Former Courtenay House affiliate Athan Papoulias sentenced for dealing in proceeds of crime

Former Courtenay House affiliate Athan Papoulias sentenced for dealing in proceeds of crime

A former contractor to and promoter of Courtenay House, which went into liquidation in 2017, has been sentenced to two years’ imprisonment for his role in the unlicensed financial services business.

Athan Papoulias’ sentence, which will be served by way of an intensive corrections order and also includes 120 hours of community service, comes after the former sole director of the financial services company, Tony Iervasi, pleaded guilty to five criminal charges relating to the scheme in November last year.

The former contractor from Brighton Le Sands, NSW, pleaded guilty to one charge of carrying on an unlicensed financial services business between 2 November 2017 and 21 April 2017, reckless about the fact that the business did not have the required licence.

He also pleaded guilty to one charge of dealing in the proceeds of crime worth $100,000 or more, reckless as to it being derived from the carrying on of an unlicensed financial services business.

The Courtenay House companies entered liquidation in May 2017 having run a Ponzi scheme for six years that represented to 585 investors that their funds would be traded in the Forex and Futures markets when only a small proportion of funds were actually traded.

The company’s scheme saw monthly amounts paid to investors from the capital invested by others, with Courtenay House falsely representing that these amounts were returns from trading.

According to the Australian Securities and Investments Commission (ASIC), Papoulias was not aware that the funds were used to fuel a Ponzi scheme, but during the period in question the former contractor received commissions totalling $670,860 for promoting investments in Courtenay House.

Former director Iervasi was restricted from leaving Australia in May 2017, and in November 2022 pleaded guilty to five charges including engaging in dishonest conduct in relating to $180 million raised by the group of companies from around 585 investors.

“ASIC has taken civil action to freeze assets, assisted liquidators and is now seeing justice for investors through the criminal court,” ASIC deputy chair Sarah Court said.

“To ensure a fair and strong financial system, and to protect consumers, financial services businesses need to be licenced.

“Those promoting unlicenced businesses should not assume they are immune from criminal consequences.”

When handing down the sentence, Judge McHugh SC remarked that Papoulias’ actions had undermined public confidence in the regulatory regime of the financial services industry. The Judge also took into consideration Papoulias’ guilty plea.

As such, the former scheme promoter received a softer sentence than permissible under the law; the maximum penalty at the time for carrying on a financial services business without an Australian Financial Services license was two years imprisonment, a fine of $36,000 or both, while the maximum penalty at the time for dealing with the proceeds of crime, reckless to it being proceeds of crime was 10 years imprisonment, a fine of $108,000 or both.

In 2017, both Iervasi, Papoulias and the Courtenay House group were hit with orders preventing them from carrying on financial services in Australia and limiting 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,” ASIC said.

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