Monday, 1 August 2011

Insolvency firm Jirsch Sutherland has begun clawing back money former Astarra Asset Management (AAM) director Shawn Richard paid out of his overseas bank account before becoming bankrupt.

Richard made numerous transactions from his Liechtenstein-based LGT Bank account prior to declaring bankruptcy, including a US$160,000 ($146,000) transfer to his parents in Canada, a representative of Jirsch Sutherland, Richard's bankruptcy trustee, said.

"The trustee demanded repayment of the US$160,000 from his parents," Jirsch Sutherland senior manager Michael Chan told InvestorDaily.

"Negotiations were conducted after and a settlement has been agreed on between the parties for a lesser amount."

Richard voluntarily entered bankruptcy in late January over the Trio Capita/AAM fraud and owed unsecured creditors about $3.22 million, a Jirsch Sutherland letter to the New South Wales Supreme Court said.

Most of the money is owed to National Australia Bank (NAB) and the debt was in relation to a "personal guarantee pertaining to loan accounts held by AAM" and Astarra Funds Management, it said.

Chan said NAB had made a formal claim of about $3.2 million against Richard.

NAB was unable to comment due to client confidentiality, a NAB spokesperson said.

The letter said that in terms of assets, Richard held nearly $40,000 in his Westpac bank accounts and also an undisclosed amount in the LGT Bank account.

The LGT account had nothing in it when Richard entered bankruptcy, Chan said.

"The funds in the LGT account was dispersed well before the bankruptcy occurred. It was dispersed over a period of time before the bankruptcy," he said.

However, Richard had provided limited assistance to Jirsch Sutherland in obtaining the LGT Bank statements and providing details of transactions in the account, he said.

"By him assisting us in getting the LGT Bank statements we are now able to determine where the money has been paid to as per the details on the bank statements from the LGT account," he said.

Jirsch Sutherland would be looking to claw back other transactions where possible, he said.

"There is definitely a significant amount that needs further investigation. The crux of the investigation is the LGT account," he said.

Richard was jailed on 22 July after a NSW Supreme Court judge convicted him of dishonest conduct while running a financial services business.

Last year, he pleaded guilty to two charges of dishonest conduct while running AAM and admitted to a third charge of making false statements in relation to financial products following an ASIC investigation.

The charges each carry a maximum penalty of five years' imprisonment or a $220,000 fine, or both.

Richard's sentencing is scheduled for 12 August.

"Mr Richard, in respect of the two counts of the indictment to which you pleaded guilty, I convict you on both," Justice Peter Garling said during the hearing.

"However, it is proper that I indicate to you that I will be imposing a sentencing of imprisonment.

"I wish, however, to proceed carefully given the evidence that is presented before me and the submissions on behalf of the crown and on your behalf."

It is alleged Richard dishonestly received undisclosed payments in his role as investment manager of the Astarra Strategic Fund (ASF) and Astarra Superannuation Plan (ASP).

ASIC alleged Richard and AAM received in excess of $6.4 million in undisclosed payments.



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