations by ASIC have subsequently led to two other criminal prosecutions in relation to the Courtenay House scheme.

In May last year, former contractor to and promoter of the scheme Athan Papoulias was sentenced to two years’ imprisonment for his role in the unlicensed financial services business. The sentence was to be served by way of an intensive corrections order, including 120 hours of community service.

In March this year, a second promoter of the scheme – David Spina of Croydon in NSW – also pleaded guilty to criminal charges, including dealing with the proceeds of crime. Spina has yet to be sentenced.

Meanwhile, the liquidation of Courtenay House Capital Trading is continuing with ASIC revealing that liquidators have distributed dividends of 28c in the dollar to creditors.