Coast financial planner allegedly stole clients’ super
EXCLUSIVE: This financial planner allegedly took $1.4 million from clients' self-managed superannuation funds (SMSF) then used it to buy his daughter a new car, reduce his massive credit card bill and pay down his girlfriend's mortgage.
Details of the allegations directed at Brett Gordon are today revealed for the first time as part of an investigation that shows the cost of SMSF fraud and mismanagement has topped $100 billion over the past decade.
"I'm hoping I'll get my money back through whatever insurance there was," a doctor who was one of Mr Gordon's alleged victims and asked not to be named told News Corp Australia.
The Australian Securities and Investments Commission recently found 30 per cent of the more than one million Australians in SMSFs think they are insured against losses from wrongdoing, as is the case in traditional super. But they are not.
ASIC has been urging people with SMSFs to play closer attention to what advisers are doing with their retirement savings.
The regulator is believed to be expanding its crackdown on SMSF chicanery which has so far seen:
* Sydney woman Sarah Jane Busteed jailed for up to two years in June after she "dishonestly appropriated" money from SMSF clients investing in property; and
* Former Newcastle area financial adviser Nicholas Ellis plead guilty late last year to defrauding SMSFs investing in property.
Speaking generally, industry expert Alex Dunnin said the unsuspecting sometimes learn the hard way the $700 billion-plus SMSF sector is the "Wild West" of investment.
"It can be scary," Mr Dunnin, the head of research at Rainmaker, said.
"SMSF investors might think of themselves as regular consumers with normal rights but for the most part the law thinks of them as high end sophisticated investors who go into things eyes wide open," Mr Dunnin said.
"Undisciplined SMSF investors or naive ones are extremely vulnerable."
In documents filed with the Queensland Supreme Court, Mr Gordon is accused of misleading 10 SMSF clients who had tipped $1.4 million into what was supposed to be a property syndicate.
From that pot, Mr Gordon, of Peregian Springs on the Sunshine Coast, is alleged to have paid $41,000 off his credit cards, bought a $15,000 Kia hatch for his daughter and put $55,000 on his girlfriend Heather Swift's home loan.
In an affidavit filed with the court, Ms Swift said: "When I asked Brett where the money had come from he told me … he had transferred the money from his account to help me out for a while.
"I accepted Brett's explanation and had no reason to query him about it."
ASIC also alleges Mr Gordon took steps to "phoenix" assets into new companies of which Ms Swift was the sole director.
In her affidavit, Ms Swift said at the time she agreed to be the companies' director "I trusted Brett".
The primary school teacher said she prided herself on being an "honest person".
In his affidavit, Mr Gordon said Ms Swift had "no real involvement in the operation of the companies" and was not aware he had put the money on her home loan until after he had done it.
ASIC agreed and in early July said it was not proceeding with its application against Ms Swift and that no orders were to be made against her.
ASIC made submissions to the court including that nine days after $50,000 was transferred from the unnamed doctor's super fund to bank accounts controlled by Mr Gordon, $15,350 was on-sent to a Brisbane Kia dealership to pay for a new car for his daughter.
When News Corp Australia confronted him he denied wrongdoing.
He claimed there were mistakes in the forensic accounting done by ASIC.
"Things are not all that they seem," Mr Gordon said. "And everyone will get repaid. I will pay it personally."
ASIC would not comment. Its court action led to orders made in July this year that Mr Gordon be restrained from carrying on a financial services business and that the one he had been running be wound up.