On 20.7.2021, a former property developer, in Queensland, lost his appeal, against convictions for 6 counts of fraud, which carried a 5 year jail sentence (2 years non-parole). The facts proven were that he solicited about $800k of loans from SMSFs, on behalf of a company, which he knew had no real prospect of being able to repay (much less, with the interest at the rates promised).

See below for further details.

[Tax Month – July 2021]

 

 

On 20 July 2021, the Queensland Court of Appeal dismissed an appeal by Mr Craig Kirrin Gore against his conviction on six counts of fraud.

The facts were these.

  • Mr Gore was initially arrested on 14 April 2017 and charged with 12 counts of fraud relating to funds obtained from investors during 2013 and 2014. ASIC alleged Mr Gore obtained funds from self-managed superannuation fund (SMSF) investors through his role at Arion Financial Pty Ltd (Arion) by representing that the investors could invest in debentures, with various promises that included a guaranteed return, high returns, and that the funds could be returned after a short-term period of investment. (17-11MR)  He was not a director of the company, but he had the day to day management of company’s affairs, through representing himself as a “consultant” and/or “sales manager”.
  • In October 2020, Mr Gore was found guilty of six counts of fraud. The Queensland District Court found Mr Gore was aware of the poor financial state of Arion at the time representations were made and that there was no real prospect of Arion repaying the invested amounts or the interest (20-258MR).
  • The six counts that were dropped, were representations made before the Defendant knew of a major debt to the ATO, which was what affected the company’s capacity to repay the moneys borrowed.
  • Mr Gore has been serving his sentence since he was remanded in custody in October 2020.
  • In November 2020, Mr Gore was sentenced to five years prison with a non-parole period of two years, after being found guilty of the fraud charges (20-299MR). Mr Gore lodged an appeal in November 2020 and that appeal was heard in February 2021.

The Court of Appeal found it was open to the trial judge to convict on the 6 counts of fraud and that the evidence demonstrated the former developer had continued to secure funds from the investors after December 2013, without disclosing there was no real prospect of them being repaid.

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.

Catchwords

CRIMINAL LAW – APPEAL AND NEW TRIAL – VERDICT UNREASONABLE OR INSUPPORTABLE HAVING REGARD TO THE EVIDENCE – APPEAL DISMISSED – where the appellant was charged with 12 counts of fraud – where the appellant was convicted on six counts after a trial by judge alone – where the relevant issue at trial was whether the appellant was dishonest when he induced investors to make various loans – where the dishonesty was particularised as certain knowledge of the financial position of the investment companies, through which the investments were made – where the trial judge found that a debt owing to the ATO was a significant factor in assessing the appellant’s knowledge – where the appellant was found to have dishonestly gained a benefit or advantage by inducing the complainants to make an investment after he had knowledge of, among other things, the ATO debt – where the trial judge acquitted the appellant of charges relating to investments made before the appellant had knowledge of the ATO debt – whether there were inconsistent verdicts – whether, in relying on certain evidence for the convictions, the trial judge denied the appellant the full benefit of his acquittals – whether the it was open to the trial judge to convict.
CRIMINAL LAW – APPEAL AND NEW TRIAL – VERDICT UNREASONABLE OR INSUPPORTABLE HAVING REGARD TO THE EVIDENCE – APPEAL DISMISSED – where the appellant was charged with 12 counts of fraud – where the appellant was convicted on six counts after a trial by judge alone – whether there was sufficient evidence to support findings made by the trial judge – whether it was open to the trial judge to convict

(R v Gore [2021] QCA 147 (Queensland Court of Appeal, Morrison and McMurdo JJA and Burns J, 20 July 2021).

Additional charges still to be heard

Mr Gore is facing three further charges of acting in the management of three corporations (MOGS Pty Ltd, Sleipner Financial Pty Ltd and Arion) whilst disqualified from doing so. These charges did not form part of the fraud trial, and will return to the Queensland Magistrates Court, for mention on 20 August 2021, following delivery of the appeal judgement.

Each charge of acting in the management of corporations, whilst disqualified, carries a maximum penalty of one year imprisonment or fine up to $8,500.

[ASIC media release; LTN 139, 22/7/21]

 

Category: Tax Month - July 2021

Author: John Morgan

John Morgan is a tax specialist lawyer of more than three decades experience now practicing at the Victorian Bar - w: www.FJMtax.com e: f.john.morgan@vicbar.com.au