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The scheme, which began in 2017 and traded as MyWealth Manager, primarily targeted the superannuation funds of Melbourne's Indian community who believed their funds were being invested in property developments.
Federal Court civil proceedings relating to the scheme were first brought by the Australian Securities and Investments Commission (ASIC) in 2019.
Defending the charges were Mustafa Mohammed, Mahek Mustafa, Mubashir Mohammed, MyWealth Manager Financial Services (trading as MyWealth Manager), MyWealth Protection, 3M Financial Planning (trading as MCube Planners) and Secure Investments.
The director of Secure Investments, Mudasir Mohammed Naseeruddin who is commonly known as Naseer or Mudasir, was this week arrested and charged with seven counts of dishonest conduct.
Naseeruddin's appearance Melbourne Magistrates' Court yesterday is a sequel to the extended investigation into the activities of the MyWealth Manager scheme.
The criminal charges stem from events that occurred after the initial civil proceedings were brought by ASIC against Secure Investments.
In addition to charges of dishonest conduct, Naseeruddin faces two counts of failing to exercise his power as a director and discharge his duty in good faith under the Corporations Act.
ASIC alleges that Naseeruddin dishonestly obtained superannuation funds from investors based on false representations, including representations that the funds would be invested in property development.
ASIC further alleges that Naseeruddin misused his position as a director of Secure Investments for his own benefit by using funds invested with the company to buy shares for himself in a security company.
Naseeruddin faces a maximum of 15 years in jail on each offence.
These charges stem from an earlier ASIC investigation into MyWealth Manager, an unregistered managed investment scheme that raised more than $7 million from 55 investors between 2017 and 2019.
Investors were encouraged to create self-managed super funds and forward their super savings to MyWealth Manager through an unsecured loan from which they would receive high interest returns.
ASIC alleged the defendants applied those funds for personal use, including payments to friends and family and in the promotion of cryptocurrency.
In May, ASIC launched new civil proceedings against Naseeruddin's companies Secure Investments and Aquila Group, a property development investor, seeking interim orders against the director and his companies from the Federal Court.
ASIC alleged that after issuing the original proceedings against Naseeruddin he had raised a further $250,000 from investors. The court ordered Secure Investments and Aquila Group to be wound up.
The Federal Court in October found that Secure Investments and Naseeruddin had breached the Corporations Act by operating a financial services business without an Australian financial services licence.
The court found that Secure Investments had raised about $2.4 million from 28 self-managed super funds between 2017 and 2019. It found that the property developments these funds were supposedly supporting did not materialise and instead that the funds were dispersed for other purposes without proper recording of transactions.
The criminal charges brought against Naseeruddinthis week have been adjourned for committal mention hearing on 6 April 2021.
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